Can Mexico Improve Its Soybean Production?


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Mexico is the second largest global customer for Soybeans and Soybean meal. Mexico ranks eighth in Soybean processing and Soybean oil production and is the ninth largest producer of Soybean meal in the world. Soybean meal represents 64% of the country’s protein meals. Soybeans account for 70% of the total volume of oilseeds processed in Mexico. Soybean oil has a 34% market share in Mexico’s edible oils and fats sector.

About 98 percent of production, the spring Soybean crop is planted from April to July and harvested from September to December. Mexico’s leading Soybean-producing states in spring 2021 include Campeche, Tamaulipas, San Luis Potosí, Veracruz, Chiapas, and Yucatán. According to Global Agricultural Information Network (GAIN) report, Mexican Soybean production is expected to rebound in the 2021-22 marketing year based on increased planting.

USDA also estimated Mexico’s market year (MY) 2021/22 Soybean production at 290,000 metric tons (MT), up about 17 percent (44,000 MT) from last year’s production. Overall, 2021/2022 Soybean production is 18 percent lower than the 5-year average. Harvested area is estimated at 185,000 ha, 19 percent (29,000 ha) higher than last year but 11 percent below the 5-year average. 

Mexico’s oilseed crushing is forecast to increase by approximately 2.9 percent in MY 2022/23, despite the expected slowdown in Mexico’s economy. On the other hand, the total consumption of oilseed products is forecast to increase a mere 2.7 percent in MY 2022/23 because of the economic slowdown and relatively sluggish demand triggered by persistent inflation. Even though Soybean production is forecasted to grow, the cancellation of a federal commercialization support program for medium and large oilseed growers discouraged the planting intentions for the upcoming year. 

Mexico was once self-sufficient in producing oilseeds, including Soy oil, until the late 1980s. But poor agriculture policies, phytosanitary problems, and other factors reduced oilseed production. Palm oil, olive oil, and avocado oil production is ramping up. Soybeans are generally imported and crushed in Mexico as edible oil for human consumption and soy meal for livestock feed.

Soybean Import Markets in Tonnes

THE US: Longtime Partner for Mexico’s Soybean Trade

Mexico relies on the US for its Soybean needs for Soybean meal and soy oil processing as the two countries border.  Also, the Southern Mexico area does not produce any grain, which benefits the US as the leading supplier of grains and oilseeds. Especially, Iowa is the state that provides the main Soybean supply to Mexican traders. Continued demand for Soybeans in Mexico is good for Iowa Soybean farmers and projected large Soybean crop in Iowa is also beneficial for Mexican buyers.

Brad Frisvold, a Marketing manager for the Iowa Economic Development Authority’s International trade office, said that the US exports $1.3 billion in agriculture products to Mexico. Soybean exports make up 19% of it. As per Agflow data, the US exported 4.9 million tons of Soybeans to Mexico in 2021-2022, while Brazil and Canada shipped 1 million tons and 10,000 tons, respectively. 

The US continues to serve as the main exporter and supplier of Soybeans to Mexico because of growing livestock sector drove growth in demand for U.S. Soybeans in recent years and expect growth of approximately 2.5 percent in the oilseed meal and 1.5 percent in the oil sector over the coming year, driven by continued meal demand from the poultry and livestock sectors.

Mexican oilseed crushers are forecast to continue increasing oil production (3.1 percent) to keep up with population growth and meal demand. Given the continued need for Soybeans for crushing, steady growth in imports is likely to meet an expected increase of over 2 percent.

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