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Abstract

This document discusses the profitability of grain corn taking into consideration different production scenarios, both in Chile and Argentina. First, the profitability of grain corn produced in Chile is analyzed under the assumption of land renting and considering different yields. Later on, Chilean and Argentinean profitability of grain corn production are compared, under the assumption of land renting and use of genetically modified seed (Bt and RR). In the case of Chile’s data, in order to gather the required input to perform this analysis, a producer survey was administered in Chile during 2001. The survey was conducted in the Región del Libertador Bernardo O´Higgins, the main grain corn production zone. Additionally, the data collected through the survey was updated to 2006 values. In the case of Argentina, average costs and yields from the main production areas were estimated and used. Findings indicate that Chilean producers require to yield at least 120 qqm/ha to surpass the gross margin of 500 US$/ha, minimum profitability expected by producers under the assumption of land ownership. Taking into account the lower yield obtained by Argentinean producers, the use of Bt and RR seeds does not seem to be a great advantage in terms of profitability, over all if it is compared with the use of conventional seed in Chile. However, a substantial increase of grain corn yield in Argentina would have a considerable impact on the business profitability in Chile, mostly if a scenario of land renting is considered.

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