50 percent of cultivated land in Argentina now used for soybean as beef export controls backfire

In Argentina, a restriction on beef exports aimed at reducing local beef prices has, instead, led to a conversion of 10 percent of Argentine ranchlands to soybean production.

Soybean is not subject to export or price controls and 50 percent of all cultivated land in Argentina is used to grow soybeans. 90 percent of the crop is exported.

Argentina was once the world’s largest exporter of beef, but is expected to slip to fifth this year.

Last year, the Argentine federal government increased the export tax on soybeans, soy products and corn, but exempted biofuels from increases. This move is expected to spur exports of Argentine biodiesel and ethanol to the EU and the US. The province of Santa Fe, which hosts most of the major biodiesel plants, has additional incentives in place.

Argentina is expected to produce 428 million gallons of biodiesel in 2008, as much as four times 2007 production. Renova, Vicentin SAIC, Glencore, Aceitera General Deheza, Bunge and Repsol are among companies working in joint ventures that will construct four new biodiesel plants with over $135 million in invested capital.

Argentina has a 5 percent biofuel mandate in place for 2010. The country also produces more than 50 Mgy of ethanol from sugarcane and corn.

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