February 25, 2011

Mexico corn crop to decline following destructive frosts

Mexico is foreseeing lower corn crop quantities after the harvest was badly damaged by frosts this month, with possibly more imports needed to fill the gap and curb increasing fears about higher grain prices.

Agriculture Minister Francisco Mayorga said on Thursday (Feb 24) Mexico would produce 23.3 million tonnes of corn in 2011, down 6.8% from an original forecast of 25 million tonnes.

The lowest temperatures in two decades swept across northern Mexico in the first weeks of February, freezing corn stalks in the fields.

The government has been upbeat about a rapid replanting program that is says will help recover the losses, but the lower output estimate is the first sign the recovery will not be as comprehensive as once thought.

"With the action we are taking to stimulate the production of white corn, we hope to mitigate the impact of the frosts," Mayorga said at a news conference.

Private exporters reported the sale of 156,100 tonnes of US corn to Mexico last week and the national corn producers' association reckons Mexico will need an additional 4.94 million tonnes of both white and yellow corn imports this year to cover shortfalls.

President Felipe Calderon on Wednesday (Feb 23) visited the state of Sinaloa, the hardest hit by the freeze, where almost all of the nearly one million acres (410,000 hectares) planted with corn were totally or partially damaged.

Outside of the city of Culiacan, Sinaloa, Calderon rode on a tractor to sow corn seeds in a barren field in a symbolic act of solidarity with the state's farmers, who complained government subsidies and insurance payouts for the losses were not arriving fast enough.

The country's vegetable crops were also severely damaged by the cold. Sinaloa is a major exporter of tomatoes and consumers on both sides of the US-Mexico border are feeling the pinch from higher prices on short supplies.

Mexico's Economy Ministry said there was no reason to raise the price of the country's staple food, flat corn patties known as tortillas, because there is enough corn in inventories to meet demand during the replanting period.