{"id":1352,"date":"2018-02-22T16:43:47","date_gmt":"2018-02-22T16:43:47","guid":{"rendered":"http:\/\/baileyonlineclassroom.com\/theamericasblog\/?p=1352"},"modified":"2018-02-22T16:43:47","modified_gmt":"2018-02-22T16:43:47","slug":"mexico-buying-brazilian-corn","status":"publish","type":"post","link":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/2018\/02\/22\/mexico-buying-brazilian-corn\/","title":{"rendered":"Mexico buying brazilian corn"},"content":{"rendered":"
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Reuters<\/h1>\n

Exclusive: As Trump trashes NAFTA, Mexico turns to Brazilian corn<\/h1>\n<\/div>\n<\/div>\n
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P.J. Huffstutter<\/a>,\u00a0Adriana Barrera<\/a><\/div>\n
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7 MIN READ<\/p>\n

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CHICAGO\/MEXICO CITY (Reuters) – Mexican buyers imported ten times more corn from Brazil last year amid concern that NAFTA renegotiations could disrupt their U.S. supplies, according to government data and top grains merchants.<\/p>\n

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An employee takes samples of corn imported from Brazil for a quality test at a warehouse in the terminal port of Portimex in Tuxpan, in Veracruz state, Mexico February 21, 2018. Picture taken February 21, 2018. REUTERS\/Henry Romero<\/span><\/div>\n<\/div>\n

Mexico is on track to buy more Brazilian corn in 2018, which would hurt a U.S. agricultural sector already struggling with low grains prices and the rising competitive threat from South America.<\/p>\n

U.S. farmers, food processors and grain traders have spent months trying to prevent trade relationships from falling apart if the North American Free Trade Agreement implodes. They are trying to protect more than $19 billion in sales to Mexican buyers of everything from corn and soybeans to dairy and poultry.<\/p>\n

Despite their efforts, South American corn shipments to Mexico are surging. Mexican buyers imported a total of more than 583,000 metric tonnes of Brazilian corn last year \u2013 a 970 percent jump over 2016, according to data from Mexico\u2019s Agrifood and Fishery Information Service (SIAP). The purchases all came in the last four months of last year.<\/p>\n

Mexico has long been the top importer of U.S. corn, and is the second largest buyer of U.S. soybeans. But Mexican buyers are shifting to Brazilian corn to reduce their decades-old reliance on U.S. supplies for mills, and for animal feed for pigs and cows.<\/p>\n

Cheaper prices for Brazilian corn drove some of the sales. But in other cases, Mexican buyers bought Brazilian corn even when it cost more than U.S. supplies, executives and traders told Reuters.<\/p>\n

\u201cWe bought from Brazil for two reasons,\u201d said Edmundo Miranda, commercial director of Grupo Gramosa, one of Mexico\u2019s top grains merchants. \u201cOne, because it was competitive. Two, to see how practical and profitable it was to buy from Brazil or Argentina given the possibility of trade tariffs because of NAFTA renegotiations.\u201d<\/p>\n

Gramosa and its domestic rival Comercializadora Portimex didn\u2019t import any Brazilian corn in 2016. But last year, they imported nearly 260,000 metric tonnes of it – worth about $44 million at current prices – between September and December. The deals have not been previously reported.<\/p>\n

U.S. corn exports to Mexico also rose, despite the rapid increase in the flow from Brazil, because Mexico needed record imports in 2017 to compensate for the impact of a drought on domestic corn production.<\/p>\n

Mexico boosted U.S. imports by 6.6 percent, according to U.S. Department of Agriculture data. Mexico buys far more corn from the United States than Brazil, taking 14.7 million tonnes in 2017, according to U.S. government data.<\/p>\n

Brazil continues to make inroads into U.S. market share, however, and Mexican purchases of Brazilian corn continued in January, rising to 100,000 metric tonnes from none a year earlier, according to Mexican government and trade sources.<\/p>\n

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ADVERTISING<\/div>\n
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TENSE TALKS<\/h3>\n

U.S. President Donald Trump has said he will scrap NAFTA if his administration cannot negotiate trade terms with Mexico and Canada that are more favorable to the United States. The next round of talks is later this month.<\/p>\n

An end to NAFTA, farm and trade groups say, would likely lead to increased tariffs on grains trade, hurting one of the electoral constituencies that carried Trump to power. During his campaign, Trump promised farming communities that agriculture would benefit from his presidency.<\/p>\n

White House spokeswoman Lindsay Walters said the Trump administration aims to increase market access for U.S. agriculture in NAFTA renegotiations. U.S. agriculture has \u201cgenerally done well under NAFTA,\u201d Walters said, but \u201cthere is more work to be done.\u201d<\/p>\n

U.S. agriculture industry groups have fought to keep their trade advantages since Trump took power, eager to retain tariff-free or low-tariff access when trading with Mexico, Canada and other countries.<\/p>\n

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A vessel Western Tosca carrying corn imported from the United States is pictured in the terminal port of Portimex in Tuxpan, in Veracruz state, Mexico February 21, 2018. Picture taken February 21, 2018. REUTERS\/Henry Romero<\/span><\/div>\n

Most larger farming enterprises and trade groups involved in supplying the largest food staples are pro-NAFTA. Smaller farmers have been more critical as they have struggled to compete with some of the cheaper imports that resulted from NAFTA.<\/p>\n

\u2018LOSING CONFIDENCE\u2019 IN U.S. GRAINS<\/p>\n

The U.S. is already on course to lose its position as the top global corn exporter. Brazil is gaining by producing cheaper supplies that help offset higher freight costs to some destinations such as Mexico. Deteriorating U.S. trade relations with Mexico – which buys nearly a quarter of U.S. corn exports – could accelerate Brazil\u2019s rise.<\/p>\n

Mexican importers that have bought from Brazil have also often found a higher-quality product.<\/p>\n

\u201cI have the American; I have the Brazilian and the Argentinian; which one do I buy from? The cheapest,\u201d said Alfredo Castillo, marketing manager of Portimex. \u201cIf they\u2019re at the same price, I\u2019ll go for the Brazilian.\u201d<\/p>\n

Staff from the U.S. Grains Council, an industry trade group, have met numerous times with Mexican buyers and government officials to reinforce the importance of grain trade between the two countries, council officials said.<\/p>\n

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Slideshow\u00a0(12 Images)<\/span><\/div>\n

Last November, the council and the National Soybean Growers Association jointly sent a team from the U.S. to Mexico, tasked with saving trade in grain and oilseeds worth nearly $4.4 billion per year.<\/p>\n

The officials received a somewhat frosty reception in Mexico, said Thomas Sleight, chief executive officer of the U.S. Grains Council.<\/p>\n

While most wanted to keep buying U.S. grains, one Mexican feed manufacturer told the Americans: \u201cWe\u2019re losing confidence in the U.S. as a reliable supplier,\u201d said Sleight, declining to name the customer.<\/p>\n

Mexican officials gave the same message to a U.S. trade mission that traveled there in December, said Kevin Skunes, president of the U.S. trade group National Corn Growers Association.<\/p>\n

\u201cThey all were very clear: They will look other places,\u201d said Skunes, who was on the trade mission and met officials including the livestock secretary at the Mexican agricultural ministry.<\/p>\n

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LOSING BUYERS FOR GOOD?<\/h3>\n

Trade officials in the dairy industry have also spent months trying to stave off rivals in key export markets.<\/p>\n

Tom Vilsack, former secretary of agriculture under the Obama Administration, joined a group of dairy processor and trade executives and flew to Mexico several times last year to meet with processors and government officials to preserve dairy contracts.<\/p>\n

The stakes are also high for the U.S. poultry sector, which exports products worth more than $1 billion a year to Mexico and could see the southern neighbor slap a 75 percent tariff on U.S. chicken and turkey under its commitments to World Trade Organization rules.<\/p>\n

U.S. farm groups are concerned about the longer-term repercussions of losing market share. Once Mexican buyers establish new networks, winning back the business will be tough even if trade relations with the U.S improve, they say.<\/p>\n

\u201cOnce you lose a market, even a small portion of that market, you might never get that amount back,\u201d Skunes said.<\/p>\n

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Reporting by P.J. Huffstutter in Chicago and Adriana Barrera in Mexico City; Additional reporting by Marcelo Teixeira in Sao Paulo, Timothy Gardner in Washington, D.C., and Caroline Stauffer and Karl Plume in Chicago; Editing by Simon Webb and Brian Thevenot<\/p>\n<\/div>\n<\/div>\n

Our Standards:<\/span>The Thomson Reuters Trust Principles.<\/a><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Reuters Exclusive: As Trump trashes NAFTA, Mexico turns to Brazilian corn P.J. Huffstutter,\u00a0Adriana Barrera 7 MIN READ CHICAGO\/MEXICO CITY (Reuters) – Mexican buyers imported ten times more corn from Brazil last year amid concern that NAFTA renegotiations could disrupt their U.S. supplies, according to government data and top grains merchants. An employee takes samples of corn imported from Brazil for… Read more »<\/a><\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1352","post","type-post","status-publish","format-standard","hentry","category-article"],"_links":{"self":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/1352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/comments?post=1352"}],"version-history":[{"count":1,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/1352\/revisions"}],"predecessor-version":[{"id":1353,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/1352\/revisions\/1353"}],"wp:attachment":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/media?parent=1352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/categories?post=1352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/tags?post=1352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}