Argentina - Agricultural Sectors Argentina - Agricultural Sectors
Argentina has a long-established local industry of manufacturing farm machinery and implements. The sector is composed of approximately 730 companies and was one of the first industries to develop in the country due to agriculture’s predominant role in the economy. According to local statistics, domestic production of agricultural machinery and equipment accounts for around 80% of the total sector. Local content requirements of previous government administrations have led to the growth of local production of parts and components. This has caused multinationals to incorporate more than 50% local components into their manufactured equipment. Domestic production of seeders, sprayers, and tools is strong and competitive.
Government policies of the previous administration had a strong effect on Argentina’s farming sector. In 2008, the government began requiring agricultural exporters to pay a tax retention of 35%, thus reducing incentives for exports and reducing profitability. Coupled with increased input prices, and lower commodity prices, the farming sector in Argentina was in a precarious position.
Since December 2015, policy changes included the reduction of the export tax on soybeans and its byproducts by 5% and eliminating export taxes on all other agricultural commodities. Export permits for grains and oilseeds were also eliminated. In September 2018, the government established a new export tax on all goods except goods included in the government’s “Exporta Simple” program through December 31, 2020.
The policy changes has encouraged the Argentine agricultural sector to invest in new equipment and technology. However, the high inflation rate, increased input costs, new export taxes, and logistical costs are a drag on the market for new agricultural machinery. Two thirds of Argentina’s exports are agricultural. The 2018 depreciation of the Argentine peso, coupled with a predicted strong harvest in 2019, should spur investment in ag technology and equipment.
Sub-Sector Best Prospects
Irrigation Equipment: The Argentine market for irrigation systems has been growing in recent years due to the increased amount of Argentine farmland dedicated to row crops. Currently, 5.6 million acres (representing around 7% of farmland) are under irrigation. The Argentine government has made efforts to increase existing irrigated areas by 28%.
Parts and Components: Annual sales in this subsector currently represent approximately 12% of the total market, with a large number of national products. Agricultural producers are gradually integrating technologies to help minimize use of agricultural inputs while maintaining high yields, causing them to rely on foreign suppliers for key components. There are opportunities for technologies ranging from precision agriculture to key electronic components for manufacturing domestic equipment.
Products offering savings cost are in great demand, as are those that increase and improve the quality of agricultural machinery. Information technology services and products for the agriculture sector are highly sought-after. There is a potential market for machinery regarding environmentally friendly engines that reduce air pollution, as well as other innovative products. Distribution agreements, joint ventures with domestic manufacturers, and licensing are potential options, but U.S. firms should choose their partners carefully given that protection of intellectual property is a continuing challenge for international firms defending their patented foreign designs.
In terms of importing used and remanufactured/reconditioned equipment, please contact Elizabet Simon, Industry Specialist. Prospects will have to be evaluated on a case-by-case basis due to import restrictions.
The best way to familiarize a potential local partner or buyer with a U.S. company’s product line is to exhibit in local trade shows, the largest one being Expoagro. The next edition is scheduled to take place in March 2019.
Advertising of specific products, parts, and equipment is normally done through web-based specialized publications:
- Agritotal - Revista Chacra (Spanish)
- Infortambo (Spanish)
- Via Rural (Spanish)
- Revista Super Campo (Spanish)
Animal Genetics, Food Ingredients, Planting Seeds
Animal Genetics (Bovine Semen)
Argentina’s cattle herd is approximately 54 million head. Roughly 2 million cows are for dairy production and 22 million cows are for beef production. The quality of both dairy and beef herds is very good, but producers need to continuously incorporate high quality genetics to keep up the standard. Of the total semen market, a little more than half of it is used in dairy, while the balance is used in beef. Roughly 70% of the dairy cows, and only 10% of beef cows, are artificially inseminated. The majority of imported semen is used in dairy cows, but imports of beef genetics have increased significantly over the past few years. The United States accounts for almost two-thirds of the total imported semen market, followed by Canada, New Zealand and France. The beef business is expected to continue to be profitable, while the dairy sector is struggling with high production costs and low milk prices.
Unit: Millions of USD
|Total Market Size||23.60||23.60||24.00||26.55||32.80||28.60|
|Total Local Production||12.30||13.80||15.40||10.20||13.00||13.50|
|Imports from the U.S.***||7.90||7.20||6.80||6.30||6.80||7.00|
|Exchange Rate: 1 USD||5.47||8.2||9.0||15.0||16.5||29.0|
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: Total Local Production: Local genetic importers; Total Exports: Global Trade Atlas and local genetic importers; Total Imports: Global Trade Atlas and local genetic importers;
Imports from U.S.: Global Trade Atlas and local genetic importers
Sub-Sector Best Prospects
Both dairy (primarily Holsteins) and beef semen (especially Angus) are expected to continue to grow marginally in 2018.
The use of beef semen with production data (Expected Progeny Differences – EPD) is increasing, but semen distributors indicate that much education must be done with local purebred and commercial breeders. Imports of Holstein and Black and Red Angus have the greatest potential. However, there are opportunities for semen of other breeds such as Braford, Brangus, and Hereford. Semen of Black and Red Angus and, to a lesser extent, Brangus has the greatest opportunities from the United States.
National Association of Animal Breeders
Argentine Chamber of Biotechnology and Animal Reproduction (Spanish)
Ministry of Agriculture, Livestock and Fisheries (Spanish)
National Service of Agricultural and Food Health and Quality (SENASA) (Spanish)
Food Ingredients (Natural Origin)
The food and beverage (F&B) industry is one of the main activities contributing to the Argentine economy, accounting for about 30% of Argentina’s total exports. Some of its main trends are as follows: 1. Local production capacity being fully used, which requires additional investments to supply the growing food demand; 2. “Health and Nutrition” considered a strong concept in the F&B business; and 3. Greater interaction between the local industry and universities, fostering innovation.
The main ingredients imported were those that are not manufactured locally or those for which production is not sufficient to supply the local industry. There is a significant market for some U.S. food ingredients among local food producers, who use them to manufacture high-value, tailor-made food products.
Unit: Millions of USD
|Imports from the U.S.||51||51||55||60||59||59|
|Exchange Rate: 1 USD||5.47||8.2||9||15||17||39|
Sub-Sector Best Prospects
Cocoa powder, Dextrins, Peptones, Whey; dried vegetables; dried fruit and nuts; spices; potato flakes, granules, and pellets; wheat starch; corn starch; potato starch; herbs; extracts of licorice; extracts of vegetables, meat, and fish; pectic substances; agar-agar; glycerol; glucose; fructose; molasses; cocoa powder; extracts of coffee and tea; yeasts; soy sauce; protein concentrates and textured protein substances; gelatin; non-dairy coffee whiteners; cream and milk substitutes; sugar substitutes; essential oils; casein; albumins; peptones; dextrins; glues; ingredients for functional foods and for the beverage industry; nutraceuticals; and algae omega.
U.S. food ingredients are locally considered to be high quality and safe products. Best opportunities are for tailor-made food ingredients that are demanded for the manufacturing of more sophisticated food items, and ingredients that are not produced locally. Products imported from the United States during 2017 with best performance were Essential oils, Dextrins, Starches and Protein Concentrates.
Institute of Food Technologists (IFT)
National Association of Flavors and Food-Ingredient Systems (NAFFS)
Global Trade Atlas
The Argentine seed industry offers numerous growth prospects and opportunities in terms of an increase in the demand for genetically modified seeds, higher commodity prices, and the expansion of agricultural land area. Planting seeds are one of the most important agricultural products imported into Argentina from the United States, totaling $38.8 million in 2017, with an estimated ten percent growth in 2018. Argentina’s total imports of planting seeds for 2017 totaled $83 million, a 25 percent increase compared to the previous year.
Unit: USD millions
|Total Market Size||855||1,042||1,140||1,056||1,093||1,177|
|Total Local Production||1,100||1,210||1,195||1,100||1,120||1,190|
|Imports from the U.S.||23||20||25||26||39||43|
|Exchange Rate: 1 USD||5.47||8.2||9||15||18||39|
Data Sources: The above statistics are unofficial estimates based on Argentine Customs data, industry contacts, and the Global Trade Atlas.
Sub-Sector Best Prospects
Alfalfa continues to be the primary seed imported from the United States, followed by yellow corn, clover, rye grass, and fescue. Likewise, seeds from vegetable crops and lawn grass seed have been in demand.
Off-season production of corn and soybean seed has generated positive returns in the last few years. Argentina’s total exports of planting seeds for 2018 are estimated at $ 115 million, while the country’s total exports of planting seeds for 2017 totaled $110 million. The new development of marginal areas for beef and dairy industries will mean that demand for quality forage seeds will remain high. There is a strong demand for grasses suitable for sub-tropical regions in the northern part of the country.
Notwithstanding this, Argentina’s outdated Seed Law does not provide appropriate protection for intellectual property rights on genetically modified seeds, presenting a challenge for U.S. companies operating in the Argentine seeds market.
Ministry of Agriculture, Livestock, Fishing and Foods (Spanish)
Argentine Association for the Protection of Plant Property Rights (ARPOV) (Spanish)
Argentine Agricultural Research Institute (INTA) (Spanish)
Chamber of Seed Producers of the Argentine Grain Exchange (Spanish)
Argentine Seed Producers Association (ASA) (Spanish)
Pioneer Argentina (Spanish)
Monsanto Argentina (Spanish)
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