The U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) raised Mexico’s MY2008-09 corn (maize) production estimate to 23.7 million tonnes, from 23.5 million tonnes, based on the latest government of Mexico data and better weather conditions. The corn consumption estimate was revised upward to 16.2 million tonnes. The wheat production estimate remained unchanged at 3.89 million tonnes.

 

The country’s MY2008-09 forecast for domestic feed consumption was reduced to 16.3 million tonnes. The FAS said the country’s use of corn for feed should decline due to the expected sluggish demand from livestock producers. Several sources anticipate a recession in the economy and higher inflation as a result of the world financial crisis. Due to higher expected inflation and an adverse economic climate, private economists estimate that consumer purchasing power could be less in CY 2009. However, the food consumption estimate was revised upward to 16.2 million tonnes, since the domestic demand for meat products should decrease because of high prices, which will force low-and middle-income consumers to find less expensive protein sources, such as tortillas.

 

The FAS maintained its previous productions forecast of 6.2 million tonnes, based on normal weather conditions, average planted area, the progress of the 2007-08 sorghum crop, and official information. Mexico’s MY2008/09 import estimate for sorghum was increased to 1.5 million tonnes, assuming more affordable prices for sorghum, the FAS said. Similarly, the consumption estimate was revised upward based on updated information from the industry, which reflects an expected substitution of corn for sorghum, mainly by the poultry industry. The poultry industry continues to be the major consumer of sorghum in Mexico.

 

The MY2007-08 production forecast figures for wheat were unchanged at 3.59 million tonnes. Likewise, the MY2007-08 Mexican wheat production forecast remained at 3.89 million tonnes. The MY2008-09 import forecast was revised to 3 million tonnes, 2.8% lower than the previous year’s revised figure due to the expected increased production of Soft Red Winter in the Bajio, Mexico area.

 

The FAS said the U.S. and Canada will continue to be the main wheat suppliers to Mexico where prices will play a large role in deciding the source and amount of imports.