Mexico: The GE Corn Control to Impact White Corn Import
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Mexican Corn production for MY 2023/24 (October-September) is forecast unchanged from the previous marketing year at 27.4 MMT, with a slight increase to the forecasted harvest area of 7.25 million hectares. High costs for fertilizer, herbicides, and other inputs are expected to decrease yields slightly. Although the harvested area is forecast to increase slightly, several factors disincentivize farmers to expand Corn production further.
Corn requires high water use, which can be risky for non-irrigated lands. With only an estimated 25 percent of Corn production produced on irrigated lands, many farmers are incentivized to invest in less water-intensive or higher-value crops. For example, in Jalisco, the area may shift towards agave, which feeds the domestic tequila industry and is attractive in its profitability and lower water requirements.
Continued elevated input costs (e.g., fertilizers) and minimal producer investments in enhanced seeds, infrastructure, and other productive technologies will impede growing production in MY 2023/24. Over the last ten years, yields in Mexico ranged from around 3.1 to 4.0 metric tons per hectare (MT/ha). Despite a steady growth pattern from 2011-2019, yields have remained flat in the last three years. Yields vary significantly throughout Mexico depending on access to farm inputs and advanced on-farm technology.
About 30 percent of Corn in Mexico is planted between October to February and harvested from April to August (winter cycle). The 2022/2023 winter cycle Corn in northern Tamaulipas is reported to be good quality. The final harvest in Northern Tamaulipas is on the path to reaching 341,022 MT with average yields of 6 to 8 tons/hectare. Sinaloa and Sonora, winter cycle Corn, looks productive, despite a January 2023 freeze when most of the Corn in the frost areas was in the early stages of growth. Most of the Corn has recovered, and the areas impacted are small compared to the rest of the production. About 68 percent of winter cycle Corn is produced in Sinaloa, and the remainder in Sonora, Tamaulipas, and Veracruz.
Corn Trade in Mexico
Driven by increased demand from the livestock and starch sectors, Corn imports are forecast at 17.9 MMT in MY 2023/24, a three percent increase over the previous year. On the other hand, Mexico’s Corn imports are estimated to be down to 17.4 MMT in MY 2022/23 due to a January 2023 Decree that established a 50 percent tariff on Corn exports through June 2023 and thus increases domestic supply, as well as the restriction on GE Corn use in the tortilla industry through a February 2023 Decree. This represents a four percent year-on-year decrease from Mexico’s record level of Corn imports in MY 2021/22.1. The restriction on GE Corn use is expected to impact white Corn imports into Mexico, used primarily in the tortilla industry.
According to AgFlow data, the US led Mexico’s Corn import market with 1.3 million tons in May 2023, followed by Canada (28,000 tons). Total imports hit 6 million tons in Jan-May. Mexico relies on Corn imports for almost 40 percent of total consumption. Corn imports are used to supplement domestic production of cereals, starches, tortillas, and other processed products, in addition to supporting a robust animal feed industry. Additionally, a variety of Corn-based products are also exported to Mexico.
Robust and stable Corn demand for animal feed and industrial uses will necessitate continued imports to supplement domestic production. Growth in feed use in general, and from the poultry sector, is the primary driver of growth in Mexico’s Corn imports. This trend is forecast to continue through MY 2023/24. Approximately 95 percent of Mexico’s Corn imports are supplied by the United States due to geographic proximity, exportable supply, and supply chain logistics linking the U.S. grain and Mexican livestock sectors.
Other sources: USDA
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