Mexico: Soybean Meal Accounts for 86% of Total Oil Meal Output
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Mexico’s total Oil Meal production is forecast to reach 6.1 MMT in MY 2023/24, an increase of approximately 2 percent compared to a year earlier due to slightly greater Oilseed imports and moderate Oil Meal demand growth from the livestock sector. This growth is slower than the previous year (which saw a 7.0 percent increase), reflecting the uncertainty that prevails in Mexico’s economy as a result of an expected economic slowdown and persistent inflation.
The expanded Soybean crush forecast for MY 2023/24 results from a slightly increased demand for vegetable Oils and Meals and affordable international Soybean prices. In addition, the slight growth of the livestock and poultry sector incentivizes soy crushing. Like past years, higher protein Soybean Meal accounts for approximately 86 percent of total Oil Meal production. According to AgFlow data, Mexico imported 19,500 tons of Soybean Oil from Argentina in March-June 2023. Oil Meal made from imported Rapeseed accounts for nearly 14 percent of total Meal production, consistent with MY 2022/23.
Meal production’s upward trend has continued over the last few years, reflecting increased domestic crush capacity. Mexico’s current crush capacity is 9.7 MMT, with an average of 86 percent capacity used. This capacity is highly concentrated in a few leading companies, such as Ragasa, Agydsa-Patrona, Proteinas y Oleicos, and Cargill, among others. Mexico’s economic outlook is complicated by various global factors, such as a forecast of more restrictive conditions in financial markets, high inflation rates, and an economic slowdown in 2023. As in previous years, crush pace will be primarily determined by the domestic demand for Soybean Meal.
Sunflower seed Meal production is forecast to remain at 13,000 MT in MY 2023/24. The livestock industry demand for this product is relatively weak due to its lower protein content than other Oilseed Meals. Although Sunflower seed Meal is considered an excellent livestock feed, mainly for ruminants, the lower levels of lysine and threonine may cause some restrictions on non-ruminant uses of this seed Meal.
Rapeseed Meal production is projected to increase 1.2 percent for MY 2023/24 to 845,000 MT, supported by an expected increase in domestic pork production in CY 2023. The pork industry is a significant consumer of Rapeseed Meal in Mexico, along with the dairy sector. Post expects Mexico’s pork production will continue to grow based on relatively strong domestic demand and export growth. Pork is the second most consumed meat in Mexico.
A weaker economy in Mexico than the previous year could inhibit the demand for protein Meal consumption in MY 2023/24. Therefore, consumption of all Oil Meal products is expected to increase by only 2.5 percent to 8.0 MMT, of which an estimated 77 percent will be derived from domestically crushed Meals. The projected consumption increase for Oil Meal products is primarily driven by a slightly enhanced domestic demand from the poultry industry. In CY 2023, Mexico’s poultry meat production forecast reflects an increase of approximately three percent compared to a year earlier. The poultry sector is Mexico’s major consumer of Oilseed Meals, for mixture with other grains to produce compound feed.
Oil Meal Imports in Mexico
Oil Meal imports are forecast to increase to 1.9 MMT in MY 2023/24 on the expectation that international prices will be competitive. Meal imports represent 23 percent of Mexico´s total Oil Meal consumption, as in the last two years, reflecting higher domestic crushing capacity. Almost all of Mexico’s Oil Meal imports are Soybean Meal.
With rising domestic livestock production, the demand for Soybean Meal as a primary vegetable protein should grow further, requiring additional imports, assuming affordable international prices. The United States is forecast to remain the leading external supplier of Oil Meals to Mexico’s market in MY 2023/24, with insignificant amounts supplied from other origins.
Other sources: USDA
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