Drought, low prices to drop Mexico’s grain production

Prolonged drought, low prices and limited support policies are expected to drive down Mexico’s corn, wheat and sorghum production in 2024-25, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA).

Corn, wheat and rice imports are expected to increase while sorghum imports are forecast lower due to increased preference for corn in the animal feed industry.

Corn production is estimated at 23.3 million tonnes, a 1% decrease from 2023-24 due to prolonged drought conditions and an expected 13% drop in planted area in the fall/winter cycle.

“Although corn prices are increasing, they are still relatively low compared to previous years and discourage production,” the FAS said.

Corn imports for 2024-25 are estimated at 25 million tonnes, a 1% increase year on year due to forecast lower domestic production. In 2023-24, corn imports reached 24.8 million tonnes, a 28% increase compared to the previous year.

“The increase in imports is driven by strong demand from the corn processing and animal feed sectors and lower-than-average domestic production,” the FAS said.

Wheat production in 2024-25 is forecast at 2.6 million tonnes, a 24% decrease compared to the previous year based on prolonged drought conditions in the main producing regions.

Like corn, wheat prices are also relatively weak, which discourages production, the FAS said.

Imports are projected to reach 5.8 million tonnes, an 8% increase due to estimated lower-than-average production. Exports are estimated downward at 100,000 tonnes, an 88% decrease based on a sharp decline in durum wheat production.

Mexico’s 2024-25 milled rice production forecast is 160,000 tonnes, a 5%t increase compared to the previous year, based on higher-than-average precipitation and moisture levels in Campeche and Tamaulipas.

Milled rice imports are forecast at 860,000 tonnes, a 1% increase due to higher estimated rice consumption.

Sorghum production is estimated at 3.8 million tonnes, a decrease of 16% compared to the previous year due to less farmer financing and lower profitability rates.

Imports are forecast at 40,000 tonnes, a 33% decrease compared to the previous year due to imported sorghum’s higher relative price compared to corn, the preferred product in the animal feed industry.

Tags: corn, grain, wheat, crop forecast, Mexico, sorghum