Grain and Feed Annual Report Update

An Expert's View about Crops and Support Services in Mexico

Posted on: 29 Apr 2012

Post/New total wheat production and harvested area estimates for MY 2012/13 have been revised downward from Post/Old estimates.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 4/23/2012 GAIN Report Number: MX2023 Mexico Post: Mexico Grain and Feed Annual Report Update Report Categories: Grain and Feed Agricultural Situation Approved By: Erik W. Hansen Prepared By: Benjamin Juarez & Erik W. Hansen Report Highlights: Post/New total wheat production and harvested area estimates for MY 2012/13 have been revised downward from Post/Old estimates due to more complete data from the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) and industry sources. New industry information suggests greater volumes of domestic and imported wheat were used in feed formulations for the livestock sector during marketing years (MY) 2010/11 and MY 2011/12. MX2023 Mexico Grain and Feed Annual Report Update Page 1 General Information: Post/New total wheat production and harvested area estimates for MY 2012/13 have been revised downward from Post/Old estimates due to more complete data from the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) and industry sources. Wheat production suffered in 2011 due to weather-related issues which have led to lower yields for farmers. Moreover, new industry information suggests greater volumes of domestic and imported wheat were used in feed formulations during marketing years (MY) 2010/11 and MY 2011/12. Total wheat import and export estimates have been revised upward from the Post/Old estimate due to newer information from government and industry sources. WHEAT Production Post/New total wheat production and harvested area estimates for MY 2012/13 have been revised downward from Post/Old estimates (published in the end-March 2012 GAIN report MX2018 Prolonged Drought Devastates Grain and Feed Sector) due to more complete data from SAGARPA. Wheat output was reduced due to smaller than expected area planted in the 2011/12 fall/winter crop cycle and adverse weather conditions. Consequently, Post expects wheat output in the 2011/12 fall/winter crop cycle to range from 3.1 to 3.2 million metric tons (MMT) - approximately 16 percent lower than the previous year. Similarly, production and harvested area estimates for MY 2011/112 have been adjusted slightly downward from USDA/Official estimates based on SAGARPA final information. Consumption Post/New MY 2011/12 wheat consumption estimates for feed and residual use has been revised upwards from 1.250 MMT to 1.450 MMT based on new information from industry sources. Similarly, the Post/New MY 2010/11 wheat consumption estimate for feed and residual use has been revised upward by 250,000 MT to 750,000 MT based on this new information. The increased consumption estimates reflects favorable prices leading many in Mexico’s domestic animal husbandry sector to increase volumes of feed quality wheat. Feed manufacturers substituted domestic durum into feed formulas (rather than sorghum) in MY 2011/12 because of its higher nutritional value. Also, the Post/New estimates of FSI consumption for MY 2010/11 and MY 2011/12 have been revised downward slightly from USDA/official figures based on updated information recently provided by the Mexican Millers Association (CANIMOLT). According to CANIMOLT, demand of the wheat milling industry is expect to increase approximately 5 percent in MY 2011/12, assuming expected consumers purchasing power recovery. Trade Post/New wheat import estimate for MY 2012/13 has been increased to 4.3 MMT from Post/Old estimates (see 2012 GAIN report MX2018 Prolonged Drought Devastates Grain and Feed Sector) due to higher than expected decline in domestic production. Also, the Post/New total wheat import forecast for MY 2011/12 has been revised upward from USDA/Official data based data from official data from MX2023 Mexico Grain and Feed Annual Report Update Page 2 SAGARPA and the General Customs Directorate of the Finance Secretariat (SHCP) for the firsts nine months of the MY 2011/12. The United States and Canada will be the main suppliers of wheat during this marketing year. Industry sources stated that demand for imported wheat has been higher than previously expected due to competitive prices during the first months of this marketing year. A large percentage of imported wheat has been devoted to feed use in the livestock sector. However, industry sources have stated that these imports should decrease towards the end of this marketing year as a new harvest of alternatives feed grains become available - mainly sorghum from Tamaulipas. The Post/New total wheat export estimate for MY 2011/12 has increased from USDA/Official and Post/Old estimates as Mexico is continuing to export durum wheat, wheat flour and dry pasta to many countries around the world. Moreover, these figures do take into consideration SAGARPA and SHCP official data for the first nine months of this marketing year. Stocks For MY 2012/13, the Post/New ending stocks estimate has been revised upward from Post/Old estimates to 405,000 MT, due to an expected increase in imports. As a result of new trade and market information, the Post/New MY 2010/11 ending stocks estimate has been lowered from the USDA/Official estimate. Table 1 Mexico: Wheat Production, Supply and Demand for MY 2010/11 to 2012/13 Wheat Mexico 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Harvested 681 681 670 65 600 Beginning Stocks 520 520 440 385 475 Production 3,679 3,679 3,700 3,640 3,200 MY Imports 3,462 3,457 4,500 4,800 4,300 TY Imports 3,462 3,457 4,500 4,800 4,300 TY Imp. from U.S. 2,939 2,849 0 4,000 3,550 Total Supply 7,661 7,656 8,640 8,825 7,975 MY Exports 821 821 800 900 600 TY Exports 821 821 800 900 600 Feed and Residual 500 750 1,250 1,450 700 FSI Consumption 5,900 5,700 6,100 6,000 6,270 Total Consumption 6,400 6,450 7,350 7,450 6,970 Ending Stocks 440 385 490 475 405 Total Distribution 7,661 7,656 8,640 8,825 7,975 1000 HA, 1000 MT, MT/HA For More Information FAS/Mexico Web Site: We are available at www.mexico-usda.com or visit the FAS headquarters' home page at www.fas.usda.gov for a complete selection of FAS worldwide agricultural reporting. Other Relevant Reports Submitted by FAS/Mexico: MX2023 Mexico Grain and Feed Annual Report Update Page 3 Report Title of Report Date Number Submitted MX2018 Prolonged Drought Devastates Grain and Feed Sector 03/30/2012 MX2008 Mexico Looks to Source More Dry Beans 02/13/2012 MX2003 Mexico Looks to Increase Imports of Dry Beans 01/18/2012 MX1101 December Grain and Feed Update - Bean Production Forecast 12/22/2011 Lower MX1095 Rice Production Forecast Lower 12/12/2011 MX1059 Grain and Feed July Update 07/25/2011 MX1048 Grain and Feed June Update 06/20/2011 MX1043 Grain and Feed May Update -- Sorghum Situation 05/25/2011 MX1033 Grain and Feed April Update 04/29/2011 MX1017 2011 Grain and Feed Annual 03/14/2011 MX1012 Hard Freeze Damages Sinaloa Corn and Produce 02/11/2011 Useful Mexican Web Sites: Mexico's equivalent to the U.S. Department of Agriculture (SAGARPA) can be found at www.sagarpa.gob.mx , equivalent to the U.S. Department of Commerce (SE) can be found at www.economia.gob.mx and equivalent to the U.S. Food and Drug Administration (SALUD) can be found at www.salud.gob.mx. These web sites are mentioned for the readers' convenience but USDA does NOT in any way endorse, guarantee the accuracy of, or necessarily concur with, the information contained on the mentioned sites. MX2023 Mexico Grain and Feed Annual Report Update Page 4
Posted: 29 April 2012

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