The price between the best courses in Argentina and those in the US was increased by more than 100%.
Between the prices of the best fields in Argentina and the most productive in the United States there is a gap of 100%, according to warnings in the local rural real estate market. While the prices of the fields abroad rose, the Argentines fell. They attribute the difference to the Argentine political and economic situation. In the United States there are no withholdings nor, among other things, do producers have to face an exchange rate gap. In addition, the exports of the sector are not blocked.
In the activity they explain that, while a very good field in the core area of Argentina (north of Buenos Aires, south of Santa Fe and southeast of Córdoba) has an approximate value of between US$13,500 and US$15,000 per hectare, in Iowa, Illinois, Indiana, United States, the North American cornfield, with the same quality of land, potential, water resources, costs an average of US$27,000. Even there are fields far above that.
In dialogue with THE NATION, Juan José Madero, president of the Argentine Chamber of Rural Real Estate (CAIR), said: “What is striking is that when Illinois began to rise, Argentina began to fall, since more or less they were always copying. “The gap historically stood at 50/60%, it fell to 20/30% in 2011/2012 and now it is 100%”, Indian.
While, On the Uruguayan coast, the core zone of the neighboring country, another of the destinations chosen by Argentines to invest, in the last year the land rose around 15% in dollars. Madero explained that fields that were at US$6,000 rose to US$7,000 and US$8,000.
Strictly speaking, he commented: “Although they are different qualities, it is a country that offers more opportunities to the producer because it does not have export rights, it has a stable exchange rate, there is access to credit and policies that encourage production and investment; treats foreign investment well. It has issues that make the market work naturally; in Argentina it is denatured”.
Regarding Paraguay, another of the countries that in recent years aroused interest for Argentines, he explained that prices there are stable, but with a tendency to increase. Due to the pandemic and the closure of borders, the operations of the Argentines there had “stagnant”. Now with the relaxations, the scenario is different: “You have to be attentive to how it evolves because there were many queries to invest there,” he said.
Madero argued that the reason for the drop in prices in Argentina is due to the “administrative decisions of the Government, that is, Government policies towards the sector”. In that sense, he explained that land prices in the country began to fall with the PASO of 2019.
“With the elections, the enthusiasm for investing in land cooled down and when the government took office, with the first measures, such as the stocks on meat, the confiscatory tax pressure, export rights, the obstacles to commercialization, that assumption was confirmed. that investment was going to be discouraged,” Madero said.
After the drop, in 2021 the situation tended to stabilize due to the increase in rents, as a result of the increase in international grain prices and there was interest in planting.
“The good news is that the value of the land depends on us, it is not a global issue because the trend is upward. Land is a scarce commodity with sustained demand, but in Argentina, due to our situation, it has decreased. Correcting this through promotion and incentives for production, we could reverse the situation,” Madero remarked.
Coinciding with what Madero raised, Federico Nordheimer, director of the rural real estate company Nordheimer, explained: “It is totally related to the situation, the difference [de precios con Estados Unidos] it is not linked to the production capacity of the land, but is due to the circumstances and the political and economic environment of the country. The fields of the United States are not better than those of Argentina; It is because of the withholdings, because of the policies. There is financial support there that allows them to invest more in machinery, fertilizers and a lot of things so that they yield more.”
“The Argentine producer in general is very developed, he is very persevering, he always looks for the best technology, but the environment does not help him, if you give him all the tools the situation would change,” he added.
Nordheimer explained that this difference in the value of the land is linked to income. In the United States a field yields 3% with the rent, while in Argentina it is 2%. He added that in the US it is easier to sell a field because it is a more dynamic market. “While in Argentina you can spend months trying to sell it, back in one or two weeks they will buy it from you. It is because uncertainty complicates the market“, he claimed.