cancel
Showing results for 
Search instead for 
Did you mean: 
Palouser
Senior Advisor

USDA Mark Ash's unwise warning on soy should be retracted!

First, read the article before my comments on it.

 

http://www.agrimoney.com/news/argentine-elections-may-spur-soy-price-plunge---usda--8342.html

 

I don't know who Mark Ash, the USDA economist mentioned, is but, I have some real questions relating to his slant on the Argentine economy and policies. First, Argentina went from being the top economy in S America to near the bottom after years of political upheaval, wars and military juntas trashed the country and was eventually forced to default on its debts. Since, the country has had to make do on a very narrow revenue base - mainly agriculture - and no borrowed money to speak of. They crashed and the poverty level went from one of the lowest in the region to one of the highest overnight. The export of some food crops (not soy) has been taxed for revenue and also to keep domestic supplies plentiful and affordable to the large portion of Argentinians now in poverty - which is a heavy burden on farmers income. The government lack of revenue has kept economic stimulation to a minimum.

 

Soy is priced in $US globally and with high inflation at home farmers have hoarded soy as a hedge. Mr Mark Ash is warning that a new government after the next elections could change economic policies towards stimulation and Argentinian farmers could dump soy on the world market and trash the global price of soy. I say balderdash !!!

 

Where would a new government get the money to stimulate the economy not being able to get a rating to borrow money internationally because of defaulting on former debts??? Decrease support for the large poverty sector in Argentina ??? Can't just print money because inflation is already rampant. Economic development has been low because there hasn't been any money to aid development. And yet Mark Ash is saying it's possible that farmers will suddenly be able to sell soy because inflation is suddenly going to disappear? Ain't happening.

 

This USDA warning is off base, ill informed and Mark Ash's  statements should be retracted immediately as half baked and out of the USDA's purview and purpose with so little research. Or at least until some independent international economists could review the claims Ash has made. The problem is partly that some could easily take Ash's claim seriously and affect soy prices even though the claims are off base. Disappointed the USDA hasn't qualified this as an extremely speculative POV.

0 Kudos
7 Replies
rayjenkins
Veteran Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

illinifarmer
Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

Exactly right 35% export tax, and what do you mean they can't consolidate debt by printing more the U.S. Does that every year and it all trickles down didn't you know lol go Argentina it's not like the traders in the U.S. Haven't already crushed the soy market what's the problem you don't want to see another country do it. 2012=18.15$ 2015=9.50$ by all means keep up the good work. I'd personally worry a little more about the screw ups right in front of you rather than the ones in the back yard just my opinion don't take it to heart or do I don't care.
0 Kudos
Palouser
Senior Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

Maybe a conflict of information here. Is soy taxed at 35% export price? The article states this:

 

"Soybeans, which unlike corn or wheat are not subject to Argentine export restrictions, have proved particularly appealing, with their freer movement linking domestic prices closer to global ones."

 

Are they taxed or not? I know wheat is.

0 Kudos
Palouser
Senior Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

I said nothing about consolidating debt. The Argentinian foreign debt was valued in $US. Printing more pesos that fuel inflation in a weak economy just devalues the peso's ability to be exchanged with the $US, so it becomes counter productive in regards to payng off foreign debt - which they already defaulted on.

0 Kudos
timetippingpt
Honored Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

Yes, they are taxed Palouse. 35% of value. It is a big tax. Of course, farmers are about the only wealthy left in that socialist/democratic country and beans their major export, you have to tax something, doubt if a new gov radically lets the farmers off the hook.

 

Mr. Ash is right on one thing, Argentina is a potentially huge grain exporter, and have been for almost a century now, IF they would ever get out of their own way. Of course, they won't, so nothing to worry about.

0 Kudos
hardnox
Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

IMHO, beans have been at least a buck higher than they otherwise might be if ARG farmers weren't incentivized to store most of the world carryout.

 

As to under want circumstances or when that might change I can't say but it would be a big deal.

 

 

0 Kudos
sw363535
Honored Advisor

Re: USDA Mark Ash's unwise warning on soy should be retracted!

Really,,,,,,,,

 

10 million metric tons are going to wreck the global market????????    taken from the article...

 

not a huge amount....  1/4 of their production but a drop in the world bucket

 

 

But the greater question you pose Pal,   What in the "bleep" is usda trying to accomplish and why?

 

Is it market info providers "ratings week" ???

0 Kudos