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(Last updated: 23 May 2008)
Trends and opportunities
The market
Climatic and topographical variations divide Argentina into six distinct agricultural regions, only one of which (the Pampas) is conductive to widespread cultivation of grains and oilseed. The Pampas region is located in the east-central part of the country and occupies an area slightly more than 50 million hectares, or about 18 per cent of the country’s total land area. The region can be divided into three zones according to predominant use: cropping, mixed crop-livestock and livestock.
Fundacion Invertir reports that the typical producer in the Pampas operates a joint grain-oilseed-livestock enterprise, each activity competing for land. Cattle operations in Argentina can be classified into cow-calf (breeding), cow-calf feeding, and feeding-finishing. Larger operations often own separate cow-calf and fattening operations.
More than 97 per cent of beef is produced from cattle grazed on pasture, either native or improved. The remaining three per cent of the beef output comes from feedlot systems, which are getting attention from Argentine beef producers looking to increase the return on investment and the land available for crops.
Grain and oilseed production is both competitor and complement to cattle raising in Argentina. Crop competition with cattle tends to be limited to steers and feeder heifers, as cow-calf production is located mainly in areas not suited to crops. In making year-to-year decisions about the mix of crops and pastures, the producer is often influenced as much by current weather conditions, ages and numbers of cattle on hand, and rotational considerations as by current prices. At the same time, crop production and cattle raising are considered highly complementary, given the practice of rotating crops with sown pastures to maintain soil fertility.
Agriculture has benefited from the government privatisation initiatives, which have increased efficiency of these sectors and thus reduced farmer’s costs. These initiatives include:
- The granting of road and railroad concessions to the private sector
- Privatisation of communications and power sectors
- Privatisation of ports
- Total sale of the state oil company
- Animal genetics
Australia has had a long-standing relationship with Argentine breeders — this began with the export of merino rams in the early 1970s.
Many livestock breeders visit Australia to find new blood lines for Braford, Santa Gertrudis and Friesian-Holstein cattle.
Farmers are looking for other business opportunities in breeding livestock imports, such as the recent export of live angora goats for the production of mohair wool in Patagonia.
Irrigation - water management technology
In the semi-arid areas surface water is limited and evaporation rates are high. The lack of available water resources is a key factor limiting further development of these areas of the country.
Provinces such as San Juan, Tucuman and San Luis, have introduced technology to identify ground water resources to support the further development of the agriculture in the region.
The increased input use and improved crop cultivation practices are impacting traditional crop-livestock rotational schemes, making additional land available for cropping.
Opportunities
There are valuable opportunities for Australian exporters in the following fields:
- Pasture seeds
- Animal genetics (including breeding livestock)
- Irrigation equipment water management technology
- Technology for the wine industry
- The South American common market (Mercosur) countries (Argentina, Brazil, Paraguay and Uruguay) have a total population of over 200 million, and their combined GDP is US$1100 billion. With Mercosur intra-trade expected to continue growing, the need to expand agricultural frontiers is leading farmers to seek new agribusiness technology overseas to improve their productivity.
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