Mexico is an important trade partner and leading export destination for U.S. corn. As Mexico’s domestic use of corn more than doubled over the past decade, the U.S. has helped meet the country's growing demand. Mexico issued a decree in February 2023 calling for the immediate ban on genetically modified (GM) corn in the masa or tortilla flour food sector. The Office of the U.S. Trade Representative (USTR) is in consultations with its Mexican counterparts over the issue. Continued and strengthened trade with Mexico is important to U.S. corn.
In this article, I’ll present a look at Mexico’s corn import needs and changes in trade flow patterns. First up, three takeaways from the analysis, followed by more detail.
- Mexico has made notable reductions in white corn imports from the United States in this marketing year. Through May, U.S. white corn exports to Mexico were 84.5% lower than the same period a year ago. And the U.S. total exports of white corn to Mexico in the first nine months of this marketing year are nearly equal to the average per month exported in recent years.
- Primarily driven by the change in white corn imports, overall U.S. corn exports to Mexico through May are 4.9% lower in this marketing year as compared to last year. This is especially notable given that white corn last year was only 3.6% of total corn exports to Mexico. This year through May, white corn is 0.6% of total corn exports to Mexico. Of the total reduction in export tons year-over-year, white corn is accounting for 60% of the drop.
- The U.S. share of Mexico’s total corn imports is 85% through May of the 2022/23 marketing year, compared to 97% last year – both at the end of the year and as of May. This represents a 12% loss in market share. While Mexico has reduced imports from the U.S., particularly in the September 2022 through February 2022 time frame, another reason for the shift in market share is due to the increase in Mexico’s total corn imports. If Mexico continues the pace of corn imports in the final three months of 2022/23, which is typical, the nation is on pace to import 19.3 MT of corn, compared to 17.4 MT in 2022/23, or 11% more than last year.
Mexico Corn Production & Use
Mexico’s domestic use of corn began a rising trend in 2012/13 and increased 63% over the next ten years. While Mexico’s corn production has also increased during the same period, production growth at 24% has not been as rapid as the increase in domestic use. Mexico has increased corn exports over the past decade to supply the difference between the moderate growth in production and more rapid growth in domestic use.
For both 2022/23 and 2023/24, Mexico is expected to produce 60% of the corn it will use domestically. This leaves 39% of domestic use to be filled by imports while the remaining 1% is filled by use of carry-over stocks.
U.S. Corn to Mexico
Mexico is the leading export destination for U.S. corn, receiving anywhere from 21% to 32% of U.S. corn exported annually in recent years. Mexico remains the top destination for U.S. corn, but total corn exports are 4.9% behind the pace of last year. Through May of the 2022/23 marketing year, corn exports to Mexico are at 12.3 million tons (MT), compared to 12.9 MT at this point last year. It is worth noting that the year-to-year comparison has caught up in recent months. For example, at the end of the first half of the 2022/23 marketing year U.S. corn exports were 13% lower than the first half of the 2021/22 marketing year.
Because the immediate ban is specific to corn for the tortilla sector, it’s not surprising that most of the impact on overall corn exports is driven by changes in white corn. Over the last five years, white corn has accounted for between 3.6% and 7% of the U.S. total annual corn exports to Mexico. Yellow dent corn normally is 92% to 95% of the total corn exports to Mexico, with the remaining 1% to 2% in other corn classifications such as popcorn and seed.
White corn exports to Mexico dipped significantly in October 2021 before rebounding for almost a year. Aside from that point, the shift begins in September 2022 when white corn transactions between Mexico and the U.S. dropped. From January 2017 through August 2022, exports of white corn from the U.S. to Mexico averaged 68.8 tons per month. Between September 2022 and May 2023, total white corn exports to Mexico have averaged 7.8 tons per month. To put that into perspective, the total white corn exports in the first nine months of the 2022/23 marketing year total 69.8 tons, or an 85.5% decline from 448.9 tons at the same point in the 2021/22 marketing year.
To reiterate this point: the U.S. has exported a total of 69.8 tons of white corn to Mexico through May of the 2022/23 marketing year; in recent years the U.S. averaged 68.8 tons of white corn exports to Mexico each month!
Monthly exports of yellow dent corn in that time have been like patterns of the past five years while exports of corn in the popcorn, seed, and other classifications are down 14.8%.
Mexico’s Corn Sources
Mexico has consistently used corn from the U.S. to fill its import needs. Last year, Mexico sourced 97% of its corn imports from the U.S., and in the five years prior 95% per year, on average. Brazil has been the source for around 5% of Mexico’s corn imports, on average, while several other nations round out the total. Brazil and other nations are also growing GM corn. Brazil reports GM seed was used on 95% of corn planted in the 2022/23 crop year, virtually the same as in the U.S.
Through May of the 2022/23 marketing year, the U.S. accounts for 85% of Mexico’s imports. For comparison, the U.S. accounted for 97% of Mexico’s imports at the same time in the 2021/22 marketing year.
However, another factor is that Mexico is importing more corn. Mexico is on track to import 11% more corn than last year. In recent years Mexico has imported about one-quarter of total corn imports in the final quarter of the marketing year. If that is assumed for 2022/23, Mexico would be on track to import 19.3 MT of corn this year given the 14.5 MT as of May. This is 2.1 MT higher than the USDA projection in the July WASDE at 17.2 MT for 2022/23 and 1.9 MT higher than last year.
Trade Agreement Background
The U.S.-Mexico-Canada Agreement (USMCA), a trade agreement between the three North American nations, was entered into force on July 1, 2020. Six months later Mexico issued a decree to ban all GM corn by January 2024. A version of that was expedited when a second decree was issued in February 2023 calling for the immediate ban on GM corn in the masa or tortilla flour food sector. In June 2023, the USTR requested consultations under USMCA dispute settlement procedures in response to Mexico’s actions to ban biotech corn for human consumption.
Given the importance of the Mexican market for U.S. corn growers, NCGA supports efforts to improve market access. NCGA is in close coordination with USTR and applauds the steps taken in the dispute settlement consultation process under USMCA. NCGA believes that policies affecting the corn industry should be grounded in science and is committed to working with allied partners in supporting the efficacy, sustainability, and cost-savings that biotechnology provides.