Farmers in Argentina are stockpiling soybeans and selling only approximately 70% of their supply as opposed to 85% this same time last year as a means to hedge against the country’s 25% inflation rate. According to Manuel Alvarado Ledesma an independent agricultural economist, Argentinian farmers are holding 28% of their 2012-13 soybeans worth approximately $7 billion of which the government could exact $2.4 billion in export taxes. At this point the hoarding of soybeans has not affected Argentina’s exports however it has affect its domestic crushing operations. Idle capacity is twice what would be needed to avoid an increase in fixed costs. In the first seven months of 2013 Argentina crushed 19.7 million tons of soybeans as opposed to 20.8 million tons in the same period in 2012. As the UN predicts demand to double by 2050 the idle capacity of Argentina’s soyoil and soybean meal crushing plants is at 30% this year.
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