OIL MEAL PRODUCTION

The Post/New total Mexican oil meal production forecast for MY 2015/16 is 4.37 million metric tons (MMT), 3.3 percent higher than the revised estimate for MY 2014/15. The revised higher estimate is driven by greater demand for oil meal generated from the livestock and poultry sectors. Mexico's 2015 beef and pork sector outlook, for example, is more optimistic compared to 2014, mainly due to strong market incentives for livestock producers that have resulted in higher than expected slaughter rates. The Post/New total meal production estimate for MY 2014/15 was revised slightly upward from USDA/Official estimates, reflecting updated industry information. High-protein soybean meal continues to account for approximately 80 percent of total Mexican oil meal production. Production of oil meal from imported rapeseed and canola remains at about 20 percent of total meal use.

Soybean Meal Production

Soybean meal production is forecast to increase 3.7 percent to 3.48 MMT for MY 2015/16, anticipating a higher crushing level, which is mainly the consequence of the expected strong demand from the livestock and poultry sectors. Soybean meal capacity remains highly concentrated in the hands of few companies (i.e. Agydsa, Ragasa, Proteinas y Oleicos and Cargill, among others). Private analysts stated that due to the dynamism of the domestic soybean meal and vegetable oil markets, the leading crushers and vegetable oil refiners in Mexico have expanded their facility capacities. It is expected in 2015 some of these companies will continue to invest, seeking to expand capacity and modernize their facilities even more.

Rapeseed Meal Production

As a result of growth in domestic pork production, the Post/New rapeseed meal production for MY 2015/16 is forecast to increase 1.7 percent. The pork industry continues to be a major consumer of rapeseed meal. Industry sources stated that the demand for rapeseed meal from the pork sector will be solid in 2015 as better genetics combined with lower grain prices are contributing to lower production costs across the Mexican pork production chain. Consequently, pork industry members continue to strengthen and expand the productivity of their nearly 5,600 farms to take advantage of expected better margins due to lower feed costs and continued favorable domestic pork prices. It is expected that this will also allow the swine industry to produce enough pork to meet anticipated export demand for the Japanese, Korean and Chinese markets.

Sunflower Seed Meal Production

The Post/New Sunflower Seed meal production forecast for MY 2015/16 is 13,000 MT, as a result of the expected higher domestic production of this oilseed and the relatively strong demand from the livestock industry. Livestock, typically beef and dairy cattle consume sunflower meal as part of their feed ration. The Post/New sunflower seed meal production estimate for MY 2014/15 has been revised upward from USDA/Official estimates due to new industry information.

MEAL CONSUMPTION

Total meal consumption is expected to increase approximately 3.9 percent to 5.99 MMT in MY 2015/16 due to the expected growth of the livestock sector, mainly the poultry and pork industries. In the case of the poultry sector, this industry is expected to continue to expand and modernize. According to the National Union of Poultry Farmers (UNA), the Mexican poultry industry, as a whole, will grow by 2.5 percent in 2015. The UNA also predicted that egg production in Mexico will grow by 2.0 percent during this year. Meanwhile, it's predicted chicken meat production will grow 2.5 percent, reaching 3.0 MMT. The Association noted that in 2014, the Mexican poultry industry grew by 2.8 percent compared to the level obtained in 2013. Last year the poultry sector produced 5.57 MMT tons of food products, of which 3 MMT was poultry meat and 2.57 MMT of eggs. In 2014, production of poultry meat increased 3 percent compared to the level achieved in 2013. Regarding the poultry egg industry sector, it grew 2.5 percent in 2014 compared to the previous year. Globally, Mexico is the seventh largest producer of chicken after United States, China, Brazil, EU, India and Russia. In the same context, Mexico ranks sixth in egg production, behind China, USA, India, Japan and Russia. Mexico is the number one consumer of eggs in the world and its poultry sector continues to be the major user of oilseed meals in Mexico.

The Post/New total oil meal consumption figures for MY 2013/14 and MY 2014/15 have revised slightly downward and upward, respectively, from USDA/Official estimate figures reflecting the most recent industry information.

Soybean Meal Consumption

Soybean meal is likely to continue to be the main meal choice for the poultry and hog industries. For MY 2015/16, soybean meal consumption is forecast to increase to 5 MMT, compared with Post estimate of MY 2014/15, as demand for poultry and pork products continue to grow. Private sources stated that another factor that should impulse greater soybean meal demand is the increase of crushing capacity from leading companies, as noted previously. Private sources also state that due to soybean meal's better nutritional characteristics compared with other oil meal options, soybean meal should continue to be the ingredient of choice for the poultry and hog industries.

Rapeseed Meal Consumption

MY 2015/16 rapeseed meal consumption is expected to increase to 935,000 MT. Rapeseed meal consumption estimate for MY 2013/14 has been revised downward in accordance with information obtained from industry sources. Industry sources noted rapeseed meal has lower protein content than soybean meal and fewer key amino acids. Therefore, rapeseed meal is an economical protein source for animals that do not have high energy or lysine requirements. Rapeseed (or canola) meal is primarily fed to cattle and pigs as part of a feed ration. Moreover, canola meal is also used to feed dairy cows because the high fat content of the meal enhances milk production. Poultry can also be fed canola meal as a protein source, although limited crushing locations, high fiber content, and low palatability limit feeding rates. Reportedly, three Mexican crusher companies are crushing approximately 90 percent of total imported rapeseed (or canola).

Sunflower Seed Meal Consumption

MY 2015/16 sunflower seed meal consumption is forecast to increase to 13,000 MT, reflecting the expected strong livestock demand. Sunflower seed meal is considered an excellent livestock feed, especially for ruminants. The sunflower seed meal consumption estimate for MY 2014/15 has been adjusted upward based on recent information from private and official sources.

MEAL TRADE

The Post/New total meal import estimate for MY 2013/14 has been revised downward from USDA/Official estimate, based on updated data from GTA. For MY 2015/16, it is expected that the total meal import forecast will remain unchanged at 1.66. High protein soybean meal from the United States should again capture about 99 percent of total meal import market, as it has for the past few years.

Rapeseed Meal Trade

The Post/New rapeseed meal and canola import estimate for MY 2013/14 was revised downward from USDA/Official estimate based on revised GTA data. For MY 2015/16, however rapeseed meal imports are expected to remain unchanged at 60,000 MT given the expected increase in domestic production.

Soybean Meal Trade

Similarly, for MY 2015/16 the soybean meal import forecast is expected to remain stable at the same level as in MY 2014/15, also due to the expected increase in domestic production.

Distillers Dried Grain with Solubles (DDGS) Trade

According to animal feed industry sources, demand for Distiller's Dried Grains with Solubles (DDGS), a co-product of corn-based ethanol production that is used mainly as an animal feed protein supplement, has been decreasing over the last few years, with the exception being CY 2014. Despite the higher volume imported in CY 2014, it is still lower than the peak reached in 2011. These sources indicated that DDGS has been regularly used as a substitute for oilseed meal in feed concentrate formulas. However, as international prices of soybean meal have declined, the Mexican livestock and feed industry have increased its use of soybean meal, resulting in a gradual decrease in DDGS imports. Private sources estimate U.S. DDGS exports to Mexico will remain relatively steady to strong in 2015, compared with 2014 DDGS export levels.

Mexico: Production, Supply, and Distribution (PSD) for Total Meals

Total Oil-Meals

Market Begin Year

2013

2014

2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

5495

5497

5756

5770

0

5951

Beginning Stocks

57

57

83

81

0

174

Production

4027

4027

4225

4230

0

4372

MY Imports

1465

1458

1660

1660

0

1660

MY Imp. from U.S.

1445

1445

1641

1640

0

1640

MY Imp. from EU

0

0

0

0

0

0

Total Supply

5549

5542

5968

5971

0

6206

MY Exports

19

19

20

20

0

20

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

50

50

50

50

0

50

Feed Waste Dom. Cons.

5397

5392

5722

5727

0

5948

Total Dom. Cons.

5447

5442

5772

5777

0

5998

Ending Stocks

83

81

176

174

0

188

Total Distribution

5549

5542

5968

5971

0

6206

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Soybean Meal

Meal, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Sep 2013

Sep 2014

Sep 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

4,030

4,030

4,250

4,250

0

4,400

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

54

54

80

80

0

168

Production

3,185

3,185

3,358

3,358

0

3,484

MY Imports

1,410

1,410

1,600

1,600

0

1,600

MY Imp. from U.S.

1,410

1,410

1,600

1,600

0

1,600

MY Imp. from EU

0

0

0

0

0

0

Total Supply

4,649

4,649

5,038

5,038

0

5,252

MY Exports

19

19

20

20

0

20

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

50

50

50

50

0

50

Feed Waste Dom. Cons.

4,500

4,500

4,800

4,800

0

5,000

Total Dom. Cons.

4,550

4,550

4,850

4,850

0

5,050

Ending Stocks

80

80

168

168

0

182

Total Distribution

4,649

4,649

5,038

5,038

0

5,252

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Rapeseed Meal

Meal, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

1,450

1,450

1,490

1,490

0

1,520

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

3

3

3

1

0

6

Production

835

835

860

860

0

875

MY Imports

55

48

60

60

0

60

MY Imp. from U.S.

35

35

40

40

0

40

MY Imp. from EU

0

0

0

0

0

0

Total Supply

893

886

923

921

0

941

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

890

885

915

915

0

935

Total Dom. Cons.

890

885

915

915

0

935

Ending Stocks

3

1

8

6

0

6

Total Distribution

893

886

923

921

0

941

1000 MT, PERCENT

Mexico: Production, Supply, and Distribution (PSD) for Sunflower Seed Meal

Meal, Sunflower seed

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Mexico

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

15

17

16

30

0

31

Extr. Rate, 999.9999

0.4667

0.4118

0.4375

0.4

0

0.4194

Beginning Stocks

0

0

0

0

0

0

Production

7

7

7

12

0

13

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

1

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

7

7

7

12

0

13

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

7

7

7

12

0

13

Total Dom. Cons.

7

7

7

12

0

13

Ending Stocks

0

0

0

0

0

0

Total Distribution

7

7

7

12

0

13

1000 MT, PERCENT