Weather has been good, and this year’s corn crop – both in the U.S. and Brazil –is forecast to be high. According to the United States Department of Agriculture, 2023/24 global corn production is projected to reach a record-high, a larger U.S. production as well as ending stocks. Not only that but yields in the U.S. will also hit a record high of 11.39 metric tons (MT) per hectare which, together with acreage, will be a bearing on an 11% increase in production to a total of 387.75 million MT.
Brazil has increased its production forecast to 130 million MT, and while Argentina is expected to produce the same 37 million MT, global production will grow up to 6% in total from the prior year.
All of this means a larger grain availability in this coming year and hopefully better prices for feed producers – an eagerly awaited truce for animal production.
With all of this availability basically just across the border, Mexico is facing an internal debate on domestic price hedging, a strong Mexican peso, lack of fertilizers, prohibition on using glyphosate and GMO corn usage. It is about to become a pretty heavy storm, as many say.
Meanwhile, Mexico continues to import more and more corn. You just need to take a look at the USGC weekly reports, and you can see with your own eyes that Mexico is always mentioned with high amounts of imported corn.
So, what is Mexico going to do? I mean, we are talking about food – a basic staple for foods and feeds. I can read a lot of criticism about the situation, but politicians from across the ideological spectrum are not proposing a solution. The only thing they have in mind is the upcoming elections in 2024.
Economics and politics are really complicated, and I admit I have lately moved away from all this chitchat. It is not that I am not interested, but it can be boring and tiresome. Notwithstanding, this is really sad. Instead of having an optimistic outlook, it is murky.
What do you think?