U.S. Sorghum Exports To Mexico Rebound In 2016/2017 Due To Council Promotion Efforts

Utilizing Market Access Program (MAP) funds, the U.S Grains Council’s (USGC’s) Mexico office maintained a robust sorghum marketing program and active engagement with the traditional importers of U.S. sorghum in Mexico, allowing for a quick return to the market as global dynamics and prices changed in 2017.

The surge in China’s sorghum imports in 2014 was one of the most dramatic trade shifts of recent years. Mexico, the traditional top purchaser of U.S. sorghum, faced tight supplies and high prices for the commodity, with imports plummeting from more than 1.4 million metric tons during the 2013/2014 marketing year to almost nothing in the 2014/2015 marketing year.

However, in the 2015/2016 marketing year, Mexico returned to the market, importing 647,000 metric tons of U.S. sorghum, a significant increase from 150,000 metric tons in the previous year.

Over the past three years, the Council continued to service the market and maintained direct contact with the large sorghum importers to keep them informed of existing market dynamics and opportunities.

In 2017, the Council sponsored representatives from Kansas and Texas sorghum cooperatives to travel to Mexico to meet with potential Mexican end-users, learn about Mexico’s sorghum market potential and understand the current constraints that have prevented direct sales to these end-users. Price has been the main constraint to buying sorghum directly.

Although sorghum is still considered expensive, it is starting to flow again from the United States to northeastern Mexican markets. One company that maintains close relations with the Council for sorghum marketing information, has the storage capacity for 24,000 metric tons and is again using 10,000 metric tons of sorghum per month in its feedlot in eastern Monterrey.

The Texas cooperatives were very interested in the opportunity to export their grain through Brownsville, Texas. Although they have not yet contracted directly with the cooperatives, the mission established these relationships for the future.

The contacts established through this and past trips with cooperatives concluded in the successful sale of 7,000 metric tons valued at $1.2 million.

This type of continued engagement and promotion allows the Council to swiftly recover markets when the opportunity arises.

The Council invested $20,000 of MAP funds in the sorghum direct sales program in 2017, with sales as a direct result valued at $1.2 million, resulting in a net return on investment (ROI) of $60 per $1 of MAP funds invested.