Supply/Demand Basics
- #1 importer of U.S. corn (white and yellow 16.4 MMT).
- #1 DDGS market with imports of 1.8 MMT.
- #1 importer of U.S. barley and barley malt with imports of 227 TMT.
- U.S. sorghum imports up significantly, from 489 to 594 TMT.
- Feed industry growth is the main demand driver for grains and co-products.
Country Overview
- Mexico is a free market economy, with recent reforms made to allow non-governmental investment in petroleum, gas, electricity and basic infrastructure.
- Mexico must continue to address income and distribution gaps and security issues.
- The COVID-19 crisis accelerated Mexico’s contracting economy, resulting in the largest contraction since the Great Depression of 1929. The forecast for GDP growth this year is -9.0% annually.
Trade and Market Share Overview
- U.S. market share for corn is 88%.
- Mexico exported 929 TMT of white corn, mostly to Venezuela (558 TMT); Kenya (84 TMT); El Salvador (79 TMT); and Guatemala (74 TMT).
- Mexico signed sorghum protocol with China in October 2020 and exported 31 TMT of sorghum to Japan in January 2021.
- The world’s 6th largest compound feed industry running at 90 percent capacity and expanding at 3.6% annually.
- Significant opportunity for ethanol exports if regulations can be put in place. Ethanol prices went up and gasoline consumption reduced by 30% during the COVID-19 pandemic.
Policy Overview
- US – Mexico – Canada (USMCA) ratified and into action July 1, 2020
- Energy sector reform opened opportunity for ethanol imports yet challenges in the courts prohibit blending outside Mexico City, Monterrey and Guadalajara.
- Administration is implementing policy to favor PEMEX and inhibit outside investment which violates the spirit of recently signed USMCA.
- On December 31, 2020 Lopez Obrador signed a decree eliminating the use of glyphosate and GE corn for human consumption by 2024. Purposefully vague language and against spirit and provisions of USMCA.
