In Argentina’s southeast Buenos Aires province, potato production remains one of the country’s most dynamic and strategic agricultural activities. But for growers in Balcarce, one of Latin America’s key potato regions, the business has become a high-speed race where one wrong decision can be extremely expensive.
Balcarce is widely recognized as one of Argentina’s most important potato-producing areas. The region supplies both the fresh market and major processing companies, including McCain, which has operated near Balcarce for almost three decades. The area has also attracted new industrial investment, including Lamb Weston’s processing plant in Mar del Plata, designed to process around 300 tons of potatoes per day, with a large share of production expected to be exported.
This industrial presence has made potato farming a central part of the regional economy. However, an interview published by Infocampo with Balcarce potato grower Guillermo Cerono shows that behind the growth of the sector lies a difficult reality: high production costs, climate uncertainty, volatile demand, and intense pressure on farmers.
“You Can’t Make a Mistake”
Cerono, a long-time potato producer from the Balcarce area, described farming in Argentina with a powerful comparison: being a producer is like sitting in a Formula 1 car — you cannot afford to make a mistake because the costs are enormous.
According to the interview, the cost of producing potatoes in the region can reach almost US$11,000 per hectare. This is far above the cost of extensive crops such as wheat, which Cerono estimated at around US$800–900 per hectare.
Potato is an intensive crop. It requires irrigation, careful soil management, machinery, fungicides, storage, labor, and constant technical attention. In the Balcarce region, irrigation is essential, and the crop is generally produced under conventional tillage rather than no-till systems. This increases both financial investment and agronomic complexity.
Contracts Bring Stability, But Not Full Protection
A major part of Balcarce’s potato production is linked to processing contracts. Cerono supplies potatoes to McCain and also sells into the fresh market. His family began with around 30 hectares of potatoes, while today they grow approximately 300 hectares, with about 220 hectares destined for McCain.
Contracts with processing companies provide a certain level of stability, especially in a crop where market swings can be severe. Producers agree on volumes and prices, while factories indicate how much potato will be required for processing. For many growers, this model helps reduce uncertainty.
However, contracts do not remove all risk. Cerono explained that last year was one of the worst seasons he remembers. Due to oversupply and weak demand, he had to destroy around 60 hectares of potatoes and give away stored potatoes that could not be sold as planned.
This highlights one of the most difficult aspects of potato farming: unlike grain, potatoes cannot be stored indefinitely. They have a biological and commercial window. If they are not sold or processed in time, their value can disappear quickly.
Oversupply and New Players in the Market
The Argentine potato sector has also experienced the entry of new producers attracted by the crop’s potential profitability. According to Cerono, some growers from outside the traditional potato sector entered the market after seeing good prices in previous years. This contributed to oversupply.
Potato can be highly profitable in a good year. Cerono noted that, on fewer hectares, potatoes can generate returns comparable to thousands of hectares of grain production. But the reverse is also true: when the season is bad, the financial impact can be severe.
This boom-and-bust dynamic is familiar in many potato-producing regions worldwide. When prices are high, new hectares enter production. When too much potato reaches the market, prices fall, storage becomes overloaded, and growers face losses.
Processing, Fresh Market, and the Need for Balance
Cerono emphasized that a good year for potato growers depends on both industrial demand and the domestic fresh market. If fresh market prices are weak, processors can gain stronger negotiating power in annual contract discussions. For growers, a healthy balance between industry and fresh consumption is essential.
In the region, McCain remains a major buyer, while Lamb Weston has opened a large plant nearby. PepsiCo also plays an important role in the potato value chain, focusing on chip varieties for snacks rather than French fry potatoes.
Despite this industrial structure, demand remains a challenge. Cerono mentioned that some cold storage facilities built during the recent boom are now empty, reflecting uncertainty about where the potatoes are and how they will be marketed.
Land Access: A Structural Challenge
Another major challenge for potato growers in Balcarce is access to suitable land. Potatoes require long rotations, and producers often look for fields where potatoes have not been grown for five or six years. Much of the land used for potato production is rented rather than owned.
This creates additional uncertainty. Growers may not know exactly where they will plant in the next season, even while they are already planning rotations, contracts, inputs, and machinery. Cerono explained that the search for land begins months before planting, with fieldwork starting around June, planting usually taking place in September and October, and harvesting running from January through late May for processing potatoes.
This rental-based model also makes long-term regenerative or sustainability programs more difficult. Farmers may want to protect soil health, but if they only rent land for one season, they have limited control over long-term management decisions.
Why Balcarce Still Matters
Despite all these difficulties, Balcarce remains a strategic potato region. Its soils, grower expertise, and processing infrastructure make it one of the most important potato clusters in Latin America.
Cerono has visited potato-producing regions in countries such as Germany, the Netherlands, South Africa, Canada, the United States, Brazil, Australia, and New Zealand. He noted that while Balcarce has rich soils, other countries often have more predictable irrigation systems and climate conditions. In some regions, growers can apply water and nutrients with greater precision, while in Argentina weather variability can create serious challenges at key crop stages.
For the processing industry, dry matter content, tuber shape, and quality are critical. Weather instability, excessive rain during harvest, or drought during the growing season can affect all these parameters.
A Lesson for the Global Potato Industry
The story of Guillermo Cerono and Balcarce is not only an Argentine story. It reflects the reality of potato farming in many parts of the world.
Potato is a crop with strong potential, but it is also capital-intensive, technically demanding, and exposed to rapid market changes. Profitability depends not only on yield, but also on contracts, storage, timing, processing demand, fresh market consumption, land access, and climate resilience.
For processors, the message is clear: stable long-term relationships with growers are essential. For farmers, the challenge is to manage risk without losing competitiveness. And for the wider potato value chain, Balcarce shows why local grower knowledge remains one of the most valuable assets in modern potato production.
As Cerono’s Formula 1 comparison suggests, potato production is not a slow business. It is fast, expensive, and unforgiving. But for those who know the crop, the soil, and the market, it remains one of agriculture’s most powerful opportunities.
Source: Infocampo — “Ser productor en Argentina es como estar en un Fórmula 1: no le podés errar porque los costos son impresionantes”
https://www.infocampo.com.ar/ser-productor-en-argentina-es-como-estar-en-un-formula-1-no-le-podes-errar-porque-los-costos-son-impresionantes/
