Mexico Switching From Bread Wheat to Durum or Corn
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In 2021-22, the world produced 777 million tons of Wheat. Whether by value or weight, Wheat accounts for more than 40% of the global cereals trade. Developing countries consume 77% of total global Wheat production. Mexico is among them.
The Wheat production area in Mexico occupies about 700,000 hectares, a figure that has been stable since the mid-1990s. Almost half of the durum Wheat in Mexico’s production is grown primarily in the northern areas of Baja California, Sonora, Sinaloa, Chihuahua, and Nuevo Leon regions. Other relevant areas are Northeast (Nuevo Leon state) and El Bajio region in the central states of Mexico (Guanajuato, Queretaro, Michoacán, and Jalisco). In Baja California and Sonora states, durum Wheat is the most typical type, whereas the rest of the country mainly cultivates soft Wheat varieties.
Wheat crop systems in Mexico include one crop cycle per year in the northwestern part of the country, which usually goes from November-December to March-April. Mexico consumes almost 70 percent of the Wheat production. Therefore, the Government is aiming to increase its Wheat production to reach complete self-sufficiency and increase export.
According to Mexico’s Chamber of Wheat Flour (CANIMOLT), the outlook for the 2021/22 fall/winter crop cycle harvest was poor in Sonora, Sinaloa, Chihuahua, and the Bajio region, demonstrating the continuing trend of farmers switching from bread Wheat to durum Wheat or corn.
CANIMOLT reported adverse weather conditions during the planting season, highlighting a lack of rain during the planting and growing seasons. The low precipitation reportedly impacted bread Wheat and the durum variety, despite the latter’s relative drought resistance.
In 2021/2022, Mexico produced 3.3 million tons of Wheat on 546,000 hectares. The country imported 5.1 million tons of Wheat. As per AgFlow data, the US was the largest import market of Mexico’s Wheat with 3.1 million tons in 2021-2022, followed by Algeria (0.5 million tons), Argentina (0.4 million tons), Canada (0.1 million tons), and Australia (0.08 million tons).
In 2022, the planted area is officially estimated to be slightly above the average, which represents a rebound from the low levels of the previous two years. The expansion of sowings is mainly driven by the high prices of the grain, and it is most pronounced in the key producing State of Sonora, with a year-on-year increase greater than 20 percent. The yield was 6 MT/ha. FSI consumption was 7.1 million tons, with year-ending stocks of 0.4 million tons.
The coverage of the Government’s guaranteed minimum price program was expanded in December 2021 to include smallholder farmers (up to 8 hectares per producer) from the current cropping season, which also supported acreage gains.
Mexico Wheat: 2022/23 Forecast
According to the latest estimate reported by the Availability-Consumption Balances Working Group, the total supply of bread-making Wheat in 2022/23 of 7.4 million tons, 3.4% lower than the supply of the previous cycle. The offer in this cycle would be made up of 1.1 million pesos of initial inventory, 1.6 million pesos of national production, and 4.7 million pesos of imports.
Concerning the domestic demand for bread-making Wheat, it is estimated that for 2022/23, it would be 6.3 million tons, 3.4% lower than that observed in the previous commercial cycle. Human consumption would concentrate around 98.2% of the total demand, and the rest would be distributed between fodder consumption, seeds for planting, and losses.
According to the USDA forecast, in the marketing year of 2022/2023, Mexican Wheat production tends to be lower due to weather conditions and ongoing payment delays from the guaranteed prices subsidy program.
Other sources: https://www.eleconomista.com.mx/
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