Corn+Soybean Digest

Day 4 - Buenos Aires, Pergamino, Argentina

Monday – January 29

We arrived at the Liniers Livestock Market in Buenos Aires at 7:30 a.m. Today, they received by truck, 8,736 heads, and 1 fallen and 6 dead (insurance covers the dead). All the cattle are sold by 9 a.m. To view the yards, we walked above the yards on catwalks. At various locations, 20 or so buyers would also be walking along above the cattle with an auctioneer. He would be auctioning each pen and each buyer would be making his bid. As soon as the auctioneer had reached the high bid, he would slap his stick on the rail and they would move to the next pen. A runner took the data to a local phone where it was reported to the central office - the information was then entered into their main computers.

All cattle are trucked in the night before. An average of 200,000 head are received per month or about 50,000 per week. Almost all were either Hereford or Angus. All cattle are sold for slaughter, and 90% is consumed domestically and 10% exported to Europe. The sold cattle are transported 30 to 60 kilometers (18 to 37 miles) to slaughter plants. According to the stockyards individual who guided us, this market sets the price for neighboring countries. Argentina or any of the surrounding countries do not have any foot and mouth disease or mad cow disease.

There are about 50 commission companies at the yards. Some companies represent the sellers and some represent the packers. The seller pays a 3% commission to market his cattle. The auction company represents the farmer. If the buyer doesn’t pay, the auction company has to.

When the cattle leave the farm they must travel with two certificates. One is for health, and the other is for taxes and brand certification. The stockyards typically sell 10,000 heads per day. Monday, Tuesday, Wednesday and Friday are the big days. The cattle arrive between 6 p.m. and 6 a.m. and are unloaded at the dock. A computer keeps track of the cattle throughout the duration from arrival to departure.

Once the cattle are auctioned, gauchos (cowboys) move the cattle to the scales for final payment weight. We viewed the computer data that is provided to both the buyer and seller. Extensive information is available. Although this market seems very large, only 20% of the daily cattle sales of Argentina go through Liniers Livestock Market. The other 80% are sold through local auctions or directly from the farmer to the packer. Only a small amount is slaughtered by the farmer. The Buenos Aires stockyards reminded me of the old Chicago Stockyards of 60 years ago on the near south side of down town Chicago on Halsted Street. I was at the Chicago stockyard on many occasions. The difference is that everything is computerized now.

Argentina has about 50 million heads. Domestic consumption fixes the price. Per capital beef consumption is about 67 kilos (147.7 pounds).

We left the stockyards about 9:30 a.m. and entered the main highway for our trip to the Pampas area – the real reason for our trip to Argentina. As we settled into the seats on the bus, we soon saw a large supermarket that buys and slaughters about 10% of the Argentina beef. Across the road was a large Wal-Mart store and just a little farther was a large roadside billboard advertising Coke.

We were on a 5 or 6 lane highway similar to our Interstate highways, and the turnoffs and entrances are built similar to the U.S. Buenos Aires has suburbs similar to the U.S. I saw lots of U.S. company signs and General Motors and Ford car dealers. About the only way I knew I wasn’t in some area of the U.S. was the fact that all the signs were in Spanish.

As we got farther into the Pampas, we saw vast open areas of gently rolling but mostly flat topography. You could see for miles and miles. There are a few trees and small woods and brush here and there. On several occasions, I felt like I was traveling through the boot heel of Missouri or the northeast Arkansas Delta country. Other areas seemed like the open cattle country of central and northern Florida.

Once we left the metropolitan area, we drove west from Buenos Aires on an excellent 2_ lanes blacktop highway. We met many livestock trucks loaded with cattle. Later we stopped at a gas station to use the restrooms and get a coke or bottle of water. If I hadn’t known different, I would have thought I was at a new convenience gas station in the U.S.

We saw thistle patches (looked like Canada Thistles) along some areas of the roadsides. But I never saw any in the crops or pastures. We saw lots of DeKalb seed signs in front of corn and soybean fields, and we went past a good size DeKalb plant. We saw several sunflower fields, chicken barns like in the U.S., and lots of quarter horses. Practically all fields are fenced with four or five strands of wire (not barb) to keep the cattle in.

Farm Visit #1

Our first farm stop was at a farm near Pergamino, Argentina. An absentee owner who is a lawyer and lives in Buenos Aires owns the farm. The farm is set up as a corporation as is many of the Argentina farms. An on site manager with a business degree lives on the farm and oversees the daily and weekly activities. He provides operating budgets and income and expense reports to the owner. The farm is about 2,000 hectares (4,942 acres). Like many of the Argentina farms, this farm is all custom farmed. All the planting, spraying, fertilizer application, harvesting and trucking of crops is done with custom hired equipment and labor.

All soybeans are rotated in a corn-soybean-wheat-double crop soybean rotation. We saw different fields with lots of double crop soybeans at various heights from waist high to 5 or 6 inches tall. This indicates that they had planted into wheat stubble over a several weeks period. They carry crop hail insurance. This farm had on farm storage for most of their crop production. Many of the farms in the area do not have on farm storage, and they must go directly to the port at harvest (Rosario). The manager said the railroads are not good in this area and trucking is the preferable way to transport the soybeans.

Row width of corn was 70 cm (27.6 inches). The manager indicated that he thought 50% of the planting and spraying and that 80% of the harvesting is custom. He said the farms are getting larger.

He said:

Peso per hectare custom costs were:

  • Combining $30 ($12.14 /ac U.S.),
  • Planter $18 per hectare ($7.28 /ac U.S.),
  • $4.00 per hectare each spraying ($1.62 /ac U.S.).
  • He said they might spray certain crops as many as 5 to 6 times. They use no fertilizer on soybeans and may spray insecticides 2 times. 90% of the area is Roundup. Corn fertilizer includes diamonium phosphate and urea knifed in. He said his final analysis would be 180-120-120. (Not sure about these fertilizer numbers). pH ranges in the 5.8 to 6.4 areas. Most of their seed soybeans are from local suppliers. DeKalb is the main seed corn but they also use Pioneer. He said Pioneer had a facility 60 miles from this farm.

    The manager said he gets on the Internet daily to read the U.S. ag Web sites and to get the CBOT prices. They use an advisor for their marketing and chemical needs. He says this is not typical of most area farmers. Some combines have GPS, mostly Green Star (John Deere). They plant mostly group 4 and 5s, but going to some 3s. He said some group 9s are planted farther north. All of his soybeans are nondeterminent.

    Weeds include Johnsongrass, Cynodon grass (like Bermuda grass) and Canada Thistle.

    Input costs are:

  • Roundup cost is about $3 per liter ($11.36 per gallon U.S.)
  • Leased land costs him $200 per hectare ($80.94 per acre)
  • Land to purchase is $4,000 to $5,000 per hectare ($1,618 to $2,023 per acre)
  • Soybeans yield is 4 metric tons (2,204.62 pounds) per hectare (59.48 bushels per acre)
  • Corn yield is 8.5 to 9 metric tons per hectare (135.42 to 143.39 bushels per acre)
  • All crops are no-till. Practically all the Pampas is no-till farmed.
  • Rosario is 140 kilometers (87 miles) from this farm. Cost to haul to Rosario is $7 to $13 per ton (19¢ to 35¢ per bushel). The trucks haul 30 metric tons. Soybean prices are determined by CBOT less the basis, but not so much on wheat and corn. Most equipment is made in Argentina, because costs are too high to come from the U.S. They have frost in winter (our summer) perhaps 10 or 15 days. The farm is on the same latitude as Tennessee. Soybeans and corn are harvested about the same time. They have corn borer problems if they delay planting. The farm also produces 500 hectares of forage grasses, mostly for seed. Annual rainfall is 1,200 millimeters (47 inches). One of the big problems in the Pampas is drainage. There are essentially no rocks in the Pampas.

    They are planting about 75,000 corn seeds per hectare (30,000 per acre) and 300,000 per hectare soybean seeds (121,400 per acre). We saw a lot of poor corn because of too much water. He said this was a bad year for corn because of the rain. They also produce seed corn for Mycogen under two center pivot irrigation systems. They produce grass seed, and we watched them harvest Lotus seed. They export some grass seeds to Uruguay. He had a cell phone with him, and he says all the custom machine operators have them. He said it is easy to find the custom people when he needs them. He has 2 way radios within the farm. He uses the Internet frequently for agriculture information, weather and the markets.

    We drove by a 50 hectares (20 acres) Mycogen seed cornfield that was completely lost because of excessive rainfall. Lastly, we looked at his storage setup and the seed-processing warehouse.

    We left the farm and proceeded to Pergamino and checked into the Hotel Fenicia. This was the poorest hotel we stayed at. The rooms were extremely small along with an old window air conditioner. You got from the lobby to the room by walking or riding a really old elevator that only held one person and his baggage. The town’s population is 79,000. The main street shopping area was similar to any Midwestern city of that size.

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    For 2002 Travel Plans to South America see:

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