Death comes to us all. Life's but a walking shadow | Maybe you should at the very least consider the facts before decide you're safe. As it is today, corn routinely moves from Ill to Verecruz, Mexico, 2000 miles and it costs about $30 per tonne for transport, $16 for the barge down the Miss. & $14 for the ship. Likewise it cost about $85 per tonne to move corn from IA to Guadalajara, Mexico by railroad. It's another 1000 miles from the northern ports of Brazil but ship traffic can go up the Amazon and connect with Route 163 which goes right through Mato Grosso. Plus, once it's on ship it can either go to Verecruz, Tampico or through the Panama Canal to Guadalajara probably for about the same $30 per tonne because ocean freight is cheaper than barge and far cheaper than railroad.
Another argument put forward is that any corn diverted from Brazil to Mexico will only need to be replaced elsewhere with American corn so there will be no net loss of exports. Furthermore, the argument goes, Brazil and Argentina can't easily expand production to meet the additional 10 million metric tons of demand. First, Brazil plants about a million hectares of cotton, most of it in Mato Grosso and Bahia. Brazilian producers routinely compare the price of cotton and corn and adjust their acres accordingly. A million extra hectares of corn at 5 MT per hectare gets you 5 MT without any expansion in planted area whatsoever. Are Brazilian's going to completely abandon cotton? No, but it shows you that they do have the ready option of increased corn production.
Second, Illinois Farmdoc published a nice little article, http://farmdocdaily.illinois.edu/2016/12/assessing-brazilian-corn-y... where they looked at Brazil's corn yields. One of the interesting thing they pointed out is that while Brazil's yield is only about 85 bushel per acre at present, their rate of yield increase is logarithmic not linear as ours is. This means that while our rate of increase in yield has been a fairly steady 1.7 to 2 bushel per acre per year, Brazil's rate of increase is about 3.3 bushel per year and is steadily rising. In order to produce the extra 10 MMT they need to satisfy the Mexican market without any increase in planted acres they need a yield increase of about 23.5 bu/a. which they can achieve in just eight years.
And that still leaves them the option of planting less first crop soybeans and more first crop corn, at present they plant some 86 million acres of soybeans which can easily be switched to first crop corn depending on price & demand. Every million acres of soybeans switched from soybeans to corn is 2 MMT of corn for Mexico. They can get to the 10 MMT of Mexico demand simply by switching 5 million acres or just 6%.
I would suggest that competition for agricultural markets is tough enough, don't give anyone the convenient excuse to go elsewhere.
But then again, what do I know. |
Mexico
