Before the imminent start of the new potato harvest in the southeast of Buenos Aires, engineers Sergio Costantino (director of Argenpapa) and Ricardo Bergonzi (private advisor) analyzed the profitability of this crop, which hasn't yielded positive figures for farmers during the last two campaigns.
According to them, “in this campaign, there will be average yields that can significantly exceed those of recent years. An oversupply and high costs can lead to another year of bankruptcy for potato producers, just like the previous two years.” They also said that the current numbers were not very encouraging, as potato prices in the markets fell by more than 30% in the last week.
According to their report, with the current market prices ($ 220) producers must produce more than 2,200 bags/hectare (i.e. 44 tons/hectare) to obtain a positive margin. Similarly, if the price fell to $200/bag, they would need to obtain 2,600 bags/hectare (i.e. 52 tons/ hectare) to start generating profits. The outlook would be better if the price in the Central Market stood at $250/bag, as the margin is always positive for this area's expected returns for this campaign.
The analysis was carried out taking into account the current cost of potato production for the fresh market and the region's average production structure; i.e. 50 hectares of the Spunta variety planted in leased fields, in which producers own the machinery they use, and also taking into account the type of irrigation system they use, and that they harvest the crops manually.
The researchers indicated that Buenos Aires is the main potato producing province in Argentina. According to an estimate made by the INTA in February 2019, 31,700 hectares were planted in the southeast of Buenos Aires. Balcarce, Loberia, and Tandil contribute the largest areas to said region, with 24, 21, and 19% respectively, accounting for almost two-thirds of the total.
“The latest statistics released by Argenpapa indicated that Buenos Aires produced 1.38 million tons of the 2.43 million tons that the country produced in the 2015/16 campaign, accounting for 56.72% of the production,” they said.