Two Charts: Corn and Mexico

Posted by David Widmar on December 5, 2022

With the tension and uncertainty around the future of GMO corn exports to Mexico seeming to amplify each week, we recently stepped back to consider the trends around corn trade and Mexico’s domestic situation. The full-length version of this AEI Premium article is available here. Two key insights are outlined below.

#1. A large and growing export market for the U.S.

Mexico is often cited as the #1 buyer of U.S. corn, a title China usurped in 2021. Figure 1 shows total U.S. corn exports since the late 1960s. Here we can see Mexico’s rise as a significant corn buyer got underway in the 1990s and became evident throughout the 2000s. Even in recent years, Mexico has been buying additional bushels. For example, between 2006 and 2013, Mexico purchased an average of 313 million bushels annually. Between 2017 and 2021, however, corn trade with Mexico averaged more than 600 million bushels annually (ranging from 571 million to 662 million bushels).

Figure 1. U.S. Corn Exports, 1967 – 2021. Data Source: USDA GATS and calculations.

Figure 1. U.S. Corn Exports, 1967 – 2021. Data Source: USDA GATS and calculations.


#2. Mexico’s heavy reliance on U.S. corn

Figure 2 shows Mexico’s total corn imports since the 2000/01 marketing year. Here, again, we see that activity has increased over time. While the 2020/21 marketing year is the most current data, Mexico’s corn imports have increased at an average annual rate of 4.7%, a pace that results in doubling every 15 years or so.

Figure 2 also splits total exports into subcategories: purchases from the U.S. (in blue) and all other countries (in orange). Overall, Mexico buys an overwhelming majority of its corn imports from the U.S. From 2010/11 to 2020/21, U.S. corn purchases were an average of 94% of total bushels.

Figure 2. Source of Mexico’s Corn Imports, the U.S. and All Else, 2000/01 to 2022/21. Data Source: USDA PSD and calculations.

Figure 2. Source of Mexico’s Corn Imports, the U.S. and All Else, 2000/01 to 2020/21. Data Source: USDA PSD and calculations.

Wrapping It Up

To summarize, I’ll share the full conclusion from the full-length article:

“When contemplating the potential future of U.S. corn exports to Mexico in light of the approaching GMO ban, it’s important to consider the context and trends. First, Mexico is a major trade partner for the U.S. and, until recently, was the largest international buyer of U.S. corn. While it varies, Mexico’s purchases are frequently 25% of total U.S. exports.

The second consideration is that Mexico’s corn imports have trended higher over time. Not only is Mexico a large – often the largest – buyer of U.S. corn, but it’s also a market that’s growing. It’s important to keep in mind that Mexico’s corn supply has grown mostly from imports. Domestic production in Mexico has been largely unchanged in the past eight years.

Finally, Mexico’s consumption trends have shifted to a majority (60%) of corn being consumed as feed. At a big-picture level, Mexico feeds more corn than it imports, which provides some insights into the speculation that corn imports might be exempt from the GMO rules. Of course, the U.S. exports some food-grade corn to Mexico, which could be affected by the proposed rules.

In conclusion, the big picture story – and perhaps the most important element – is that Mexico’s corn story has shifted away from domestically produced corn for food consumption (FSI) to one of more imports and increased use in livestock feed.”

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