Argentina-The farmers, government and beef industry.

ARGENTINA-FARMERS AND GOVERNMENT.

The main difference between the farmers and the government now is the export tax on soybeans.

The fact that the value of the commodities has halved should indicate that the government must concede on the outrageous tax of 35%.

The drop in price is bad in itself and was compounded by the unusual extreme drought, which is going to have an impact on the harvest yields.

While indeed there has been plenty of wonderful rain across the country in the last two weeks, this will not be sufficient to repair the damage done to the plants in the early stages of growth.

Assuming the two parties can reach an ultimatum at the next scheduled meeting on Tuesday of next week, there will still be the political ambitions of the farm leader to contend with, as several of them are putting up for Congress as members of the government opposition.

The increase in the beef export quota by 60,000 tons is good news for the meat industry, suffice to say that this is on paper only, there are still the government controls to contend with, which mean that a beef plant must sell a minimum of 65% of beef production on the home market, which was amended from 75% at the meeting on Tuesday.

The economic problems in Russia are a matter of grave concern, Russia has become a vital player in the Argentine beef industry, far more valuable than the protectionist European Union Hilton quota, however the lack of credit has all but closed the market down..

It was only a year ago that Russians were flying in to Argentina with suit cases full of cash, to buy cheap cow beef.

Since September the trade has been dead in the water.

Australia are best positioned to serve this market when it returns as the Australian low dollar is making their beef prices very attractive.