Uruguay: COUSA Seeks Sunseed and Rapeseed Than Soybean
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Post projects Uruguay’s Soybean planted acreage at 1,225,000 hectares (HA) in 2022/2023, an increase of 100,000 HA or 8.9% over revised estimates of 2021/2022 planted acres on higher international Soybean prices. With a return to trend for yield, total production is projected at 2.8 million metric tons (MMT), a decrease of 150,000 MT, or 5% from 2021/2022. At least 50,000 new hectares will be double-crop Soybeans on land newly planted to wheat, barley, and rapeseed.
Even higher prices are unlikely to bring more hectares into production immediately because producers have learned which areas can be profitably farmed during the last period of high prices. During that period, some areas which were speculatively planted were later found to be unproductive. Higher prices for beef and dairy products will allow livestock producers to compete for marginal acres. Post anticipates an intensification of crop cultivation in western Uruguay and some expansion in the central and northeastern parts of the country.
Crop rotation is a crucial strategy for controlling weeds, especially on producer-owned land, and a desire to avoid breaking crop rotations helps limit sudden changes in planted acreage. Further, Uruguayan regulations require farmers submit soil conservation plans that prevent drastic or destructive land use changes on parcels more significant than 50 HA.
Uruguay can improve productivity by increasing the amount of land under irrigation. While Uruguay receives plenty of annual rainfall for rainfed cropping systems, it often experiences prolonged dry periods. During recent crop travel in Uruguay, FAS spoke with several farmers who hope to take advantage of tax incentives to construct small reservoirs and install center-pivot irrigation systems.
According to private sector estimates, there is approximately 300,000 HA in Uruguay that would be well suited to center-pivot irrigation systems, and currently, there is less than 30,000 HA of installed capacity. While installation costs are substantial, up to US $3,500 per hectare, strong profits in 2021/2022 could spur more investment in such systems.
The Soybean crushing industry is limited in Uruguay because the country developed as a major Soybean producer later than its larger neighbors, Argentina and Brazil. The largest Soybean crushing facility is owned by COUSA and is located near Montevideo. The plant was built partially in response to Uruguay’s 2007 biofuels law which dictated that 5% of all diesel fuel in Uruguay be biodiesel derived from Uruguayan-grown feedstock. The company contracted with ALUR, the state-owned bio-based fuel and chemical company, to provide oil for biodiesel production.
The facility has an annual crush capacity of 250,000 tons but also processes sunflower and rapeseed. It has proactively sought to source these commodities in recent years, and its crush volumes relative to Soybeans have grown. There are several small-scale soy-crushing facilities around the country that produce meals and oil for local consumption. The local dairy, poultry, and pork industries consume Soybean meal. No major expansion is planned in the coming year in these sectors. Soybean oil is used in cooking and biodiesel production.
Ending stocks are extremely limited in Uruguay and are held primarily by exporters and some larger farmers with on-farm storage.
Soybean Trade in Uruguay
According to AgFlow data, Uruguay shipped 0.1 million tons of Soybeans to Argentina in Jan-Apr 2023, followed by India (3,000 tons). For MY 2022/2023, Post projects Uruguayan Soybean exports at 2.6 MMT, down 8% over revised 2021/2022 projected exports. The decrease is due to lower expected production as it returns to trend. MY 2021/22 exports are revised upward to 2.83 MMT, which is 875,000 higher than the official USDA number due to higher-than-expected production.
Other sources: USDA
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