Contact: Ernie Birchmeier, (800) 292-2680, ext. 2024LANSING, March 27, 2008 - Argentina's "waist-high and gorgeous" soybean fields had Michigan farmers green with envy on a recent trip to the South American country, and the memory won't soon fade as Argentina becomes an even bigger player in today's lucrative soybean market. Twenty Michigan Farm Bureau (MFB) members visited Argentina from March 1-10 for an MFB international agricultural study tour, in which they visited farms and agricultural businesses and met with agricultural leaders and government officials to better understand, among other things, how rising prices for grains are affecting Argentina's well-established soybean and beef industries. (A list of local trip participants follows.) At the time of their journey to the Southern Hemisphere, Argentina's soybean harvest was about a month away, and the Michigan group learned that Argentinean farmers have expanded soybean acreage into traditional beef production areas due to high production costs for cattle and profit potential in soybeans. They also discovered that Argentinean farmers tend to double-crop a lot of soybeans behind wheat. Trip participant John Crumbaugh, an Ithaca farmer who grows soybeans and several other crops in addition to raising swine, found the incredible soil fertility of the soybean fields most interesting. Many soybean fields in Argentina will yield 60 to 65 bushels per acre thanks to black, fertile and deep topsoil. To put that in perspective, Michigan-grown soybeans reached a record yield of 45 bushels per acre in 2006. "They have so much black dirt ... nutrients are sustainable in the soil," said Crumbaugh. In addition to the natural soil advantage, Argentina's farmers benefit from considerably less urban sprawl, fewer environmental regulations and very low property taxes. But not all is a bed of roses. The Michigan delegation learned that farmer pay taxes of 48 percent on whole soybean exports. "That's a real challenge they face. Whole soybeans have a tremendously high export tax placed on them, so most of them are processed. But even processed soybean products are taxed at 25 percent," said MFB commodity specialist Ernie Birchmeier, who accompanied the group and helped coordinate the tour. Government involvement in agriculture also extends to currency. "In 2002, the government devalued the Peso overnight by two-thirds. That meant that if a family had $100,000, overnight it became worth only $33,000. But the agricultural money was tied up in the fields, and when the government realized that, it changed tactics, and now those export taxes effectively fund the government on the backs of farmers," explained Birchmeier. The government's footprint can also be seen in Argentina's dairy industry, with caps that allow a farmer to be paid only about $12.60 per hundredweight of milk. "The farm we visited milks 1,500 cows with a cost of production of around $9 per hundredweight," said Birchmeier. "However, escalating land prices have many concerned about increasing production costs. Land values have more than tripled during the last several years. One farmer we spoke with saw land prices go from $3,000 per hectare (the equivalent of roughly 2.5 acres) to $10,000 per hectare."
The tour-goers said Argentina's tendencies for no-till and custom farming were also clearly evident, even at a large agricultural trade show the group attended. "There was a lot of very large equipment, and it was very Americanized, with a lot of research plots and crop demonstrations," said Crumbaugh of the trade show, which could be compared to Michigan State University's Ag Expo but on a much larger scale. "(But) I don't think I saw three pieces of tillage equipment in the whole show. "And most farmers don't own equipment. They hire custom contractors for nearly everything. But still, I think they're five years behind the United States on farm technology. I didn't see any auto-steer equipment, for example." While impressive, Crumbaugh doesn't see Argentina's cropping model working in Michigan. "We don't have wide enough of a planting window to custom-hire all the field work, so that's not viable. Here we get about seven days, and their planting window is much wider," he said. As for biotechnology, the nation's beef and dairy herds are influenced by American genetic advancements, and Argentinean farmers use genetically-modified seed for all their soybeans, 50 percent of the corn and 20 percent of the cotton grown.
Michigan farmers on the trip also were impressed by the quality and abundance of fruits and vegetables on display in one wholesale market they visited, which featured 1,200 acres of fruit. "The offerings there were very high-quality, very impressive," Birchmeier said. "It was similar to our Eastern Market in Detroit, but on a much larger scale. Products were vividly displayed and priced similarly to U.S. prices at an extremely modern and very high-class supermarket."
Now back on home soil, the trip participants will be sharing these findings and other observations with their county Farm Bureau and the greater community, and putting their newfound knowledge to use in Farm Bureau policy discussions. As well, a PowerPoint presentation and other information recapping the trip will soon be available for viewing on the MFB Web site at michfb.com.
Trip participants were chosen from nominations submitted by county Farm Bureaus based on their leadership within Farm Bureau and the greater agricultural community, and represented a wide cross-section of Michigan's diverse agriculture industry. Trip costs were split between MFB, individual participants and the participants' county Farm Bureaus. MFB routinely sponsors agricultural study tours, often with help from Michigan State University. Recent destinations prior to Argentina have included the Netherlands, Belgium, France and Poland in 2006; Australia, 2005; China, 2002; Mexico, 2001; and Brazil and Chile, 2000. -30-
Representing county Farm Bureaus