Soybean Shipments to Mexico Expected to Soar

The U.S. Soybean Export Council (USSEC) works to develop new markets for U.S. soybean farmers and other key stakeholders, along with optimizing the utilization and value of U.S. Soy in international markets.

According to a recent U.S. Department of Agriculture (USDA) inspections report, one bright spot for the U.S. soy industry is higher soybean shipments to Mexico. The market has been a source of growth for several years and according to a United States Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report, about 96% of soybeans supplied for crushing in Mexico originate in the U.S. Due to lower freight costs, the U.S. is expected to maintain market dominance.

Currently, Agydsa, a major Mexican crusher, is building a new plant in Jalisco with a crushing capacity of 4000 metric tons (MT) per day, which is expected to become operational in August 2020. A 4000-MT per day crushing plant will require Mexico to increase its imports of soybeans by 1.4 million metric tons (MMT) annually.

The plant will reduce the need for some soybean meal imports but the crushing will support Mexico’s animal feed operations. As was learned during the U.S./China trade dispute, the diversification of the supply chain is very important.  During time periods that involve trade restrictions, such as trade wars and disease issues that prevent meat exports, having multiple buyers is advisable.

Alan Barrett

Director of Research and Consulting

Higby Barrett LLC

Alan Barrett is the Director of Research and Consulting for HIgby Barrett LLC. He is an accomplished commodity economist with more than 25 years of experience in futures and cash markets with a focus on cotton, commodity projects, non-traditional agricultural products, transportation and supply chain studies. Alan spent six years as a commodity futures broker. His expertise encompasses feasibility studies of oilseed crushing plants (soybean canola, and cottonseed), grain elevators, export elevators, shuttle elevators, grain container operations, flourmills and other processing facilities. Alan also has conducted transportation supply chain studies for grains, oilseeds, fertilizer, coal, natural gas, crude oil, and petroleum products. Alan has considerable experience in non-traditional agricultural products such as coal, coke, natural gas, chemicals, hydraulic fracturing fluid, hydraulic fracturing proppants, glycerin, fertilizer, micronutrients, salt, limestone, cement, iron ore, pig iron, and steel, especially feed ingredients. Mr. Barrett has a BS and MS in Agricultural Economics from the University of Tennessee.