Mexican Buyers of U.S. Corn Concerned about Quality

March 6th, 2018


Category: Grains, Policy

(Wallaces Farmer) –  Mark Mueller, a farmer from Waverly in northeast Iowa, traveled to Mexico City in February to share the farmer’s perspective as he helped roll out the U.S. Grains Council 2017-18 Corn Harvest Quality Report. He discussed the report with key customers in southern Mexico.

“I shared an overview of the 2017 growing season in general and of my farm,” says Mueller, a member of the board of directors of the Iowa Corn Growers Association. “I fielded questions concerning planting intentions, the new farm bill, NAFTA, grain quality and foreign competition. The dynamics of each meeting differed and showed me how the interpersonal relationships formed by our ICGA staff are invaluable to the USGC mission.

“In this part of the world, few things are more important than relationships. Our customers need to hear from us that we want and appreciate their business, which is more important than ever as we face increased global competition and the uncertainty of the NAFTA negotiations.”

Quality concerns
The Corn Quality Report Roll Out has become a highly anticipated event for both current and potential customers who buy U.S. corn. The report on the 2017 crop revealed that much of 2017’s corn crop conditions were rated good or excellent during the growing season. That led to strong plant health, good kernel size and a projected record production of 14.58 billion bushels — second-largest U.S. crop on record.

Representing Iowa Corn, Mueller attended three roll-out meetings held in Tehuacan, Guadalajara and Merida. Markets in these regions differ both in the type of livestock being fed and how corn arrives in a specific region. The investments of Iowa Corn in the U.S. Grains Council help increase demand for U.S. corn and coproducts around the world. Part of this support includes helping fund two staff positions in the Mexico office.

“The logistics of moving grain sometimes leads to quality concerns,” Mueller says. “There is minimal handling involved for corn coming by train, while grain traveling by ship is handled more by the time it reaches its destination providing for a greater chance of quality issues.”

For example, grain for Guadalajara, located on the western side of the country, usually arrives by unit train through Texas. Merida, capital of Yucatan on the eastern side of the country, gets all corn by ship, usually loaded in the Port of New Orleans. The group at Merida were the most vocal group about grain quality issues. The U.S. is known for its top-quality grain and its reliability. It’s important we continue to deliver high quality corn to our customers.”

Feed millers, hog producers
In Guadalajara, 30 businesspeople attended the rollout including representatives from both the feed-milling association and cattle, hog and poultry producers, along with their suppliers. The meeting in Techuacan was the first time in five years this group met with USGC staff as they work to re-establish relationships in this region.

It included three pork and poultry feeders who purchase three Panamax vessels of corn (1.4 million bushels per ship) at the Port of Veracruz every two months. In Merida, the meeting was with a group of feed millers and poultry, swine and cattle producers. They import grain by Panamax ship through the Port of Progresso.

“Participants at our meetings made it clear that South American corn suppliers have stepped up their marketing and the uncertainty over the NAFTA trade renegotiations has made some customers pay attention to them,” Mueller says. “I was able to convey the urgency with which Corn Belt crop producers are stressing the importance of NAFTA to our U.S. elected officials.”

Mueller adds, “Tearing up NAFTA is a serious matter. It was clear that we would be hurting ourselves by breaking something that was working well for all parties. The older U.S. farmers still talk of the long-term harm caused by the Russian grain embargos of years ago. I’m afraid the collateral damage to American agriculture caused by continued threats or an actual withdrawal from NAFTA will be much greater and remembered far longer.”

USGC creating new markets
Five years ago, to show the efficiency of U.S. dried distillers grain, USGC began conducting feed demonstration trials with local cattle producers in the southeast region of Mexico. This includes Yucatan, Chiapas, Veracruz and Campeche. These ranchers traditionally turn their cattle out to pasture to eat grass and then round them up to sell a couple years later. It was said they would never try anything that cost money.

In the first year, less than 2,000 tons of DDG were fed in the trials monitored by the U.S. Grains Council. The results proved the economic and nutritional advantages of U.S.-produced DDG. Last year, 61,000 tons of U.S. DDG were sold to the cattle producers who attended USGC meetings to learn about these trials. Mueller says the “ripple effect” of these efforts continues to expand and that this demonstrates the U.S. Grain Council’s success in building new markets for U.S. corn products.

Corn Quality Report provides useful information
The annual corn harvest quality report provides timely information about the quality of the current U.S. corn crop at harvest as it enters international merchandising channels. This information will be supplemented by a second report, the 2017-18 Corn Export Cargo Quality Report. As a package, the reports provide reliable, timely and transparent information on the quality of U.S. corn as it moves through the export channel.

It is important to recognize the final quality of corn in export channels is affected by many factors in the U.S. grain marketing system. As corn passes through the U.S. marketing system, it is mingled with corn from other locations; aggregated into trucks, barges and rail cars; and stored, loaded and unloaded several times.

The crop quality data and farmer presentations are accompanied by information on U.S. corn grading and handling. This information helps provide a better understanding of how U.S. corn is moved and handled through export channels for a varied audience of international grain buyers, end-users and even government officials.


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