Status Mexico: Mexico Critical to the Success of U.S. Grain Industry

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At the beginning of July, the people of Mexico elected Andrés Manuel López Obrador, a left-of-center populist, as Mexico’s next president.

“Mexico is the most important global market for U.S. grains and related products, supported by the most valuable trade agreement in place for U.S. grain producers and exporters — NAFTA [North American Free Trade Agreement],” says Tom Sleight, U.S. Grains Council (USGC) president and CEO. “Last year, Mexico was the top buyer for U.S. corn and distiller’s dried grains with solubles, a strong market for U.S. sorghum and barley and an emerging market for U.S. ethanol.”

U.S. exports to Mexico benefit from geographic proximity and the duty-free access provided by NAFTA. Mexico set a new record as the largest export market for U.S. corn in 2016/2017, purchasing 13.9 million metric tons (547.2 million bushels) worth $2.5 billion. Mexico was also the top market for U.S. DDGS, importing 2.06 million tons in 2016/2017. Since NAFTA entered into force, Mexican imports of these two commodities have increased 845 percent and 945 percent, respectively.

Mexico continues to rank as the top U.S. corn market in 2017/18 marketing year (September 2017-April 2018), increasing purchases by 8 percent from this past year, despite ongoing NAFTA talks. Mexico is also the No. 1 buyer of U.S. DDGS with the purchase of 1.43 million tons thus far to meet the need for high-quality feed from the country’s livestock sector.

“The Mexican election was historic and also injects new elements into the already complicated U.S.-Mexico trading relationship and global grain markets,” Sleight says. “While a cause for vigilance, it is also the best reason to continue our strong engagement in Mexico, talking with customers, working with local government officials and communicating with leaders there and back here in the United States to emphasize how critical this relationship is to our success as an industry.”

“As this new uncertainty enters the marketplace and NAFTA negotiations, our staff in Washington and Mexico City will continue working closely with all stakeholders to ensure — as best we can — our trade remains open, fair and beneficial to all parties.”

Source: U.S. Grains Council.

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