Agricultural Exports, Farm Loans Surge in Argentina & Uruguay

Argentine soy farmers are earning record profits. So are the cattle producers in Uruguay.

As farmers in Argentina and Uruguay ride a wave of recovery, exports are booming and banks are poised to increase lending dramatically, according to Bloomberg.

We’ve covered the bullish forecasts regarding this year’s corn and soy crops, and now it appears the banks have taken notice. “Banco Galicia, Argentina’s second-biggest farm lender, expects agricultural loans to increase about 40 percent this year after no growth in 2009,” says Bloomberg, while “HSBC forecasts an expansion of as much as 30 percent to a record volume.”

Argentine farmers are expected to produce 54.5 million metric tons of soybeans and 21.4 million tons of corn this year, annual increases of 65 percent and 69 percent from 2009. Bankers and farmers are equally optimistic given the record harvests coincide with an improving interest rate environment.

Across the river, cattle farmers in Uruguay continue to fill the gap left by falling production levels in Argentina. Beef exports from Uruguay rose 27% in March to 203,465 tonnes compared to March 2009, according to Meat Trade News Daily. 40 percent of Uruguay’s beef exports went to Russia and Asia with Russia demanding 90 percent more beef and Asian markets buying 122 percent more Uruguayan beef compared to 2009.

According to Ag Weekly, “the USDA increased production estimates of soybean crops from Brazil and Argentina, the world’s No. 2 and No. 3 producers, but said strong demand from China will help consume the bumper crops. “