Mexico: Growing Interest in Full-Fat Soybean Meal
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Mexico ranked #3 among U.S. agricultural export markets in 2020, with exports reaching $18.4 billion. It is the 15th-largest economy globally and the 2nd-largest in Latin America. Mexico is the 2nd largest whole Soybean market for the U.S. and a significant market for Soybean Meal and Oil. Soy market dynamics have shifted somewhat, moving Mexico toward greater crush capacity and thus an emphasis on whole bean imports.
In MY2020/21, Mexico’s whole bean imports were 6 MMT, and the U.S. supplied 4.9 MMT. Soybean Meal imports were 1.9 MMT, and the U.S. supplied 1.8 MMT. Soybean Oil imports totaled 241,000 MT, and the U.S. shipped it. Mexico’s Soy usage market for animal Protein reached 6,770,000 tons in 2020 (Poultry: 4,671,300, Pork: 1,827,900, and Aquaculture, Cattle, other species: 270,800).
Strength of the U.S.: US Soybeans have the largest market share in Mexico, with an 85% share. Soybean Meal supply mainly comes from domestic crushers and imports. The core share of Soybean Oil is also from domestic crushers, with imports primarily from the U.S. With the USMCA (The U.S. – Mexico – Canada Agreement) in place after NAFTA, customers are aware of the quality and consistency of U.S. Soy. Understanding and valuing of sustainability varies amongst sectors, with aquaculture leading; three licenses of the Sustainable U.S. Soy (SUSS) Label are in place, including Mexico’s largest crusher.
Challenges for the U.S.: Continued expansion of domestic crushing capacity significantly increases domestic Soybean Meal, dampening import demand. There is an increased need to understand U.S. Soy’s advantages. Competition for U.S. Soybean Oil comes from other vegetable Oils (palm, canola, safflower, sunflower). Increased palm Oil domestic production by domestic producers and foreign investors challenge. Soybean imports from South America, namely Brazil, had a 15% market share in CY21. • New government regulations related to the use and imports of glyphosate are being enforced, and relevant agencies have delayed new GMO events approvals.
Opportunities: Growth in domestic demand for poultry and eggs and pork producers’ growing exports add to a sustained need for Soybean Meal. Interest in full-fat Soybean Meal (FFSBM), which could enhance Soybean exports of the U.S. Growth in aquaculture production (namely shrimp and tilapia) emerges, thus in feed. Some firms have implemented In-Pond Raceway System (IPRS) technology, and more producers are interested.
• Pet food continues as a feed sub-sector with the most significant growth rate and margin for producers seeking more sustainable ingredients.
• Opportunities for high oleic Soybeans amongst crushers, refiners, and users, but more favorable U.S. export economics per availability are needed. Cost dynamics have slowed interest, and long-term contracts are needed.
• The communication of U.S. Soy sustainability is increasing understanding by customers. Brand awareness will support differentiation from other origins (Brazil) and competing products (palm, canola)
Mexico Soybean and Soybean Meal Import
According to the AgFlow data, the United States shipped 5 million tons of Soybeans to Mexico last year, followed by Brazil with 0.8 million tons. Import volume totaled 0.94 million tons in Jan-Feb 2023, and the United States shipped 0.9 million tons. In 2020, Mexico imported Soybean Meal worth $654 million, becoming the world’s 10th importer of Soybean Meal. During that period, Soybean Meal was Mexico’s 108th most imported product. Mexico imports Soybean Meal mainly from the United States ($651 million), India ($1.36 million), China ($624k), Brazil ($260k), and the Netherlands ($36.4k).
The same year, Mexico exported Soybean Meal worth $1.44 million, making it the world’s 61st exporter of Soybean Meal. The leading destination of Soybean Meal exports from Mexico is Belize ($1.44 million).
Other sources: USSEC
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