Agricultural Equipment
Argentina has a well-established local manufacturing industry that produces farm machinery and inputs. The sector is composed of approximately 730 companies and was one of the first industries to develop in the country, due to agriculture’s predominant role in the economy. According to local statistics, domestic production of agricultural machinery and equipment accounts for around 80 percent of total demand. Local content requirements imposed by previous government administrations have led to the growth of local production of parts and components. This has caused multinationals to incorporate more than 50 percent local components into their manufactured equipment. Domestic production of seeders, sprayers, and tools is strong and competitive. Argentina maintains export taxes on many exports of agricultural products. Since 2008, Argentina has applied additional percentage-based export taxes on a range of products, including soybeans, soy meal, and soy oil. In addition, some products, such as beef and wheat, face export quotas. Economic instability and currency swings have continued to provide additional challenges to the farming sector in Argentina.
High inflation, increased input costs, export taxes, logistical costs, foreign exchange controls that limit access to foreign currency for payments, and the impact of COVID-19 on the local economy discourage investments in agricultural machinery. The government’s 10-year plan, called the National Promotion of Investment and Agricultural Exports, aims to increase the volume of exports by approximately 35 percent and create new jobs for the sector. The plan could result in business opportunities for U.S. exporters as local producers search for new solutions.
Sub-Sector Best Prospects
AgTech and BioTech: The Argentine market needs to incorporate new technology in the sector, focusing on the traceability of production, as well as products and services that will improve good environmental practices.
Irrigation Equipment: The local market for irrigation systems has been growing in recent years due to the increased amount of Argentine farmland dedicated to row crops. Currently, 5.6 million acres (representing around 7 percent of farmland) are under irrigation. The Argentine government seeks to increase existing irrigated areas by 28 percent.
Parts and Components: Annual sales in this subsector currently represent about 12 percent of the total market, with many national products. There are opportunities for technologies ranging from precision agriculture to key electronic components for manufacturing domestic equipment.
Opportunities
Products offering cost savings and best practices are in great demand, as are those that improve the quality of agricultural machinery. Information technology services and products for the agriculture sector are highly sought-after. There is a potential market for innovative products and machinery such as cleaner engines that reduce air pollution. Distribution agreements, joint ventures with domestic manufacturers, and licensing are all options, but U.S. firms should choose their partners carefully given that protection of intellectual property is a continuing challenge for international firms defending their patented foreign designs.
In terms of importing used and remanufactured/reconditioned equipment, please contact our Agribusiness Industry Specialist Elizabet Simon. Prospects are evaluated on a case-by-case basis due to import restrictions.
Resources
The best way to familiarize a potential local partner or buyer with a U.S. company’s product line is to exhibit in local trade shows, the largest one being Expoagro. Advertising of specific products, parts, and equipment is normally done through web-based specialized publications:
Agritotal – Revista Chacra (Spanish)
Infortambo (Spanish)
Revista Super Campo (Spanish)
For additional information on this industry, including market analysis, trade events, contacts, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Argentine market, please contact our Agribusiness Industry Specialist Elizabet Simon.
Animal Genetics, Food Ingredients, Planting Seeds
Animal Genetics (Bovine Semen)
Overview
Local producers continue to incorporate high-quality genetics to improve dairy and beef production. Within the animal genetics sector, roughly 65-75 percent is utilized by the dairy industry with roughly 70 percent of dairy cows being artificially inseminated. The balance is used in the beef cattle sector, where roughly 15 percent of the cows are artificially inseminated. In both dairy and beef the use of cattle semen continues to grow year after year. The United States supplies almost two-thirds of the total imported semen, followed by Canada and New Zealand. There are four consolidated local importers and distributors representing U.S. AI centers.
Imports of U.S. semen are projected at $12 million in 2022, representing close to 2.5 million doses. Roughly 80 percent will be dairy breeds, dominated by Holsteins and far away Jerseys. Bull semen accounts for the balance 20 percent, with a predominance of Black Angus semen. Some Red Angus, Brangus and Hereford semen is also imported.
Sub-Sector Best Prospects
Demand for both dairy (primarily Holstein) and beef (primarily Angus) genetics are expected to increase strongly in 2022.
Opportunities
The use of expected progeny differences (EPD) production data in beef genetics is growing, with local animal genetics distributors indicating that educational outreach with local commercial breeders is critical to supporting additional demand. While breeds, such as Holstein and Angus (Black and Red) remain popular, the geographical and climatic diversity within Argentina means that characteristics from other breeds, such as Braford, Brangus, and Hereford also present sales opportunities.
Resources
National Association of Animal Breeders (English)
Argentine Chamber of Biotechnology and Animal Reproduction - CABIA (Spanish)
Ministry of Agriculture, Livestock and Fisheries (Spanish)
National Service of Agricultural and Food Health and Quality - SENASA (Spanish)
Food Ingredients (Natural Origin)
Overview
The food and beverage (F&B) industry is a key sector of the Argentine economy, accounting for about 30 percent of Argentina’s total exports. Despite Argentina’s overall strength in the production of primary products and commodities, there are opportunities for U.S. F&B exports, especially for consumer products and for U.S. food ingredients used for further processing into high-value, specialty food products. Emerging trends of interest include:
1) an increasing focus on “health and nutrition” in the retail and institutional sectors, and
2) greater understanding of the importance of innovation and innovative products that offer busy consumers a measure of convenience.
Despite some temporary disruptions due to COVID-19 outbreaks in food processing facilities, the supply chain has not experienced significant shortages or interruptions. Nevertheless, the sector has experienced major shifts in demand patterns from food-away-from-home to more at-home preparation.
Sub-Sector Best Prospects
Sub-sector best prospects include: cocoa powder; dried fruits and nuts; dextrins; peptones; whey; dried vegetables; spices; potato flakes, granules, and pellets; wheat starch; corn starch; potato starch; licorice extracts; herbs; extracts of vegetables, meat, and fish; pectic substances; agar; glycerol; glucose; fructose; molasses; coffee and tea extracts; yeasts; soy sauce; protein concentrates and textured protein substances; gelatin; non-dairy coffee whiteners; cream and milk substitutes; sugar substitutes; essential oils; casein; albumins; peptones; glues; ingredients for functional foods and for the beverage industry; nutraceuticals; and algae omega.
Opportunities
U.S. food ingredients are valued as high-quality and safe products. The best opportunities are for ingredients that are not produced locally, or local production is of low-quality, or for specialty food ingredients used by local food companies for manufacturing complex food items. Strong import performance in 2022 was seen for dextrins, tree nuts (almonds), essential oils, and protein concentrates and chocolate & cocoa products.
Resources
Institute of Food Technologists - IFT (English)
National Association of Flavors and Food-Ingredient Systems - NAFFS (English)
Planting Seeds
Overview
Planting seeds are one of the most important U.S. agricultural products imported into Argentina, totaling $7 million in 2019. Argentina’s total imports of planting seeds for 2019 totaled $84 million, a 10 percent increase compared to the previous year.
Sub-Sector Best Prospects
Alfalfa continues to be the primary seed imported from the United States, followed by yellow corn, clover, rye grass, and fescue. Likewise, seeds from vegetable crops and for lawn grass remain in demand.
Opportunities
Due to Argentina’s position in the Southern Hemisphere, off-season (or counter-seasonal) production of corn and soybean seed has generated positive returns in the last few years. Argentina’s total exports of planting seeds for 2022 totaled $47 million, while the country’s total exports of planting seeds for 2020 totaled $22 million. Continued expansion of beef and dairy production outside of traditional production areas is expected to support demand for quality forage seeds linked to demand for grasses suitable for sub-tropical regions in the northern part of the country.
Despite Argentina’s embrace of genetic engineering and gene-editing technologies, Argentina’s seed law allows for the saving of seed and does not provide a legal payment mechanism to compensate the holders of intellectual property rights of genetically engineered seeds, presenting a challenge for U.S. companies operating in the Argentine seed market.
Resources
Ministry of Agriculture, Livestock, Fishing and Foods (Spanish)
Argentine Association for the Protection of Plant Property Rights - ARPOV (Spanish)
Argentine Agricultural Research Institute - INTA (Spanish)
Chamber of Seed Producers of the Argentine Grain Exchange (Spanish)
Argentine Seed Producers Association - ASA (Spanish)
For additional information contact: https://www.fas.usda.gov/regions/argentina (English)