Buenos Aires, August 16th. This week, the Buenos Aires Grain Exchange (BCBA as it Spanish acronym) launched a pre-campaign inform about the 2018/19 corn season, that says the corn area could reach a record of 5.8 million hectares, a 7,4% increase compared with 5.4 million hectares in the 2017/18 season. The BCBA explains this area is 33% above from the 4.36 million hectares average area from 2013/17 period.

But there are some differences between private estimates and officials ones. While the ministry of Ag-Industry says that 2017 corn acreage rounded 7 million hectares and production reached 43.6 MMT, the BCBA estimated 5.4 million hectares and a 31.1 MMT output. In both cases, they consider only cash crop area, or the corn area destined to “commercial grain”, i.e., the grain that enters in the formal market. This is a relevant point since the Ag-Industry Ministry estimates total corn area around 9.1 million hectares, including the corn destined for silage or farm consumption.

Until the 2012/13 season, the gap between official and private estimates didn’t surpass a million hectares. But in the next three campaigns, this gap raised to more than 2 million hectares. Finally, since 2015/16, after a new administration took the control of the Government, the gap added one million hectares until a record of 3.6 million in 2017/18 harvest, as we see in the next graph:

Source: Bolsa de Cereales de Buenos Aires and ministry of AgIndustry

Something similar occurs with Argentina’s corn production. In 2010/11 both official and private estimation were similar, around 24 MTT. The gap started at 2012/13 season, when Ministry of Agriculture estimated 32,1 MMT versus 27 MMT from BCBA and 27 MMT too from the USDA. This gap deepened also since the 2015/16 campaign to reach near 10 MMT.

Source: Bolsa de Cereales de Buenos Aires and ministry of AgIndustry

But there is a crucial issue. If the official data is real, Argentina exported more than 70% of its corn production until 2011/12, and only the 50% in the last two campaigns. Instead of this, using BCBA data, corn exports round 70% of the production along this period.

Anyway, there is a certainty: farmers will plant more corn this season due to a better economic margin respect the soybean. The Macri’s Administration recently decided to stop the reduction of the export taxes to the oilseed, that was fixed at a 23% rate. Instead of this, corn has 0% export tax since December 2015, when President Macri fulfilled its promise to farmers to cut the export taxes to cereals and other crops except for soybean.