SD farmers observe importance of Mexican export market on See for Yourself tour
VERA CRUZ, Mexico — With the United States in the midst of the re-negotiation of the North American Free Trade Agreement, the importance of the Mexican market to agriculture has made headlines. A delegation of 10 South Dakota farmers returned from a Feb. 18-24 trade mission to Mexico to talk with their neighbor and customer to solidify this relationship.
The See for Yourself tour was hosted by the South Dakota Soybean Research and Promotion Council.
While China is the top export customer for U.S. soybeans, Mexico is the No. 2 market. The country is heavily reliant on the U.S. because their farmers cannot grow an adequate soybean supply.
Todd Hanten farms near Goodwin, S.D., and serves on the South Dakota Soybean Research and Promotion Council.
"Very few soybeans are grown in Mexico, so it's a market that depends on us as well," he said. "We need them and they need us. It's interesting to see that firsthand and also to build a relationship with these customers and markets so that hopefully we can keep their business in the future."
The group visited two Mexican ports, including the Port of Progreso on the Yucatan Peninsula. It is a small but efficient port that can receive products from New Orleans in two days.They don't have rail access so product is received by truck.
"Last year we imported 2,000,050 tons of grains from the United States," said Gulbardo Carrillo, shipping manager at the Port of Progreso. However, by the end of the year, an expansion will increase the depth of the draft to allow Panamax vessels.
The group also saw the oldest and largest port in Vera Cruz. It is currently working on Phase I of an expansion that will be completed in 2019. The expansion will allow grain companies to handle Panamax ships and buy 25 percent more than the 500,000 metric ton annual U.S. soybean volume.
One of the four grain companies at the port is Gramosa. Commercial Head Edmundo Miranda said they see the expansion as a huge opportunity for U.S. farmers to grow sales.
"Our intention is that the U.S. will be by far the biggest partner for Mexico for our terminal. We are focused on having 90 percent of our raw materials out of the U.S.," Miranda said. Soybean processors also buy from the U.S., as Mexican farmers can't grow enough beans to supply the plants.
The growing livestock and poultry industries in Mexico are also increasing demand for U.S. oilseeds and feed grains.
"They are expanding livestock operations, so soybean meal amounts that they purchase should just keep growing," said Hanten.
Crio, a poultry company in Merida, Mexico, produces 14 million broilers and 1.5 billion eggs a year. They have one of the largest poultry feed mills in the country and source U.S. meal.
"We buy per year, 85,000 metric tons of soybeans from the U.S. Totally from the U.S., everything," said Juan Martinez Duante manager of the Crio Feed Mill. The 450,000 metric ton plant prefers to buy from the U.S. versus South America. "We buy from the U.S. because they have good quality and good price."
Granjas Carroll de Mexico or GCM is located in Vera Cruz. The company produces 1.4 million hogs and has one of largest pig feed mills in Mexico.
"All our soybean meal comes from the United States, and we use 7,000 metric tons per month. The quality is very standard and is high protein and also it imparts confidence of the quality of the product," said Magaly Tapia Santos Cruz, plant manager of GCM. They, like many livestock companies, are nearly doubling production in the next five years.
For the South Dakota delegates, the See for Yourself program was a chance for farmers to solidify their relationship with their Mexican customers. Tim Ostrem farms near Centerville and also serves on the Soybean Council.
"It's an opportunity to meet the buyers of our soybeans, the soybean meal and the soybeans that they are using in the production for livestock, or even vegetable uses in vegetable oils," he said.
Ostrem said they also want growers to observe how checkoff dollars are being used to expand markets.
"See for Yourself offers the opportunities for farmers across the state of South Dakota to see what some of their checkoff dollars are doing for the state and all the farmers themselves in hoping to increase revenue and promote our product to the world," he said.