Drought, low prices to slash Mexico’s grain production in 2024-25: USDA

MEXICO – Mexico’s agricultural sector is bracing for a challenging year as prolonged drought, low commodity prices, and limited government support are expected to significantly reduce the production of key crops such as corn, wheat, and sorghum in the 2024-25 season, according to a recent report by the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA).

The report also highlights a shift in import trends, with corn and wheat imports rising while sorghum imports decline due to changing preferences in the animal feed industry.

Corn, wheat production to decline

Corn, a staple crop in Mexico, is projected to see a 1% drop in production, falling to 23.3 million tonnes in 2024-25. This decline is attributed to severe drought conditions and a 13% reduction in planted area during the fall/winter cycle. Despite rising corn prices, the FAS noted that prices remain relatively low compared to previous years, discouraging farmers from expanding production.

To meet domestic demand, Mexico’s corn imports are expected to increase by 1% to 25 million tonnes in 2024-25, driven by strong demand from the corn processing and animal feed sectors. This follows a significant 28% surge in corn imports in 2023-24, which reached 24.8 million tonnes.

Wheat production is forecast to plummet by 24% to 2.6 million tonnes in 2024-25, primarily due to drought in key growing regions.

Similar to corn, weak wheat prices are discouraging farmers from planting. As a result, wheat imports are projected to rise by 8% to 5.8 million tonnes, while exports are expected to drop sharply by 88% to just 100,000 tonnes, reflecting a steep decline in durum wheat production.

Rice Production and Consumption

In contrast to other grains, Mexico’s milled rice production is expected to increase by 5% to 160,000 tonnes in 2024-25, thanks to higher-than-average rainfall and moisture levels in the states of Campeche and Tamaulipas.

However, this modest increase will not be enough to meet domestic demand, leading to a 1% rise in rice imports, which are forecast to reach 860,000 tonnes.

Sorghum production is set to drop by 16% to 3.8 million tonnes in 2024-25, as farmers face reduced financing options and lower profitability.

Additionally, sorghum imports are expected to fall by 33% to 40,000 tonnes, as the animal feed industry increasingly favors corn over sorghum due to its relatively lower price.

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