What is in this article?:
- Mexico‚Äôs drought destroys crops, endangers life, and opens corn market to U.S. farmers
- Food corn demand trending upward
- Mexico to buy more U.S. corn.
- White corn for food demand is increasing.
- Crisis creating political pressure.
While recent and substantial rains are a promising sign that drought conditions are improving for much of the U.S. Southwest, a cold and dry winter in Northern Mexico has exacerbated conditions there with reports of wide spread famine, escalating food prices and extreme dry conditions that have forced the Mexican government to truck drinking water to nearly a half million residents in remote villages across six northern states where lakes and ground wells have run dry.
In addition, Mexican aid workers have been offering food rations throughout the winter to more than two million residents who are desperately clinging to life in a region that is experiencing its driest period on record.
The drought is credited with destroying some 7.5 million acres of cultivable land in 2011 and is responsible for $1.18 billion in lost harvests and has destroyed about 60,000 head of cattle and weakened two million more causing a substantial spike in food prices.
In addition, officials say acute food and grain shortages caused Mexico’s imports to soar 35 percent last year and they could go even higher in 2012 as conditions worsen.
In a USDA report in late March, Mexico’s grain sorghum imports were expected to increase significantly this spring, and now corn has been added to the import list, providing U.S. growers, especially those in the Southwest, an expanded market for their crops.
“I think we are seeing farmers in the [Texas] Rio Grande Valley opting to grow more grain sorghum than cotton this year as a result of a strong market in Mexico,” reported Dr. Luis Ribera, agricultural economist at the Texas AgriLife Research and Extension Center at Weslaco.
Dr. Mark Welch, grain marketing economist with Texas AgriLife Extension in College Station, says while Texas is not a big corn producing state, he thinks shortages for grain and food corn will cause many U.S. growers to look hard at market potential in Mexico in the months ahead.
“We have been watching corn imports trend higher in Mexico over the last 25 years, but the recent spike related to the drought there is significant as it is not just yellow corn that is in demand, but white corn for food,” Welch says.
In Mexico the shortage of white corn is marked by higher food prices and a shortage in tortillas, a food staple for Mexican families.
“And this is not the first time we have seen an extreme shortage. The last time was in 2008 when corn shortages caused a tortilla crisis that resulted in riots and price limit controls by federal authorities. Coincidentally, this happened in another drought period,” he added. “In January of 2010 U.S. corn exports totaled about 20,000 metric tons. But this year that increased to 60,000 metric tons, so there is a market opening up for U.S. corn growers, especially those across the Midwest who were able to get an early corn crop in the ground.”