The Rosario Board of Trade remains concerned about the
costs of transporting grains and their byproducts from
the northern regions of Argentina to ports located in
the Greater Rosario Area, since they hinder their
competitiveness in the global market. In the following
piece, we analyze the impact of freight cost in soybean
producers’ profit margins.
Our analysis begins by establishing the following
a) We study the case of three different producers that
plant early soybean for the 2017/18 marketing year at
distances of 150 km, 700 km and 1150 km from the ports of
the Greater Rosario Area. An example of the two latter
cases could be the cities of Quimilí (in the province of
Santiago del Estero) and Joaquín V. González (in the
province of Salta).
b) For each case, we estimate the costs in US dollars per
hectare for either rented or own fields: inputs, fieldwork,
freight, taxes, etc.
c) We assumed yields of 4 tons/ha, 2.7 tons/ha and 2.5
tons/ha for each of the cases mentioned above.
d) We assumed a sale price for soybeans at harvest date of
USD 267 per ton, based on futures prices from ROFEX and
e) Lease costs were estimated at 1.5 tons/ha, 0.6 tons/ha
and 0.4 tons/ha for each of the cases mentioned above.
The results are summarized in the following table:
To avoid overestimating the impact of freight costs on
profit margins, we adopted the following assumptions:
a) The distance of short truck freights was set at 20 km.
Freight rates were obtained from FADEEAC in force
since August 1 2017.
b) We applied a 20% discount on freight costs.
The following can be concluded from the presented data:
a) Freight costs represent USD 93/ha, USD 117/ha and USD
141/ha for producers located at 150 km, 700 km and 1,150 km
respectively. This is 9%, 16% and 21% of gross profit for a
producer who owns land in each case. In terms of net
profit, freight costs represent 30%, 92% and 177% in each
These numbers show how crucial transport costs have become
for producers located away from port regions. In order for
them to become more competitive, further development in the
use of trains and barges is necessary. However, we must
also mention the challenges faced by truck transport. In a
report from FADEEAC commissioned by
, truck freight rates were found in average to be composed
a) Taxes and other charges represent 37.4% of the freight
b) Salaries, fuels and overhead costs represent 40% of the
c) Truck maintenance and replacement represent 7% of the
d) Profits represent a mere 6% of the freight rate.
As we can see, tight profit margins remain a challenge in
reducing truck freight rates.
In the search for a more efficient and integrated transport
system that minimizes costs, the intermodal use of trains,
barges and trucks becomes a necessity. The latter is key to
this system and serves an irreplaceable role in the local
economy, but is inadequate for long distance travel, which
should be served by trains and barges. Public works on the
Belgrano railway line in the Joaquín V. González – Avia
Terái – Greater Rosario segments keep advancing. This work
will be crucial for the development of the northern regions
of the country, and is expected to be finished in about 3
We are thankful for the collaboration and contributions
from Diego Bernardo Putingnano and Aníbal Córdoba from the
Chacabuco Department in the Province of Chaco.