June 11, 2013

Argentine Crop Unchanged - Farmers to Strike for One Week

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The soybean harvest in Argentina is essentially complete and the estimate was left unchanged this week at 50 million tons. The Buenos Aires Grain Exchange now estimates the nationwide soybean yield at 2,570 kg/ha (37.2 bu/ac), which is 0.2 bu/ac less than last week. The corn harvest is approximately 63% complete and the yield of the corn harvested thus far is estimated at 7,330 kg/ha (approximately 112.9 bu/ac), which is 1.5 bu/ac lower than last week. The Argentine corn estimate was left unchanged this week at 24.0 million tons.

Farmers in Argentina are expected to announce a one-week strike to protest government policies concerning agriculture. Farmers and ranchers have agreed to a coordinated effort to stop selling their products for one week. Farm leaders have emphasized that their actions will only impact exports and that the domestic food supply is not in jeopardy.

In a heated dispute with the government several years ago, farmers stopped selling their products for about a month while they blocked highways and disrupted the food supply. They demanded that the Argentine Congress reject President Kirchner's proposed higher export taxes on commodities, which was eventually defeated by one vote. The prolonged disruption by the farmers left many consumers with ill feelings toward the farmers. The farmers want to pressure the government once again, but they don't want to rekindle a consumer backlash.

If their refusal to sell products only lasts for one week, it's hard to see how this would pressure the government to change their policies. President Kirchner is determined to become the new Hugo Chaves of South America and she took another step in that direction last week by nationalizing the railroad operations of American Latina Logistica, a Brazilian railroad company that has limited operations in Argentina. Her stated reason for taking the action was that the company was not doing enough to improve their service and lower the costs of transporting grain.