Mexican Grain Buyers Importing From South America

August 15, 2017 04:03 PM
 
 

Mexico is a deficit ag producer and for things like corn, imports are essential. While proximity and infrastructure has made the U.S. a logical trading partner, buyers here are now looking to the sea. 

As the feed goes out, the trains roll in to Grupo Gramosa, a commercial elevator and feed mill in Queretaro, Mexico. 

 

“We receive trains full of grain, mostly yellow corn,” said Jorge Castillo, operations manager of Grupo Gramosa. “We receive about five or six trains a month.”

Each train is approximately 110 cars long and is weighed down with roughly 60,000 tons of U.S. grain. 

“We have rail here and we have a direct line between the Heartland and the Corn Belt in the U.S.,” said Edmundo Miranda, director for commercial operations at Grupo Gramosa. 

Nearly 80 million bushels of grain moves through their facilities each year enroute to livestock and food companies, driven on the back of the North American Free Trade Agreement (NAFTA).

“It was pretty good so far,” said Miranda. “In my opinion, I don’t know why the U.S. wants to renegotiate. [The] U.S. is feeling that we are getting all of the advantage. I don’t think so because now you’re able to export something you were not able to [export much of] before NAFTA.” 

“When we started to hear [the trade deal] could be renegotiated, we felt offended because we [are] partners now for many years, and why do things need to be changed?” said Arturo Garcia, commercial manager at Grupo Gramosa. “We’ve been pushed to look for new origin to import grains.”

“This year, we’ve seen more interest from Brazil,” said Andrew Swann, director of chartering for Grupo Logra.  

The port of Progreso is one of the many Mexican ports seeing fresh investment in recent years. 

“We see the government of Mexico making a continuous investment to expand the scope and size of their ports which will continue to lower transportation costs,” said Swann.

Yet, is it possible to replace the United States with grain from elsewhere?

“It would be a complicated thing to do given the high volume that’s imported from the United States, but we are in contact with the Mexican government,” said Jose Manuel, director of operations for Amepa, a mexican trade association of feed mills. “We’re in discussions about alternatives for importing, especially corn and soybeans.” 

“Currently in Vera Cruz, they are doubling the capacity of their agricultural receiving ability,” said Swann. 

Groupo Gramosa is doing that work. 

“We have a facility that we are building there and we will be ready by the end of 2018,” said Miranda. 

“Not to be rude, but American farmers may be more nervous than us because that volume will be replaced from other regions,” said Arturo Garcia, commercial manager at Gramosa. “[It’s] not at all because we will need to keep importing from the United States, but a lot of volume will change.” 

It’s a trend that may already be underway, even as NAFTA negotiations begin. 

“We realize that we depend on grain form the United States but we have to start looking at the possibility of importing from South America in case the agreement falls apart,” said Arturo Basulto, a purchasing manager with Inter Industrias Del Sureste. “In the end, we hope common sense will prevail and our trade relations will go on for a very long time.”

 

Back to news


 

RELATED CONTENT

Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by Barchart.com
brought-by
Close