06 December 2015

Argentina, Soy Beans and You

SiloBags - ever heard of them? Me, either. Until this past Saturday morning that is. 

On the Oklahoma State University Ag Department tv program, SunUp, one discussion topic was the taxing political trouble in Argentina.

From AgWeb on the topic of a soy price rally, ""You hear the old clich√©, 'Buy the rumor, sell the fact,' and in this case in Argentina it was, 'Sell the rumor in anticipation of the market going down,' and it did,” says Jerry Gulke, president of the Gulke Group."

This link will take you to the SunUp YouTube channel.

The reason taxes in Argentina matter is because when the government imposed 25% export taxes on their soy beans, the farmers bought SiloBags and stockpiled them in protest instead of selling them.

From the photos on the company's website, I can only assume that they are selling worldwide. The product list: Dry grain baggers in 6 foot, 9 foot, 10 foot and 12 foot diameters, Capacity in excess of 400ton/hour, Direct loading models from delivery trucks available, Tractor driven or self propelled models available, Rice Baggers, Baggers with grain crushers fitted (6 foot machine is perfect for intensive animal production).

In Feb., Bloomberg Business wrote, "In Argentina, where soybeans help drive the economy, a battle over export taxes has farmers defending their fields at night amid accusations that they’re hoarding crops to undermine the government.
At issue is the growing use of silo bags, sausage-shaped sacks 12 feet (3.7 meters) in diameter and 200 feet long that can hold 12,000 bushels of grain or oilseeds for three years. Some farmers say they only use the bags to store crops until they can get them to market, while others see them as type of savings account. The government asserts the farmers are stashing crops to avoid paying a controversial 35 percent export tax that supports a third of government spending.
The verbal sparring, which comes as President Cristina Fernandez de Kirchner faces October elections, has grown more virulent over the last few months. Now, according to the farmers, it’s escalated into overnight attacks that culminate in silo bags being slit open."
The numbers: "The government estimates that farmers are hoarding 18 percent of last season’s record soybean crop of 53.4 million metric tons, or about $3.7 billion worth of oilseeds.
Cabinet Chief Jorge Capitanich said Jan. 15 farmers are undercutting state financing by hoarding. In the first seven weeks of the year, they sold $1.8 billion of grains for export, the lowest for the period since 2007. In 2014, they sold $24.1 billion of grains and oilseed to boost central bank reserves."

While researching that interesting story, I found an article from Purdue University discussing the wide use of SiloBags in Indiana.

"Since steel (metal) bins or other permanent structures like silos cannot be erected on short notice, the silo bag, also referred to as a grain bag or a harvest grain bag, will be one of the alternatives that farmers will most likely consider. While silo bags have been used for decades for storing silage in the Midwest, and commonly used since the early 90’s in Argentina and since the early 2000’s in Australia for storing commodities such as corn, wheat, soybeans and sunflower seeds, they have only been used in the U.S for storing commodity grain during the last few years."

You can go to the links provided above to learn more about SiloBags or just do an Internet search for them. I think you'll be as surprised as I am how widely used they are around the world. Who knew?




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