On December 29th 2020 an agreement was reached between workers at soybean crushing plants and grain inspectors at the port of Rosario. The 20-day strike was estimated to cost $100 million per day and was an added blow to the faltering Argentine economy. Workers demanded increased wages to offset the effect of inflation resulting from the injudicious management by the socialist government of the Argentine.
The strike was partly responsible for the surge in prices of soybeans and soybean meal by affecting the balance between supply and demand. It is hoped that the resolution of the strike will lead to a reduction in the price of soybean meal that has diminished margins of turkey and broiler producers in the U.S.
USDA has reduced the projection of soybean production by Argentine for the 2020-2021 market year by 50 million metric tons due to drought. Subsoil moisture has declined sharply and projected yields will depend on timely rainfall. According to USDA-FAS Gain Report AR2021-001 dated December 30th farmers are holding back supplies of soybeans based on peso dominated financing and reduced export tax levels. In an inflationary economy, it pays farmers to sit tight and hold on to an asset of escalating value rather than convert their crops to domestic currency. For the local market year beginning April 2020, USDA projects a total supply of 70.09 million metric tons of which 10 percent will be exported and 58 percent will be crushed. USDA anticipates a yield of 43.3 bushels per acre from the current crop c ompared to ann average of 50.7 for the U.S.