Commodity Classic

Can Mexico Afford to Retaliate Against the U.S.?

Wed, 05 Mar 2025 19:46:40 GMT

President Donald Trump followed through on his threats of imposing a 25% tariff on most imports from Canada and Mexico, along with an additional 10% on goods from China. While China and Canada released their list of retaliatory tariffs the same day, Mexico’s president, Claudia Sheinbaum, says they won’t release their list until the weekend.

Sheinbaum said the country will also respond with a 25% tariff on U.S. goods but will announce the products it will target on Sunday.

But can Mexico afford to retaliate? That was one of the questions asked by USDA chief economist Seth Meyer during Commodity Classic this week. The reason is Mexico’s economy is struggling, due to a number of factors, which includes a large informal sector, high budget deficit and unstable infrastructure.

According to the Federal Reserve Bank of Dallas, Mexico’s GDP grew only 0.9% year over year in fourth quarter 2024, after expanding 2.% in 2023 and 4.6% in 2022. Economic growth slowed, mainly due to lower investment, slowing consumption and a contracting energy sector.

(Federal Reserve Bank of Dallas)

The Dallas Fed says lower investment and consumption was the main driver behind the slow growth.

“Investment contributed three percentage points less to GDP growth in 2024 compared with 2023,” the Federal Reserve Bank of Dallas said in a recent report. “The major drop was in nonresidential construction investment, while purchases of imported machinery and equipment also slowed noticeably as the Mexican peso continued to weaken against the dollar. In addition, consumption was impacted by sluggish growth in remittances, high interest rates and flat employment. However, net exports boosted growth in 2024 after dragging it down the previous two years.”

Extremely Reliant Upon Exports
The other issue? Mexico is extremely reliant upon demand from the U.S., exporting $41.9 billion worth of agricultural products to the U.S.

In 2023, Mexico accounted for 16.3% of U.S. agricultural exports and 23.3% of U.S. agricultural imports.

By the numbers:

Mexico is the largest source of horticultural imports to the U.S., supplying 63% of vegetables and 47% of fruit and nuts in 2023.
The top agricultural exports from Mexico to the U.S. in 2024 included beer, tomatoes, tequila, avocados, strawberries, raspberries and peppers.

Mexico is the Biggest Customer of U.S. Ag Exports

The other important piece is Mexico is now the U.S.'s top ag export destination.

According to Krista Swanson, chief economist for National Corn Growers Association (NCGA), Mexico is a huge destination for U.S. corn. More than 40% of U.S. corn exported last year went to Mexico. Not only does that mean the U.S. relies on Mexico, but Mexico is also reliant upon the U.S. do to the strong demand.

“That’s the other key piece here when we think about a Mexico situation, you know, will they retaliate on corn because it’s so important to the consumers in their country,” Swanson told Farm Journal during Commodity Classic this week. “And it’s such a big part of their diets and consumption. It’s a commodity that they consume way more of than what they produce. So they’re going to have to get it from somewhere.”

Bigger Picture
According to USDA’s Economic Research Service , between 1993 (the year before NAFTA’s implementation) and 2023, U.S. agricultural exports to Mexico expanded at a compound annual growth rate (CAGR) of 7%, while agricultural imports from Mexico grew at a rate of 9.7%.

“With the economic recovery in the United States and Mexico that followed the pandemic, U.S. agricultural exports to Mexico increased at a CAGR of 15.7% between 2020 and 2023, and U.S. agricultural imports from Mexico grew at a CAGR of 11.3%,” the USDA report said. “In 2023, however, U.S. agricultural exports to Mexico decreased by 0.3% compared with the previous year, as the prices of major agricultural exports (such as corn and soybeans) declined.”

Farmers Focus on Feeding a Hungry Planet

Fri, 13 Nov 2020 05:58:07 GMT

Everyone should have the right to eat. Yet millions still go hungry every day, according to Oxfam America. This problem could worsen as the global population climbs, says Director of Policy and Research Gawain Kripke. Kripke was a guest speaker at the Bayer CropScience Ag Issues Forum in Nashville, Tenn.

“To feed 9 billion people by 2050, we need to push all of the buttons,” he says. “And there’s room for everyone to participate. U.S. agriculture is the most productive agriculture in the world, and we need to grow a lot more food for the world. It’s absolutely true that U.S. farmers are going to play a big role in that.”

With the recent emergence of agricultural initiatives such as Farmers Feeding the World , the Howard G. Buffet Foundation and the Bill & Melinda Gates Foundation , and through his own interactions with farmers, Kripke says he is hopeful farmers will lead the way in the search for new solutions.

Technology is a Young Farmer's Best Friend

Fri, 13 Nov 2020 05:58:52 GMT

Jeremy Jack says the hardest part about being a young producer is when people underestimate what he can do with technology today. Jack farms 8,500 acres of cotton, corn, rice, soybeans and wheat in Belzoni, Miss., with his parents and sister. Through the use of technology, he believes he achieves more with less. For example, he has moved his farm to 100% variable rate twin row corn and bean seeding rates to make every acre reach the top of its potential.

“Even though I am a young producer, I feel that I am well equipped with technology and have a fresh though process compared to more seasoned producers,” says Jack, who is the 2013 recipient of the Bayer CropScience Young Farmer Sustainability Award .

To help every acre reach the top of its potential, Jack has implemented extensive irrigation systems. Pads and slotted pipes, low-grade weirs, winter flooding, on-farm water storage, tailwater recovery, irrigation system surface and subsurface, shallow water management for wildlife and double lined polypipe.

“Jeremy has made it a top priority to modernize the farm in not only equipment, but also how he thinks about farming in general,” notes Jim Reed, president of Guaranty Bank & Trust Company in Belzoni, Miss., and who has known the young farmer since grade school. “It is very interesting to hear Jeremy talk about what he has learned concerning seed planting populations, crop rotations, fertilizer programs and irrigation. He has a plan laid out each year for each crop and all data analyzed and put to use.”

Sustainability is a key component to Jack’s mindset. “To me, sustainability is to safely and efficiently produce high-quality raw food and fiber commodities, to maximize profitability and to support our rural community,” Jack says. “Our method of sustainability is sustainability in action. We believe with outreach and education we can make sustainability interesting and do a better job of educating urban areas.”

Jack will soon be implementing a demonstration farm that will have a total water reclaiming system using flow meters, automatic relift pumps, reservoirs and water quality monitors. He hopes to make this part of his farm tour, and writes about new initiatives on the farm on his blog and the farm web site.

“We have ample opportunities as farmers to share what we are doing,” he says. The farm has its own web site and blog, and hosts farm tours for urban neighbors.

“As an industry we have come a long way, but we have to do a better job of showing people outside the industry what we are doing,” Jack adds.

For More Information
Read more coverage from the 2013 Commodity Classic and associated events.

Wal-Mart Wants Farmers to Lead Sustainability Solutions

Fri, 13 Nov 2020 05:58:52 GMT

When Rob Kaplan walks in a room, people sometimes roll their eyes or shut down. Not because Kaplan is a bad guy, but because he carries the title of Senior Manager of Sustainability for Wal-Mart.

“It’s the term sustainability,” Kaplan says. “It’s such a tough term for people to understand.”

In Kaplan’s mind, though, sustainability is simple. It’s a key driver behind Wal-Mart’s business model: save people money so they live better.

Kaplan believes sustainability is about finding ways to improve efficiencies on the farm and through the supply chain so that consumers always get a low-priced, quality product in Wal-Mart stores. And Wal-Mart wants farmers to step up and lead the work toward solutions for improved sustainability – from resource management to quality assurance.

“Wal-Mart doesn’t believe customers should have to choose between sustainability and affordability,” Kaplan said today at the Bayer CropScience Ag Issues Forum in Orlando, Fla. “We are really excited to figure out supply chain solutions so we can provide what society needs. In some ways, this is a call to action.”

Wal-Mart recently became the first retail member to join Field To Market, a diverse initiative that brings together farmers, agribusinesses, food companies, and conservation organizations to create sustainable outcomes for agriculture. The world’s largest retailer joined the initiative to begin working closer with agriculture and help move the industry from sustainability “metrics” to scalable solutions, Kaplan says.

Retailers like Wal-Mart others in the food industry want to be able to tell a positive story to consumers, says Rick Tolman, CEO, National Corn Growers Association, who also spoke at the Ag Issues Forum. NCGA is also a member of the Field to Market initiative and Tolman says this it is exciting to finally be having discussions between the farm and the retailer.

“We have talked about sustainability for 15 years with the food industry on one end and farmers on the other,” Tolman says. “So it’s new that I can talk to Wal-Mart and hear what consumers tell them, and I can tell them what farmers say. We are not talking at each other anymore. We are talking with each other.”

It’s important to note that Wal-Mart is not a marketing-driven organization, says Kaplan, it is a product-driven organization. “The reason people shop at Wal-Mart is everyday low prices,” he says. “When people walk through our door, we want them to know they have the most sustainable products at their disposal.

“This is a leadership opportunity for farmers, for an industry or an individual agricultural company,” Kaplan adds. “We are the largest retailer in America. We have a corporate mission around sustainability. It’s up to our suppliers to show leadership on sustainability.”

For more on Wal-Mart’s “call to action” on sustainability in agriculture, watch this video with Rob Kaplan at the Ag Issues Forum:

For More Information
Read more coverage from the 2013 Commodity Classic and associated events.

Meet Farm Labor Needs with ‘Freelance Farmers’

Fri, 23 Sep 2022 21:30:59 GMT

If finding good employees is a challenge for your farming enterprise, consider what one agribusiness recruiter says is a wave of the future: freelance farmers.

They’re independent contractors who travel around the country to help large-scale operators plant and harvest crops, according to Greg Duerksen, president of Kincannon & Reed, an agribusiness executive search firm based in Virginia.

Such individuals are highly trained to run equipment; they’re reliable, self-motivated and have sound judgment skills, notes Duerksen. He says he already knows of several Midwest farmers who have been able to capitalize on this type of short-term employee opportunity.

“It requires you to change the way you think about hiring farm employees,” adds Duerksen, who spoke during the Bayer CropScience Ag Issues Forum at the 2013 Commodity Classic.

In the following video, Duerksen provides some additional ideas on how farmers might go about finding the next employee for their operation.

For More Information
Read more coverage from the 2013 Commodity Classic and associated events.