November 18, 2004

 

 

Mexico's 2004-05 Corn Production to Increase

 

Mexico's 2004/05 corn production is forecast to increase, based on greater planted area and expectations of higher yields as a result of good weather, according to the USDA.

 

Therefore, the MY 2004/05 import estimate for corn has been reduced to 6.0 million metric tons.

 

CORN

 

Production

 

MY 2004/05 (Oct-Sep) corn production is forecast at 20.7 million MT, due to greater-than-expected planted area and the expectation of good weather conditions. MY 2004/05 area harvested is forecast at 7.95 million hectares, a 3-percent increase from last year's revised estimate.

 

The MY 2003/04 production and harvested area estimates have been revised upward, based on final official data from the Ministry of Agriculture (SAGARPA) as well as from industry sources. In Sinaloa, production for the 2003/04 fall/winter crop reached 3.9 million MT, rising 48 percent from last year, due to greater-than-originally-estimated planted area, favorable weather conditions, and good government supports. Sinaloa planted area increased from the 245,000 hectares initially expected to approximately 455,000 hectares. Official sources stated that corn acreage increased dramatically because of better government support for Sinaloa white corn growers. The Sinaloa harvest started in May and ended in June. Sinaloa is the main source of commercial white corn in Mexico during the spring and summer months. Production estimate for MY 2002/03 remains unchanged.

 

Consumption

 

For MY 2004/05, total corn consumption is forecast at 26.9 million MT, a 1.5- percent increase over the earlier forecast, due to strong feed demand and the expectation that corn prices will remain lower than sorghum prices. Feed miller producer organizations expect MY 2004/05 feed consumption to increase approximately 3.5 percent, due to strong demand from the livestock and poultry industries.

 

MY 2003/04 corn consumption is estimated to increase to 26.4 million MT, due to increased demand in the livestock sector, mainly in the poultry industry. The poultry industry is the major consumer of feed corn and sorghum. In MY 2003/04 poultry meat production increased 5 percent and is forecast to continue growing in MY 2004/05. Feed corn consumption has also increased, due to increased grain finishing of cattle in Mexico as producers seek to increase the quality and value of their products in order to meet expected demand for grain-fed beef in Japan, the United States and the domestic market. This increase in total corn consumption also reflects an increase in human consumption in MY 2003/04 based largely on population growth and a slight improvement in the consumer purchasing power. The consumption estimate for MY 2002/03 remains unchanged.

 

Trade

 

MY 2004/05 imports are forecast to decrease to 6.0 million MT, because of greater domestic corn production. Both MY 2003/04 and 2002/03 import estimates have been revised downward in accordance with final official data issued by the Secretariat of Economy.

 

Stocks

 

MY 2004/05 ending stocks are forecast to remain practically unchanged at 3.9 million MT. The Y 2003/04 ending stock estimate was raised based on higher than previously estimated production. The MY 2002/03 ending stock estimate was revised downward, due to lower-than-expected import volume. Generally, private feed millers keep between one to two month's supply of feed in stock.