GRAIN
UPDATES
A different perspective
Mexico buyers share their concerns , learn our ways
12
By Joe Kelley
United Ag hosted a tour of sorghum buyers from Mexico . The tour was arranged by the United States Grain Council as part of an ongoing effort to establish , maintain and increase market share of U . S . grain in foreign markets . This group of young business leaders represented some of Mexico ’ s greatest concerns in grain from central and northern Mexico . The majority of the group lives in places such as Jalisco , Michoacán and Sonora States . The purpose of this trade mission was for the Mexican buyers to see all segments of the U . S . supply chain , from grower to ports . The group started off in Texas and proceeded to Kansas before returning to Mexico .
As most Texas farmers know , Mexico was the largest consumer of grain sorghum until China entered the market several years back . Once China entered the market , grain sorghum was basically priced out of the Mexican feed market . A lot of the U . S . grain market ’ s attention over the past several years has been focused on China , a shift in forcus from of our country ’ s long-term trade partners , such as Mexico . This was not intentional , but merely a result of market forces at work . When a consumer or country with a billion plus people enters the market , that action in and of itself will naturally cause a shift in bushels and supply / demand forces . This in turn makes for a dynamic and robust trading environment .
According to reports from the USGC , Mexico is definitely a major player in the world markets . It is considered to be the fourth largest feed producer in the world — producing an estimated 33.87 million metric tonnes per year . Jalisco represents the largest portion of that production within Mexico , with 17 percent of Mexico ’ s domestic production — 5.76 million metric tonnes . In U . S . truckload equivalents , this equates to about 230,400 truckloads on a yearly basis or 631 truckloads a day produced just to satisfy the needs of Jalisco state . This doesn ’ t include the production of Sonora state with its 3.73 million metric tonnes and Michocacan ’ s 1.02 million metric tonnes . These numbers include feed that is manufactured with Mexico ’ s domestic crops and grain imported from the U . S . and other parts of world .
The group from Mexico had representatives from various feed mills and animal industries , including poultry , cattle , swine and aquaculture . These trade missions are great business development tools as they help us gain an understanding of a potential customer ’ s needs , challenges , and expectations . Additionally , they serve as a conduit to exchange ideas and learn of new or different technology that may be employed , that either the visitors or the hosts may not of been aware of or have first hand knowledge of . For example , during this last visit , one of the feed mills in Mexico explained how they are successfully using cool air technology , essentially big air conditioners on their grain tanks to keep insect activity at a minimum . The grain / air in the tank is cooled to 50˚ F . This technology is currently used in Europe and is gaining in popularity in Latin America .
The message we conveyed to one of our country ’ s largest agricultural trading partners was our farmers ’ overall efficiency and ability to produce and be responsive to our customers needs on a consistent basis through all segments of the supply chain — from field to spout .
United Ag ’ s Port of Victoria facility and other United Ag locations are regulars on the USGC itinerary , and the response that we receive from the visitors is positive . We always get a lot of questions asked and photos taken of the facilities . Aside from
UA ’ s tangible assets , it is our processes , protocols and offerings ( software , settlement procedures , contract options , and ancillary services such as trucking and One Sample Strategy participation ) combined that make transacting business with United Ag — from a grain buyer ’ s perspective — an efficient and painless transaction .
In addition , UA is available to offer insight into how the U . S . side of the grain origination equation works and the challenges and opportunities those events present . The second stop for the Mexico group while they were here in Victoria was the row crop and fish farming operation of 5B Farms . Darrell gave a succinct recap of the real world challenges of row crop that this region faces ( keep in mind the day of the group ’ s visit was the first day of heavy rain in the area ). It was noted that the day before the group arrived Victoria , area farmers had a 12 ” plus moisture deficient . In one day 5B Farms received about 4 ” of rain with more to come . Darrell mentioned that in their area , if farmers have beneficial weather they might be able to make much higher yielding corn as compared to grain sorghum . He then mentioned the significant amount of inputs required in time and money to combat sugar cane aphids , stink bugs and other pests . The take away : when grain prices are strong , grain sorghum can be worth the effort ; however , in times of weak demand for grain sorghum , one is forced to look at other crops such as yellow corn and cotton .
The buyers from Mexico really appreciated their half day in Victoria seeing the grain sorghum in the fields , hearing the challenges of the U . S . farmer , seeing the facilities , and learning of United Ag ’ s offerings and value in the supply chain . These buyers purchase more than one commodity . Therefore , if there isn ’ t a lot of grain sorghum in the area to purchase this year , they are aware of the yellow corn , cotton , and cottonseed that is in the area .