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26/06/2017 0:00 - Agricultural Commodities Market
SOFIA CORINA
The agribusiness: productive or real estate income?
 

As the table shows there is a very noticeable difference between earnings in owned field and the rented one:

 
 
 

It should be clarified that in order to simplify the analysis, we do not compute the incidence of taxes, rates and contributions that could deteriorate the results of the study.

As we can see in the next table, if we take a hectare in the productive core area whose market value is USD 16,000 and considering a rental income of 16 quintals of soybeans, we would obtain a real estate income of 2.5% annually. In contrast, in a rented field, dividing the production gross margin (USD 116 / ha) by a smaller investment (USD 864 between operating capital and rent), the revenue rises to 13%. This higher rate of return of the renter tends to compensate for the greater risk assumed for the agriculture production.

 
 
 

While we expand this calculation to 300 hectares, the owner would receive a gross margin of $ 117,600 annually (without national and provincial taxes) with a minimal risk and with extra time to get another additional income. Regarding a producer who rents these 300 hectares and invests in inputs to produce soybeans, his gross margin would be USD 34,837 per year, which means almost one third of owner’s result and with a very high risk derived from the specific produced activity. Meanwhile, if a landowner decided to work his own land, we would add both revenues: land ownership and production. The total would be USD 152,437 being 77% of his income obtained by owning the field (that is what he would get if he rented it) and the remaining 23% for producing his land. This proportion varies depending on the crop produced.

 

 Institutional video


Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
TE: (54 341) 5258325 (Complejo de Laboratorios - servicioalcliente@bcr.com.ar)
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
Tel: (54 - 011) 43280390/1484 43939391/9649- Fax: (54 - 011) 43939649
contacto@bcr.com.ar