Sep 22, 2015

Federal Agricultural Inspectors in Brazil on Strike

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Last Thursday the federal agricultural inspectors in Brazil walked off the job in a salary dispute with the federal government. Nationwide approximately 70% of the inspectors joined the job action, but at the Port of Santos, which is the largest in Brazil, all the inspectors are off the job. At the Port of Paranagua, it has only been a partial job action, at least for the time being. On Monday at noon, striking inspectors staged a demonstration at Guarulhos International Airport in Sao Paulo, which is Brazil's largest airport.

The agricultural inspector union, which has 2,700 members, voted down the government's latest proposal for a 21% salary increase over a four year period by a 92% margin. Union leaders stated that the latest proposal from the government was far short of what is needed for their members to even keep pace with inflation, which is currently running at approximately 10%.

These inspectors are responsible for grain and meat inspections at Brazil's ports, airports, border crossings, and meat processing facilities. Grain exporters are saying that the strike is coming at a very inopportune time just as corn exports start to ramp up. Most of Brazil's soybean exports have already left the country, but that is not the case for corn and Brazil is the second largest corn exporter after the United States.

Meat processors are very upset by the strike because if meat exports are stopped, their cold storage warehouses will quickly fill up and processing facilities would then have to shut down. That is exactly what happened this past March when a three-week trucker driver strike in Brazil cost them millions of dollars. If grain exports are stopped, the grain can remain in the silos with no harm done, but if meat processing facilities are forced to shut down, it takes a long time for animal production schedules to return to normal.