Report Highlights:

Mexican sorghum production has been plagued with a serious sugarcane aphid (SCA) infestation resulting in reduced crop yields, harvest efficiency reduction, and in some areas severe crop loses. A mixed production forecast for marketing year (MY) 2015/16 with wheat production forecast revised up, sorghum and rice down, and corn holding steady. For MY 2014/15, corn and rice production is forecasted to be up along with a slight increase in corn imports.

Wheat

Production

The Post/New MY2015/16 (July/June) wheat harvested area and production forecasts have been revised upward from USDA/Official forecasts based on updated information from Mexico's Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Foodstuffs (SAGARPA) as of September 30th, 2015.

Stocks

The Post/New ending stocks estimate for MY2015/16 (575,000 MT) is higher than the USDA/Official estimate as a result of higher-than-expected production.

Mexico, Wheat Production, Supply and Demand for MY2013/14 to MY2015/16

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

638

638

707

707

700

823

Beginning Stocks

275

275

316

316

495

495

Production

3377

3377

3687

3687

3700

3780

MY Imports

4636

4636

4446

4446

4400

4400

TY Imports

4636

4636

4446

4446

4400

4400

TY Imp. from U.S.

3156

3156

3065

3065

0

3250

Total Supply

8288

8288

8449

8449

8595

8675

MY Exports

1322

1322

1104

1104

1100

1100

TY Exports

1322

1322

1104

1104

1100

1100

Feed and Residual

350

350

400

400

400

400

FSI Consumption

6300

6300

6450

6450

6600

6600

Total Consumption

6650

6650

6850

6850

7000

7000

Ending Stocks

316

316

495

495

495

575

Total Distribution

8288

8288

8449

8449

8595

8675

(1000 HA) ,(1000 MT)

Corn

Production

The Post/New corn production estimate and area harvested for MY2014/15 (October to September) have been revised upward, based on updated official data from SAGARPA. Official sources stated that results for the 2014/15 fall/winter crop cycle have been better than previously estimated due to favorable weather conditions. For example, according to SAGARPA figures, as of September 30th, 2015, yields obtained in Sinaloa, the main corn producing state in the Northwest Region of Mexico, were higher-than-initially estimated (10.505 MT/Ha against 10.381 MT/Ha) as a result of these favorable weather conditions. The forecast production for the MY2015/16 remains unchanged from the USDA/Official estimate.

Consumption

The Post/New total corn consumption estimates for MY2014/15 and MY2015/16 have been revised upward from USDA/Official data, based on new information from official and private sources. Feed consumption is expected to shift from sorghum to corn, due to lower-than-previously estimated domestic sorghum production combined with more affordable corn prices. Animal feed demand for sorghum is expected to continue to ease in MY2015/16 as corn will make for a cheaper feed use alternative.

Trade

The Post/New total corn import estimate for MY2014/15 has been revised slightly upward from USDA/Official data to 11.2 MMT. The revised data reflects the updated official information from SAGARPA and the General Customs Directorate of the Finance Secretariat (SHCP) for this marketing year. Private traders stated Mexican feed grain importers have opted to import higher levels of feed corn instead of sorghum, as the price difference has continued to be very favorable to corn in the last few months. Similarly, Post's corn export estimate for MY2014/15 has increased to 811,000 MT from the USDA/Official estimate. These figures are also based on official figures from SAGARPA and SHCP for this marketing year.

Stocks

Post's ending stock estimate for MY 2014/15 (4.113 MT) is higher than the USDA/Official estimate as a result of higher-than-expected domestic production and imports. This was reflected in the carry over for the MY 2015/16 which was also adjusted downward.

Mexico, Corn Production, Supply and Demand for MY2013/14 to MY2015/16

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

7052

7052

7300

7325

7000

7000

Beginning Stocks

1061

1061

2694

2694

3944

4113

Production

22880

22880

25000

25480

23500

23500

MY Imports

10954

10954

11000

11200

10500

10500

TY Imports

10954

10954

11000

11200

10500

10500

TY Imp. from U.S.

10912

10912

0

11200

0

10500

Total Supply

34895

34895

38694

39374

37944

38113

MY Exports

501

501

500

811

500

500

TY Exports

501

501

500

811

500

500

Feed and Residual

15200

15200

17500

17700

17200

17500

FSI Consumption

16500

16500

16750

16750

16800

16800

Total Consumption

31700

31700

34250

34450

34000

34300

Ending Stocks

2694

2694

3944

4113

3444

3313

Total Distribution

34895

34895

38694

39374

37944

38113

(1000 HA) ,(1000 MT)

Sorghum

Production

The Post/New total sorghum production and harvested area estimates for MY 2015/16 have been revised downward, based on updated official data. According to the Mexican National Sorghum Council (CONASORGO) and official sources, this drop in production is attributed to a serious infestation of an aphid pest called sugarcane aphid (SCA), which also had adversely affected some producing areas in Tamaulipas in the 2014/15 fall/winter crop cycle. In the current 2015 Spring/Summer crop cycle several sorghum producing states have also been plagued with the aphid infestation resulting in reduced crop yields, harvest efficiency reduction, and in some areas severe crop loses, among them Guanajuato, the second largest sorghum producing state.

Private sources stated the main problem in Guanajuato was that growers and government officials were not prepared to deal with the aphid infestation despite the presence of this pest last year in other sorghum producing states. In addition, effective pest control measures have been further complicated by the fact that many small growers operate on a small scale and have limited means to suddenly treat crops when SCA outbreaks take shape, mainly in the rain-fed planted areas. Official sources stated, for example, that approximately 1,000 sorghum growers out of a total of 31,000 lost some or all of their crops due to the pest and all of them were small growers located in non-irrigated areas.

Another factor that caused the pest infestation was the unusually high heat and atypical heavy rains. Reportedly, these adverse weather conditions had not been registered in the last 60 years in Guanajuato. Reportedly, where growers treated their sorghum crop, they used a wide variety of chemical products, but some of them were not adequate to control the infestations. In addition, with many small-scale farmers operating on small areas of land, they have had limited application options. Many applied inefficient dust-type insecticides or used hand-held sprayers. Water volumes and pressure were likely inadequate to achieve necessary coverage. In addition, another problem Guanajuato sorghum growers have faced was the substantial increase in prices of these chemicals, due to the strong demand. Reportedly, chemical prices rose from 120 pesos per hectare (roughly US $7/ha) to about 400 pesos per hectare (US $23.5/Ha). As a result, official and private sources estimate that Guanajuato's sorghum production could reach approximately 1.0 MMT in the 2015 spring/summer crop cycle, against 1.5 MMT initially forecasted.

The Post/New total sorghum production and harvested area estimates for MY2014/15 have been revised downward and upward, respectively, from USDA/Official estimates based on final official data from SAGARPA. These statistics include final results of the 2014 spring/summer crop cycle as well from available information from SAGARPA as of September 30th, 2015, for the 2015/16 fall/winter crop cycle.

Consumption

The total sorghum consumption estimate for MY2015/16 has been decreased from the USDA/Official estimate based on information obtained from industry contacts and SAGARPA. These contacts stated that the lower domestic production than was previously anticipated would increase domestic sorghum prices further and will provoked a decrease for animal feed demand.

Private sources stated that they expect total sorghum feed demand to fall by around 6 percent in MY 2015/16, compared with the USDA/Official estimate, as the relative spread between sorghum and corn production could widen to its highest level in years, thus encouraging substitution to yellow corn.

For MY2014/15, the total consumption estimate has been also revised downward compared to the USDA/Official figure, and based on information from private sources, who expect unattractive prices for the livestock sector in this marketing year.

Trade

The Post/New sorghum import estimate for MY2014/15 has been revised downward from USDA/Official estimate to 28,000 MT, based on preliminary official data from SAGARPA and SHCP. Similarly, Post/New MY2014/15 sorghum exports estimate has been revised upward from 7.0 MMT to 8.0 MMT based also on updated official information from SAGARPA and SCHP.

Stocks

Ending stocks for MY2015/16 and MY 2014/15 have been revised downward from the USDA/Official estimate, due to lower production than previously estimated in both marketing years.

Mexico, Sorghum Production, Supply and Demand for MY2013/14 to MY2015/16

Sorghum

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2073

2073

1666

1715

1900

1700

Beginning Stocks

285

285

647

647

576

337

Production

8500

8500

6686

6270

7800

7150

MY Imports

162

162

50

28

50

50

TY Imports

162

162

50

28

50

50

TY Imp. from U.S.

162

162

0

28

0

50

Total Supply

8947

8947

7383

6945

8426

7537

MY Exports

0

0

7

8

0

0

TY Exports

0

0

7

8

0

0

Feed and Residual

8200

8200

6700

6500

7600

7100

FSI Consumption

100

100

100

100

100

100

Total Consumption

8300

8300

6800

6600

7700

7200

Ending Stocks

647

647

576

337

726

337

Total Distribution

8947

8947

7383

6945

8426

7537

(1000 HA) ,(1000 MT)

Rice

Production The Post rice production estimate for MY 2015/16 (October-September) has been revised downward from USDA/Official estimate to 197,000 MT (rough production) due to more complete data from SAGARPA, which reflects lower-than-previously expected planted area. The decreased rough production is equivalent to 135,000 MT of milled rice.

According to private sources, the reduction in planted area was mainly due to a lack of planting different rice varieties than from the usual "Philippine Miracle" variety traditionally planted in Mexico. According to private sources, this variety of rice cannot compete well on cost with rice imported from the U.S. or Asian countries. The lack of access to financing by Mexican growers also contributed to the reduction in planted area. The main states that reduced their planted area were Veracruz, Nayarit, Michoacan and Campeche, with approximately 5,000 hectares less than initially estimated. The originally projected planted area for the 2015 spring/summer crop cycle of 33,000 ha reached only 24,350 ha.

The Post/New rice production and harvested area estimates for MY2014/15 has been revised upward from USDA/Official, to 261,000 MT (rough production) based on final official data from SAGARPA as of September 30th, 2015. The increased rough production is equivalent to 179,000 MT of milled rice.

Trade

In comparison with the USDA/Official estimate, the Post/New import estimate for MY 2014/15 was increased to 694,000 MT, in order to reflect available information from SAGARPA and SHCP for this marketing year. At the same time, Post/New MY2014/15 rice exports estimate has been revised downward based also on updated official information from SAGARPA and SCHP.

Stocks

The MY 2014/15 Post/New ending stocks estimate was revised upward from the USDA/Official estimate to 152,000 MT due to higher than previously expected domestic production and imports. This was reflected in the carry over for the MY 2015/16 which was also adjusted upward.

Mexico, Rice Production, Supply and Demand for MY2013/14 to MY2015/16

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

35

35

43

44

41

34

Beginning Stocks

189

189

151

151

110

152

Milled Production

131

131

172

179

165

135

Rough Production

191

191

250

261

240

197

Milling Rate (.9999)

6870

6870

6870

6870

6870

6870

MY Imports

693

693

660

694

700

700

TY Imports

658

658

680

700

700

700

TY Imp. from U.S.

535

535

0

619

0

630

Total Supply

1013

1013

983

1024

975

987

MY Exports

2

2

3

2

3

3

TY Exports

2

2

3

2

5

5

Consumption and Residual

860

860

870

870

870

870

Ending Stocks

151

151

110

152

102

114

Total Distribution

1013

1013

983

1024

975

987

(1000 HA) ,(1000 MT)