The U.S Department of Agriculture (USDA) just released the Grain and Feed Annual report from Mexico. The report highlights a marginally lower domestic production of corn and sorghum in marketing year (MY) 2022/23, but feed grain demand will continue to grow, “facilitating modest growth in imports.” No doubt. One just needs to read the weekly Market Perspectives report published by the USGC to see how Mexico’s imports are present every single week.
It is therefore expected for the U.S. to remain Mexico’s principal grain supplier as a consequence of a well established trading relationship and supply chain logistics, which is highly beneficial. I have blogged about the latter, particularly because of the advantage of railroad shipping.
The report states that factors such as rising input costs, reduced government support and expected adverse weather from La Niña will put corn and sorghum production forecast marginally lower.
There is one lingering factor, the fact that grain production and imports in Mexico are subject to a biotechnology regulatory policy, which has caused uncertainty, but it is not supposed to affect yellow corn. It does affect white corn which goes primarily to human consumption of corn tortillas.
In Mexico, the cradle of corn, the report states that feed grain demand is expected to continue growing, and production forecast for MY 2022/23 will be marginally lower. There are several reasons for this: high costs for fertilizer, herbicides and other inputs.
Due to this and other reasons, some farmers are switching to agave (for tequila) or more profitable crops such as chickpeas and dry beans. And there is another reason: these crops are less water-intensive! I guess the market and weather are dictating what to do.
The poultry sector continues to lead consumption of feed grains in Mexico. According to the USDA, “the Mexican poultry sector is expected to continue to expand and modernize,” and the National Poultry Producers Association (UNA) says that “the egg and poultry meat sectors will grow 3% and 2.5%, respectively, in 2022.”
What do you think?