WASHINGTON, D.C. — As renegotiation talks began last week over the North American Free Trade Agreement (NAFTA), growers say they believe Mexico’s recent takeover as the top importer of U.S. corn should only double as it begins to expand its ethanol fuel use.

 

Largely because of its increased appetite for livestock feed, Mexico took over as the top importer of U.S. corn last year, a position that Japan held for many years. With two months left in the current marketing year, Mexico already has imported more U.S. corn than it did last year – in 10 months, through the end of June, Mexico bought nearly 10.2 million metric tons (mmts), slightly more than it purchased during the previous 12 months.

And to Jim Raben, a corn grower in

southeastern Illinois and chair of the Illinois Corn Marketing Board (ICMB), Mexico’s need for even more U.S. corn will increase as it embarks on a nationwide program to use a 10 percent blended ethanol fuel.

“Mexico is taking steps to allow its entire domestic unleaded gasoline market to move toward an E10 blend, the practical impact on corn demand of the move being that the equivalent corn exports to that nation will almost double,” Raben said.

He lauded the efforts of the ICMB,  which not only recently hosted a group of Mexican buyers but paid for and provided valuable information and research that swayed national leaders.

The Illinois corn checkoff program, he said, was “an integral part of this  development. Research that the corn checkoff funded in air quality and lifecycle analysis of corn ethanol was an important consideration by Mexican regulators.”

Raben also noted a fuel market specialist under contract by the group provided technical information “that moved the needle in the Mexican retailers’ understanding of the on-the-ground changes that will be necessary to complete the evolution to E10.”

He added that the export market looks brighter because Japan also is considering using more ethanol – and with global sugar prices climbing, Brazil is replacing sugar cane with U.S. corn for its ethanol needs.

“Talks are ongoing in Japan, as regulators in Tokyo are looking for sustainable fuel options to help meet their obligations under the Paris Climate Accord,” Raben said.

While Mexico overtook Japan as the top importer of U.S. corn, Japan remains a healthy second, buying nearly 9.9 mmts for the 10 months ending in June. That total is up about 48 percent over the previous year’s import amount of 6.9 mmts.

Also making a big jump importing U.S. corn is South Korea, now in third place with 4.4 mmts through June, an increase of about 170 percent over the previous 12 months, according to USDA statistics.

Kevin Skunes with the National Corn Growers Assoc. noted that overall U.S. exports account for at least one-third of U.S. corn farmers’ income. He said he’s hopeful that any changes to NAFTA will only enhance future ag trade with Mexico and Canada.