Farmers plan to launch a one-week strike Friday, freezing grain and cattle sales in one of the world's biggest suppliers of corn, beef and soybeans. Local livestock prices rose Wednesday, as meatpackers feared shortages.
A soy industry group in Argentina said the strike could hit some soybean exporters, though producers of soy oil and meal probably have enough stocks to ride out a week-long strikeand U.S. soy futures reversed early gains
"With all due respect, the strike makes no sense. The objective isn't clearly understandable," Cabinet Chief Anibal Fernandez said, adding that the government was open to talks with farm leaders.
"I'll never say the door to dialogue has closed," he told reporters.
The protest is the latest chapter in a long running dispute between the agricultural sector and President Cristina Fernandez, which began last March, permanently damaged her approval ratings and rattled local financial markets.
The battle flared up again when the president vetoed part of a farming law that would have exempted some drought-hit farmers from paying export levies.
The emergency farm law, which also contained subsidies and tax breaks for farmers hit by a severe drought, was passed unanimously in Congress, but the government said the exemption was included by mistake and was impossible to implement.
Past Talks Have Failed
Although the cabinet chief said dialogue was possible, previous talks between government officials and farm leaders have not led to any lasting agreement. Farmers complain that the government has not come through with some promises made.
Alberto Rodriguez, executive director of the Argentine Oil Industry Chamber and Grains Exporters Center, or CIARA-CEC, told Reuters soybean exports could be affected by the strike, but that most crushers have sufficient stocks.
"I don't see a critical situation in most of the sector. In the case of grains exporters, there could be some problem, especially those who don't have their own port. In those cases there could be some impact. They might have to reschedule a shipment," Rodriguez said.
On the Chicago Board of Trade, U.S. soybean futures eased despite news of the strike and September soybeans were down 1 cent per bushel at $10.90 as rains in the Midwest farm belt and a firmer dollar canceled out earlier gains. ]
"They're not offering any beans right now at all (for export). The problem comes for the domestic crusher who might have trouble sourcing beans for product sales made for September," said Charlie Sernatinger, an analyst at Fortis Clearing Americas.
However, industry analysts warned that a prolonged conflict could cause problems.
"If it drags on, it will complicate their pipeline of shipments ... but everyone has some stocks," said Fabio Trigueirinho of Abiove, a crushing association in neighboring Brazil—the world's No. 2 soy supplier.
In Argentina's main livestock market Liniers, prices in all cattle categories closed up between 2 percent and 3 percent due to concerns over the strike.
Farmers disagree with export restrictions on beef, wheat and other products, but their main point of contention is a 35 percent export tax on soy, Argentina's top crop. Fernandez has repeatedly rejected calls to reduce the multibillion-dollar export taxes, a key source of state revenue.
The government argues that farmers make huge profits off soy, which is produced almost entirely for export and crowds out other crops consumed nationally, and that the wealth should be distributed in social, health and education programs.
Farmers argue that soy prices have come down from historic highs and that they use their soy income to subsidize other, less profitable farming activities
