By Ken Roseboro and Timothy A. Wise
United States commodity organizations have cheered on the US government as it tries to get Mexico’s restrictions on genetically modified (GM) corn declared in violation of our trade agreement with Mexico and Canada, arguing that it cuts farmers’ export markets and sales revenues. But what if Mexico’s modest restrictions could instead turn out to benefit US farmers who shift to premium non-GM corn markets as international corn prices fall?
It sounds counter-intuitive, but it might just be true. The math is pretty simple. Despite all the bluster about Mexico’s February 2023 restrictions on GM corn, they affect a very small share of US exports. After negotiations with the US government over a more restrictive 2020 decree, Mexico dramatically limited its revised order, exempting GM feed corn from any mandated reductions. The restrictions apply only to the use of GM corn in tortillas and other products minimally processed for direct human consumption.
The restrictions were intended mainly as precautionary measures for a population that consumes more such corn products than anyone else on the planet. The corn for tortillas, and the minimally processed flour for tamales, enchiladas, and other Mexican staples, are overwhelmingly non-GM white and native varieties from Mexican producers.
Before the decree, Mexico was importing only about 600,000 tons of white corn from the US each year, a tiny share of the 16.5 million tons of US corn it imported last year. That means that barely 3% of US corn exports are potentially affected by Mexico’s restrictions. But the share is actually closer to 1%, because only an estimated half of US white corn are GM varieties, and barely half of US white corn exports are destined for Mexico’s tortilla industry, according to US Department of Agriculture (USDA) reports.
So just 1% of US corn exports are potentially affected by Mexico’s policies. From the beginning, the Mexican government has asserted that its revised and less restrictive decree has little impact on American growers. They are right, and the US in the formal presentation of its complaint did not even attempt to quantify how many US farmers are affected.
And here’s the thing: Those who are affected can always switch to non-GM white food-grade corn and export to Mexico’s tortilla industry.
US farmers who do that could earn premium prices, ranging from $0.25 to $0.50 per bushel for non-GM white corn, according to industry sources. Such premiums could be particularly attractive right now to farmers who saw corn prices fall more than 30% last year.
US trade officials have preferred not to discuss non-GM opportunities for U.S. farmers, but some farmers and grain suppliers would welcome them.