Is the ongoing trade spat between the U.S. and Mexico regarding genetically modified (GM) corn about to end?
Dan Basse, an ag economist and president of AgResource Company, believes that could be the case, thanks to upcoming general elections scheduled in Mexico for June 2. That Sunday, voters in Mexico will elect a new president, who will serve a six-year term for the country.
Both of the presidential front-runners – Claudia Sheinbaum and Xóchitl Gálvez – are pro trade with the U.S., Basse told AgriTalk Host Chip Flory on Thursday.
“We’re encouraged that this GMO dispute that’s been ongoing will likely be dropped (after one of them is elected),” Basse said. “We believe that Mexico will be a strong demand driver for U.S. meats and grains going forward.”
Origins Of The Dispute
The current president of Mexico, López Obrador, had signed an executive decree in 2020 banning the use of genetically modified corn. Obrador has said GM corn threatens human health as well as Mexico’s agricultural traditions and cultural identity.
Roughly 90% of all U.S. corn is grown from genetically engineered seeds.
Because of the volume of corn exports, the U.S. initiated dispute settlement proceedings against Mexico, following Obrador’s decision.
The U.S. has maintained there is no science showing that genetically modified foods harm human health, according to the Food and Drug Administration.
Despite the decree, Mexico imported 15.3 million metric tons of corn in 2023, making the country the largest importer of U.S. corn last year.
Modifications To The Decree
Since 2020, “the executive decree has been modified multiple times, pushing back its effective date and narrowing the definition of GM corn in the human food system,” write Dewey J. Robertson, graduate research assistant, and Roman Keeney, associate professor of ag economics at Purdue University, in an online article published May 15.
“At current, the ban is not expected to be applied to corn intended for animal feed and industrial use, provided that heightened protocols for keeping corn out of food processing are maintained,” Keeney and Robertson write here.
“When you look at the drought that’s affected Mexico in the last 16 months, there’s no way for them to get around U.S. corn, and there’s not enough non-GMO in the world that they could source their supply from to really feed their population,” Basse told Flory. “I think Mexico now understands that, you know, U.S. corn is going to be very important to them going forward.”
Expectations For This Year
Mexico is set to import between 14 and 16 million metric tons of yellow corn in 2024, Víctor Villalobos, Minister of Agriculture for Mexico, has said in news reports.
Basse believes U.S. exports of corn to Mexico could be even higher than that, and that other commodities could follow suit in the years ahead.
“I think more and more U.S. companies are looking at the Mexican opportunity as they move away from China,” he said. “When you’ve got someone like Mexico in your backyard, it just seems to me that relationships like that will get worked out.”
The conversation between Basse and Flory moved on from trade opportunities with Mexico to what’s going on in the global vegetable oil markets. You can listen to their complete conversation on AgriTalk here:
