Santiago Lorenzatti looks young enough to be a recent college graduate working at his first real job. Out here on the Argentine Pampas, though, a young man can punch through age barriers and push limits.
Lorenzatti doesn’t want to talk about how old he is or his educational background—he has an agribusiness degree from the University of Buenos Aires—or family or how he landed the job, because that’s all trifling stuff to him. He wants to talk business, and business, to him, is farming. At Grupo Romagnoli, where he works as general manager in an ultra-modern farm office in the quiet countryside of Cordoba Province, business is soybeans and more soybeans, with a little corn and wheat along with some cattle thrown into the mix.
He oversees 15,000 hectares at the moment. That’s about 37,000 acres. Grupo Romagnoli, with Jorge Romagnoli as president, is in expansion mode, so acreage will soon boom even higher. What’s unusual is how the company has chosen to grow.
Just outside the office, it looks a lot like central Illinois: flat, big fields, few trees, fewer people. The eastern portion of Cordoba Province, where we are, is the heart of Argentina’s soybean production region. Like the U.S. Corn Belt and Ukraine, soils in this Pampas area rank as some of the world’s best.
U.S. farmers would find things quite a bit different here, however. For one thing, the soybean is king in Argentina. Soybean acreage outnumbers corn by a margin approaching 5:1.
Even U.S. farmers who distrust some government agencies like the EPA would be astounded by the Argentine government’s interference with agriculture and high levels of taxation with resulting disincentives to invest in farming. In addition, shockingly high inflation rates currently running about 25% annually make the Argentine peso an object of derision in world currency markets.
With a finger in everything agricultural, the Argentine government stifles the business by intervening in exports markets, particularly for corn, farmers here say. The typical Argentine farmer pays 68% of his income in taxes, says Jorge Romagnoli. The government taxes soybean exports at 35%, corn at 20% and wheat at 23%. Despite that, the nation’s soybean acreage continues to increase and so do exports.
Argentina accounted for 24% of the world’s soybean exports in 2012. About 70% of the nation’s soybeans are crushed, and in 2012 Argentina owned 45.5% of the world’s soybean meal exports. Compare that to Brazil’s 21.5% and the U.S.’s 16.3%.