The US Department of Agriculture (USDA) released details regarding the production and use of feed grains in Mexico in an agricultural specialist’s report from the Foreign Agriculture Service.
Overall, wheat production in Mexico for the marketing year 2019/20 is expected to increase as producers experienced favorable weather conditions and adequate water, the agricultural specialist said.
However, wheat imports and use are expected to decline as the economy remains sluggish.
Corn production for the 2018/19 marketing year also is forecast to expand based on an increased area harvested and good weather, he said. However, strong production also is expected to lower imports.
“The sorghum production estimate for MY 2018/19 has been reduced roughly 6%, as a result of lower than expected harvested area and adverse weather conditions during the 2018/19 fall/winter crop cycle,” he said.
The economy and feed ingredient prices are prompting the use of corn or less expensive ingredients in place of other feed grains, the specialist said.
“Feed consumption of wheat has declined, reflecting the relatively higher cost of wheat compared to other alternatives such as corn.”
Feed crop growth, use
Wheat production for Mexico’s 2019/20 marketing year has been increased based on good growing conditions and higher yields than initially forecast, the specialist said. Production is forecast to reach 3.3m metric tons (MT).
However, despite the increased production, the consumption estimate has been reduced to 7.3m metric tons, he said.
“The FSI [food, seed and industrial] consumption showed a deceleration in the current CY 2019 in industrial bakeries and artesian bakeries as well as in the animal feed industry,” he added.
“The sources stated that the decline could be attributed to several factors, such as the campaigns against the obesity and diabetes launched by the Mexican Government and public health organizations several years ago,” he said. “However, the main reason is attributed to Mexico’ sluggish economy and the consequent reduction of purchasing power.”
The economy is reducing both “pricing power and volume growth,” he said. Adding, “Input cost inflation is also picking up, leading to inconsistent year-over-year results in terms of margin performance over the last few of quarters.”
Wheat import amounts were lowered to 5.2m metric tons for marketing year 2019/20 as importers are forecast to use domestic wheat rather than import the product, the specialist said. The US and Canada are predicted to remain the major suppliers for the Mexican market.
“The composition of imported wheat origins changed slightly in the MY 2018/2019 as imports from the United States increased compared to a year earlier, while imports from other origins such as Russia and Ukraine declined,” he said. “Mexico has diversified its sources of wheat over the past several years, with secondary suppliers varying depending on price and quality.”
Wheat exports also were reduced, he added.
Corn production in 2018/19 was increased based on an increase in the area harvested and good growing conditions, which improved yields, the specialist said.
Corn imports for marketing year 2018/19 were reduced to 16.1m metric tons because of the increase in domestic production, although export number also fell, he said.
Ending stocks of the feed grain were raised for 2018/19.
Sorghum production, however, declined for marketing year 2018/19 based on a drop in plantings and poor weather during the fall/winter crop cycle, the specialist said.
“Among the adverse weather factors were the lack of rain at a critical stage of the crop development, a heatwave during the grain filling stage, and a hailstorm in mid-May, which reduced the expected yields,” he added.
Sorghum imports were increased to 570,000 metric tons for 2018/19, he said. Consumption is expected to decline for that period based on reduced domestic production.