The United States may have just lost its top corn customer.
Mexico announced in December that it was going to ban imports of genetically modified corn by 2024.
At first there was uncertainty whether the ban would apply to corn used for animal feed, which is what the U.S. ships to the country.
Mexican government officials met with feed industry officials on Jan. 15 and clarified that the ban would indeed apply to both corn imported for food and feed.
That could be a serious blow to the U.S. corn industry because Mexico has historically been its top export customer.
The country typically imports around 15 million tonnes of U.S. corn annually worth about US$2.7 billion.
Rich Nelson, chief strategist with Allendale Inc., said the ban would be a massive blow to U.S. agriculture because 92 percent of the country’s corn is genetically modified.
“I almost refuse to even look at it because I think it’s an unbelievable proposal,” he said.
“I just don’t know what to say. I don’t.”
The U.S. Grains Council was contacted for this story but declined comment. The National Corn Growers Association was also contacted but did not respond.
According to Reuters, the goal of the Maiz para Mexico, or Corn for Mexico program, is to replace 30 percent of annual imports with increased Mexican corn production by 2024.
Nelson thinks that is ambitious given that Mexican production has been stagnant at about 27.5 million tonnes over the past five years. Producing an extra five million tonnes of the grain within three years seems unrealistic.
The other 70 percent of traditional import volumes would have to be switched to non-GM corn.
The country typically imports about 16 million tonnes of the crop per year, 95 percent of which comes from the U.S. The GM corn ban would seriously disrupt that ratio.
“It would of course sharply hit us on the U.S. side, and it would result in moderate starvation for the (Mexican) livestock herd,” said Nelson.
Mexico would need to look elsewhere for its imports, but where?
Brazil’s first crop of corn is 90.7 percent GM varieties and its second crop is 84.8 percent biotech, according to the U.S. Department of Agriculture.
“I would be surprised if Brazilian suppliers could even prove non-GMO with documentation,” said Nelson.
The Mexican government said the ban is designed to protect “native corn, cornfields, bio-cultural wealth, farming communities, gastronomic heritage and the health of Mexicans,” according to a story published in Mexico News Daily.
The government has also announced it is eliminating the use of glyphosate by 2024.
Mexico’s National Agricultural Council said the ban on GM corn and glyphosate poses a serious threat to the supply chain. It believes the country’s corn production could fall by up to 45 percent.
“The lack of access to production options puts us at a disadvantage compared to our competitors, such as corn farmers in the United States,” said the council.
Nelson said the U.S. may be able to survive the loss of the Mexican market because of the sudden emergence of China as a major buyer of the crop.
China is forecast to import 17.5 million tonnes of corn in 2020-21, up from 7.6 million tonnes the previous year and 4.5 million tonnes the year before that.
Nelson thinks China will continue to be a large buyer of the crop in the future, but it is an unpredictable and unreliable market. Mexico had been the opposite until now.