GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO Stephen Fuller, Nicolas Gutierrez, and Melanie Gillis' T AMRC International Market Research Report No. IM-5-94 October 1994 'Professor, Graduate Research Assistant, and Research Assistant, respectively, Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843-2124.
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GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Stephen Fuller Nicolas Gutierrez and Melanie Gillis
T AMRC International Market Research Report No IM-5-94
October 1994
Professor Graduate Research Assistant and Research Assistant respectively Department of Agricultural Economics Texas AampM University College Station Texas 77843-2124
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Texas Agricultural Market Research Center (T AMRC) International Market Research Report No IM-1-94 by Stephen Fuller Nicolas Gutierrez and Mdanie Gillis Ocwber 1994 Special appreciation is expressed to Keith A Klindworth Assistant Chief Domestic Transportation Branch Transportation and Marketing Division Agricultural Marketing Service US Department of Agriculture for counsd offered during the course of this study Resources to carry our this study were provided by the USDA Agricultural Marketing Service the Texas Agricultural Experiment Station and a grant from the USDA Cooperative State Research Service
Absmct This report examines grain and soybean production and consumption in Mexico and estimates regional surplusesdeficits for corn wheat sorghum and soybeans Data devdoped from this effort will identify surplusdeficit regions so that subsequent studies might isolate and analyze transportation corridors important for US exports of these commodities to Mexico
The Texas Agrirulwral Market Research Center (TAMRC) has been providing timely unique and profossional research on a wide range of issues relating to agricultural markets and commodities of importance to Texas and the nation for more than two decades TAMRC is a market research service of the Texas Agricultural Experiment Station and the Texas Agricultural Extension Service The main TAMRC objective is to conduct research leading to expanded and more efficient markets for Texas and US agricultural products Major TAMRC research divisions include International Market Research Commodity Market Research and Contemporary Market Issues Research
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GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
EXECUTIVE SUMMARY
Mexico has become an increasingly important importer of US grains and soybeans A recent USDA study suggests that Mexico will increase corn sorghum soybean and wheat imports by 300 76 104 and 12 respectively above 1993 import levels by the year 2005 Unfortunately the transportation and grain handling infrastructure in Mexico appears inadequate to accommodate these projected increases efficiently The purpose of this study is to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent research might isolate and analyze the important transportation corridors for US exports of these commodities to Mexico
In 198990 the eight regions in Mexico analyzed in this study had an estimated deficit of 113 million metric tons (mt) Nearly 40 of the deficit was in the Central region with principal deficits located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (15) the Pacific Central (11) the North Central (10) the Pacific North (10) and the Gulf (8) Both overland and maritime transportation corridors will be important for US agriculture to efficiently meet grain and soybean demands in Mexico
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GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
TABLE OF CONTENTS
Page Abstract ii
Executive Summary lli
Factors Affecting Grain Production in Mexico 1 Corn Production 2 Wheat Production 3 Sorghum Production 4 Soybean Production 5
Factors Affecting Grain Consumption in Mexico 5
Estimation of Grain Consumption by LivestockPoultryDairy Sectors 6
Regional Estimates of Production Consumption and Apparent Surpluses and Deficits 7
Corn 7 Wheat 8 Sorghum 8 Soybeans 9
Mexican Grain and Soybean Production Policies 9 Corn Producer Subsidies 10 Sorghum Producer Subsidies 11 Wheat Producer Subsidies 11 Soybean Producer Subsidies 12 PROCAMPO A New Production Policy 12
Summary and Conclusions 13
Appendix Procedures for Estimating Mexican Grain Consumption 15
References 18
Figures 21
Tables 26
Appendix Tables 37
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
liST OF FIGURES
Figure Page
1 Mexican States 22
2 Study Regions in Mexico 23
3 Percent of Mexican Corn Wheat Sorghum and Soybean Production by Month 1987-1990 24
4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991 25
liST OF TABLES
Table Page
1 Mexico Corn Production by Region and State 1987-1991 27
2 Mexico Wheat Production by Region and State 1987-1991 28
3 Mexico Sorghum Production by Region and State 1987-1991 29
4 Mexico Soybean Production by Region and State 1987-1991 30
5 Mexico Estimated Grain Consumption by Livestock Poultry and Dairy 1989-1990 31
6 Mexico Estimated Corn ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 32
7 Mexico Estimated Wheat ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 33
8 Mexico Estimated Sorghum ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 34
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LIST OF TABLES (continued)
Table Page
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
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GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
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Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
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the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
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Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
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Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
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of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
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Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
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deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
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of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
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2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
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government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Texas Agricultural Market Research Center (T AMRC) International Market Research Report No IM-1-94 by Stephen Fuller Nicolas Gutierrez and Mdanie Gillis Ocwber 1994 Special appreciation is expressed to Keith A Klindworth Assistant Chief Domestic Transportation Branch Transportation and Marketing Division Agricultural Marketing Service US Department of Agriculture for counsd offered during the course of this study Resources to carry our this study were provided by the USDA Agricultural Marketing Service the Texas Agricultural Experiment Station and a grant from the USDA Cooperative State Research Service
Absmct This report examines grain and soybean production and consumption in Mexico and estimates regional surplusesdeficits for corn wheat sorghum and soybeans Data devdoped from this effort will identify surplusdeficit regions so that subsequent studies might isolate and analyze transportation corridors important for US exports of these commodities to Mexico
The Texas Agrirulwral Market Research Center (TAMRC) has been providing timely unique and profossional research on a wide range of issues relating to agricultural markets and commodities of importance to Texas and the nation for more than two decades TAMRC is a market research service of the Texas Agricultural Experiment Station and the Texas Agricultural Extension Service The main TAMRC objective is to conduct research leading to expanded and more efficient markets for Texas and US agricultural products Major TAMRC research divisions include International Market Research Commodity Market Research and Contemporary Market Issues Research
11
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
EXECUTIVE SUMMARY
Mexico has become an increasingly important importer of US grains and soybeans A recent USDA study suggests that Mexico will increase corn sorghum soybean and wheat imports by 300 76 104 and 12 respectively above 1993 import levels by the year 2005 Unfortunately the transportation and grain handling infrastructure in Mexico appears inadequate to accommodate these projected increases efficiently The purpose of this study is to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent research might isolate and analyze the important transportation corridors for US exports of these commodities to Mexico
In 198990 the eight regions in Mexico analyzed in this study had an estimated deficit of 113 million metric tons (mt) Nearly 40 of the deficit was in the Central region with principal deficits located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (15) the Pacific Central (11) the North Central (10) the Pacific North (10) and the Gulf (8) Both overland and maritime transportation corridors will be important for US agriculture to efficiently meet grain and soybean demands in Mexico
111
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
TABLE OF CONTENTS
Page Abstract ii
Executive Summary lli
Factors Affecting Grain Production in Mexico 1 Corn Production 2 Wheat Production 3 Sorghum Production 4 Soybean Production 5
Factors Affecting Grain Consumption in Mexico 5
Estimation of Grain Consumption by LivestockPoultryDairy Sectors 6
Regional Estimates of Production Consumption and Apparent Surpluses and Deficits 7
Corn 7 Wheat 8 Sorghum 8 Soybeans 9
Mexican Grain and Soybean Production Policies 9 Corn Producer Subsidies 10 Sorghum Producer Subsidies 11 Wheat Producer Subsidies 11 Soybean Producer Subsidies 12 PROCAMPO A New Production Policy 12
Summary and Conclusions 13
Appendix Procedures for Estimating Mexican Grain Consumption 15
References 18
Figures 21
Tables 26
Appendix Tables 37
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
liST OF FIGURES
Figure Page
1 Mexican States 22
2 Study Regions in Mexico 23
3 Percent of Mexican Corn Wheat Sorghum and Soybean Production by Month 1987-1990 24
4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991 25
liST OF TABLES
Table Page
1 Mexico Corn Production by Region and State 1987-1991 27
2 Mexico Wheat Production by Region and State 1987-1991 28
3 Mexico Sorghum Production by Region and State 1987-1991 29
4 Mexico Soybean Production by Region and State 1987-1991 30
5 Mexico Estimated Grain Consumption by Livestock Poultry and Dairy 1989-1990 31
6 Mexico Estimated Corn ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 32
7 Mexico Estimated Wheat ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 33
8 Mexico Estimated Sorghum ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 34
v
LIST OF TABLES (continued)
Table Page
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
Vi
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
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Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Mexico has become an increasingly important importer of US grains and soybeans A recent USDA study suggests that Mexico will increase corn sorghum soybean and wheat imports by 300 76 104 and 12 respectively above 1993 import levels by the year 2005 Unfortunately the transportation and grain handling infrastructure in Mexico appears inadequate to accommodate these projected increases efficiently The purpose of this study is to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent research might isolate and analyze the important transportation corridors for US exports of these commodities to Mexico
In 198990 the eight regions in Mexico analyzed in this study had an estimated deficit of 113 million metric tons (mt) Nearly 40 of the deficit was in the Central region with principal deficits located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (15) the Pacific Central (11) the North Central (10) the Pacific North (10) and the Gulf (8) Both overland and maritime transportation corridors will be important for US agriculture to efficiently meet grain and soybean demands in Mexico
111
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
TABLE OF CONTENTS
Page Abstract ii
Executive Summary lli
Factors Affecting Grain Production in Mexico 1 Corn Production 2 Wheat Production 3 Sorghum Production 4 Soybean Production 5
Factors Affecting Grain Consumption in Mexico 5
Estimation of Grain Consumption by LivestockPoultryDairy Sectors 6
Regional Estimates of Production Consumption and Apparent Surpluses and Deficits 7
Corn 7 Wheat 8 Sorghum 8 Soybeans 9
Mexican Grain and Soybean Production Policies 9 Corn Producer Subsidies 10 Sorghum Producer Subsidies 11 Wheat Producer Subsidies 11 Soybean Producer Subsidies 12 PROCAMPO A New Production Policy 12
Summary and Conclusions 13
Appendix Procedures for Estimating Mexican Grain Consumption 15
References 18
Figures 21
Tables 26
Appendix Tables 37
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
liST OF FIGURES
Figure Page
1 Mexican States 22
2 Study Regions in Mexico 23
3 Percent of Mexican Corn Wheat Sorghum and Soybean Production by Month 1987-1990 24
4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991 25
liST OF TABLES
Table Page
1 Mexico Corn Production by Region and State 1987-1991 27
2 Mexico Wheat Production by Region and State 1987-1991 28
3 Mexico Sorghum Production by Region and State 1987-1991 29
4 Mexico Soybean Production by Region and State 1987-1991 30
5 Mexico Estimated Grain Consumption by Livestock Poultry and Dairy 1989-1990 31
6 Mexico Estimated Corn ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 32
7 Mexico Estimated Wheat ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 33
8 Mexico Estimated Sorghum ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 34
v
LIST OF TABLES (continued)
Table Page
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
Vi
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Factors Affecting Grain Production in Mexico 1 Corn Production 2 Wheat Production 3 Sorghum Production 4 Soybean Production 5
Factors Affecting Grain Consumption in Mexico 5
Estimation of Grain Consumption by LivestockPoultryDairy Sectors 6
Regional Estimates of Production Consumption and Apparent Surpluses and Deficits 7
Corn 7 Wheat 8 Sorghum 8 Soybeans 9
Mexican Grain and Soybean Production Policies 9 Corn Producer Subsidies 10 Sorghum Producer Subsidies 11 Wheat Producer Subsidies 11 Soybean Producer Subsidies 12 PROCAMPO A New Production Policy 12
Summary and Conclusions 13
Appendix Procedures for Estimating Mexican Grain Consumption 15
References 18
Figures 21
Tables 26
Appendix Tables 37
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
liST OF FIGURES
Figure Page
1 Mexican States 22
2 Study Regions in Mexico 23
3 Percent of Mexican Corn Wheat Sorghum and Soybean Production by Month 1987-1990 24
4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991 25
liST OF TABLES
Table Page
1 Mexico Corn Production by Region and State 1987-1991 27
2 Mexico Wheat Production by Region and State 1987-1991 28
3 Mexico Sorghum Production by Region and State 1987-1991 29
4 Mexico Soybean Production by Region and State 1987-1991 30
5 Mexico Estimated Grain Consumption by Livestock Poultry and Dairy 1989-1990 31
6 Mexico Estimated Corn ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 32
7 Mexico Estimated Wheat ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 33
8 Mexico Estimated Sorghum ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 34
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LIST OF TABLES (continued)
Table Page
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
Vi
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
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Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
3 Percent of Mexican Corn Wheat Sorghum and Soybean Production by Month 1987-1990 24
4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991 25
liST OF TABLES
Table Page
1 Mexico Corn Production by Region and State 1987-1991 27
2 Mexico Wheat Production by Region and State 1987-1991 28
3 Mexico Sorghum Production by Region and State 1987-1991 29
4 Mexico Soybean Production by Region and State 1987-1991 30
5 Mexico Estimated Grain Consumption by Livestock Poultry and Dairy 1989-1990 31
6 Mexico Estimated Corn ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 32
7 Mexico Estimated Wheat ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 33
8 Mexico Estimated Sorghum ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 34
v
LIST OF TABLES (continued)
Table Page
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
Vi
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
9 Estimated Soybean ProductionConsumption and Apparent SurplusDeficit by Region and State 1989-1990 35
10 Mexico Guaranteed and Negotiated Prices for Grains and Soybean 1989-1991 36
AI Mexico Broiler Production by Region and State 1987-1991 38
A2 Parameters and Assumptions to Estimate Grain Consumption by Mexican Poultry Industry 39
A3 Mexico Egg Production by Region and State 1987-1991 40
A4 Mexico Pork Production by Region and State 1987-1991 41
AS Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog Industry 42
A6 Mexico Milk Cow Inventories by Production System Region and State 1990 43
A7 Parameters and Assumptions to Estimate Grain Consumption by Mexican Dairy Industry 44
A8 Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and State 1990 45
Vi
GRAIN SURPLUS AND DEFICIT REGIONS IN MEXICO
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Mexico has become an increasingly important US agricultural trading partner since joining the General Agreement on Tariffs and Trade (GATT) in 1986 Recent approval of the North American Free Trade Agreement (NAFTA) is further reducing USlMexico trade barriers and increasing agricultural trade between the two countries US grains have typically been the largest export items to Mexico Recent studies suggest that NAFTA will further increase US grain exports to Mexico (Krissoff et al Valdes) Unfortunately constraints in the Mexican marketing and transportation infrastructure could hamper additional U SlMexico trade in grains and other bulk commodities (USDA 1992) In view of this concern this study estimates regional grainsoybean consumption in Mexico to identify likely grain deficit or import regions The results will offer important insight on the transportation corridors needed to efficiently link US grain surplus regions and Mexican grain deficit regions
Factors Afkaing Grain Production in Mexico
Mexico is located in a climatic transition zone with arid conditions in the north and humid subtropical conditions in the south and in selected coastal regions About 28 of Mexicos surface area is tropical Moderate to cool climates in central Mexico comprise about 23 of the countrys surface area (Figure 1) Dry climates in Mexico which include the northern border and north central states comprise about 49 of Mexican land area (Schulthies et al)
Rainfall in Mexico is concentrated in the July to October and December to January periods Annual rainfall in the southeastern portion of the country ranges up to 80 inches In the northwest regions however average rainfall is less than 6 inches Grain production is nearly impossible without irrigation in many of the northern states Average annual rainfall in the central states ranges from 24 to 40 inches (SARH 1989)
About 247 million hectares (ha) or 126 of the Mexican land mass (196 million ha) is arable Over the past decade an average of 213 million ha has been cultivated About 5 million ha are irrigated and approximately 14 of the remaining arable land receives adequate and reliable rainfall (Salinas)
The land tenure system in Mexico has had an important impact on crop production Land tenure was an important force behind the Mexican revolution of 1910-17 and was ultimately responsible for the development of the current small farm (ejido) system Following the revolution land was expropriated from large land holders and subsequently divided into small plots for
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
distribution to landless farmers The term ejido refers to land that the Mexican government has granted to groups of people Most ejidos include individual family land plots land held in common by all families in the ejido and community land In 1988 there was an estimated 307 million ejidatarios (ejido farmers) operating land plots which averaged 47 ha in size Because of their small size about 70 of the ejidos operate at a subsistence level and most ejidatarios are forced to seek offshyfarm employment (Grennes et al) In 1988 about half of Mexicos agricultural land was part of the ejido system Historically the ejido land could be bequeathed to an heir but not sold rented or mortgaged Recent land reform (December 1991) gives tide of the land to the ejidatarios which occupy the land and allows the ejidatarios to sell or lease the land Privatization of land holdings is intended to provide incentives to increase productivity farm size and output (Schulthies et al Valdes)
Corn Production
Corn is a staple in the Mexican diet and therefore has important sociological and political implications in MEXICO Corn is produced on approximately 7 million ha or about 53 of the harvested land area in Mexico Over 60 or about 22 million farmers in Mexico produce at least some corn (Knochenhauer) Torres estimates that 83 of Mexican corn producers annually harvest 2 ha or less of corn 14 harvest between 5 to 15 ha and only 3 harvest in excess of 15 ha According to Matus the average corn farmer harvests about 33 ha of corn per year The small subsistence farms tend to be located in southeast Mexico while larger farms are in central and northwest Mexico About two-thirds of the corn producing area is farmed under the ejido land tenure system Almost 90 of the producers in this system are subsistence farms (Valdes)
Historically about 88 of the planted corn area in Mexico has been rain-fed or nonshyirrigated while the remaining 12 has been irrigated Yields on rain-fed production average about 16 mtha (26 buacre) Irrigated production averages 37 mtha (59 buacre) The historical average national corn yield in Mexico is about 16 mtha (SARH 1991a) About 61 of the corn produced on irrigated farms is from large commercial operations Subsistence farmers grow over 65 of the corn produced on rain-fed land
In the 1989 and 1990 crop years 145 of the harvested corn area was irrigated with an average yield of 31 mtha (49 bushelsacre) Non-irrigated yields averaged 16 mtha Irrigated production comprised about 25 of total output while non-irrigated production comprised the remainder (SARH 1992) Mexican corn yields are low primarily because of continuous cropping and a land tenure system which is not conducive to the addition of technology (Torres)
During the 1980s corn production in Mexico ranged from 106 to 145 million metric (mt) Average production during this period was 122 million mt During the 1989-1990 period of this study corn production dropped to an estimated 109 million mt about 11 below the average Corn production in Mexico is variable because of marginal rainfall in many producing regions and the relatively small share of production which is irrigated (SARH 1992)
2
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Corn is produced in every state in Mexico but production tends to be concentrated in the Central and Pacific Central regions (50) and the Pacific South (20) region (Table 1 and Figure 2) Historically nearly half of Mexican corn production has been located in Jalisco (15) Mexico (12) Puebla (7) Michoacan (7) and Guanajuato (4) which are the principal producing states in the central regions Chiapas a southern state has historically produced nearly 9 of the Mexican annual corn supply (Figure 1)
Corn produced in the central and south regions is planted in late winterearly spring and harvested during the late fallearly winter Nearly 85 of the Mexican corn supply is gathered in the November through February period (Figure 3)
Approximately one-third of the Mexican corn production is consumed on farm Another 65 of goes for human consumption while the remainder (35) is fed to livestock (primarily poultry and dairy animals) and used for seed Ejido farms of five ha or less consume about 60 of their production and market the remainder On average about two-thirds of Mexican corn production is sold off the farm where it subsequendy enters the commercial market channel Supplies to the commercial market channel are augmented by imports which averaged about 39 million mt during the 1988-91 period or about 38 of Mexican corn production About 85 of the corn in the commercial market channel is processed for direct human consumption (harina and nixtamal) while the remainder is processed into starch oil syrup other derivatives and balanced rations for animals (Garda Garda and Montero)
The production of nixtarnal involves the soaking of corn in lime water and then processed into dough or masa The masa is made into tortillas and chips The production of harina is similar except masa is dried and milled to the desired texture (Schulthies et al)
Wheat Production
Wheat is an important foodgrain in the Mexican diet Wheat comprises about 8 of the total harvested surface area (1 million ha) in Mexico and in contrast to corn is generally produced under irrigated conditions (Knochenhauer) In 1989 and 1990 crop years 87 of the harvested wheat production area was irrigated representing about 94 of total wheat output Yield on the irrigated production averaged 43 mtha (64 bushelsacre) Non-irrigated production averaged 18 mtha (27 buacre) (SARH 1992) Wheat yields in Mexico are among the highest in the world because of agronomic research and extensive use of irrigation In contrast to corn most of the wheat in Mexico is produced under relatively advanced technological conditions (Schulthies et al)
Wheat production in Mexico increased from approximately 22 million mt in the early 1970s to 45 million mt in the latter 1980s This doubling in output is attributed to improved varieties and associated higher yields expanded acreage irrigation and improved technology Production in
3
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
the 1989-90 study period was 44 million mt an output representative of the latter 19805 (SARH 1992)
Wheat production is concentrated in the Pacific North (62) and Central regions (22) of Mexico (Table 2) Sinaloa and Sonora (Pacific North region) produce 17 and 34 of the national wheat supply respectively Guanajuato and Michoacancontribute 17 and 5 respectively Approximately 99 of the Mexican annual wheat supply is generated in the April through July period (Figure 3)
Five classes of wheat are produced in Mexico (Groups I II III IV and V) Groups I and II are bread wheats More specifically Group I wheats are for commercial bread baking operations while Group II wheat is for at-home consumption Group III and IV wheats are soft wheats designed for cookies tortillas bread rolls cakes and pastry products Group V wheat is for pasta and macaroni Group III wheat is used in combination with Groups I and II wheat for purposes of bread production Historically about 42 of the annual wheat production has been Group I and II Group III production has comprised about one third of total wheat output Group IV wheat has made up about 10 of production and Group V about 15 All wheat groups are produced in substantial volume in northwest Mexico except Group II wheat which dominates central Mexico production (SECOFI)
Sorghum Production
Sorghum is the principal feedgrain produced in Mexico Sorghum comprises about 14 of the harvested area (17 million ha) and ranks third behind corn and dry beans in area harvested (Knochenhauer) In 1989 and 1990 33 of the harvested sorghum area was irrigated representing about 48 of total sorghum output Yield on the irrigated production averaged 47 mtha (74 buacre) while rain-fed production averaged 25 mtha (39 bushelsacre) (SARH 1992) Over half of Mexican sorghum production is on private farms greater than 5 ha
Mexican sorghum production during the 1989-90 study period was estimated to be 50 million mt about 14 below average production during previous 5-year period (1985-1989) Mexican sorghum production has increased about 90 during the past two decades as a result of expanded acreage (62) and increased yields (20) (SARH 1992)
Sorghum is produced in all regions of Mexico but is concentrated in Guanajuato (24) Jalisco (13) and Michoacan (10) Tamaulipas in the Gulf region and Sinaloa in northwest Mexico contribute approximately 31 and 6 respectively to the national sorghum supply (Table 3) Nearly 90 of the Mexican annual sorghum supply is generated in the fallwinter season when much of the central Mexican harvest is carried out (Figure 3)
4
Soybean Production
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
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Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
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Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
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Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
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Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
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Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
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Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Soybeans account for over 50 of Mexican oilseed production Virtually all soybeans are processed (Schulthies et al) Soybean meal is an important source of protein for pork and poultry producers Soybean oil accounts for about 40 of the edible oils consumed in Mexico l
bull Soybeans are produced on approximately 4 of the Mexican harvested area (004 million ha) (Knochenhauer) In 1989 and 1990 crop years approximately 83 of the Mexican harvested production area was irrigated Yields on irrigated production averaged 22 mtha (33 bushelsacre) Yields on rain-fed production averaged 13 mtha (19 bushelsacre) About 90 of Mexican soybean output was produced on irrigated land in 1989-1990 (SARH 1992)
Soybean production in Mexico averaged about 07 million mt in the 1985-89 period about one-third below the 1989-1990 production of nearly 10 million mt Soybean production is concentrated in the Pacific North where Sonora and Sinaloa have historically accounted for about 25 and 48 respectively of national soybean output (Table 4) Soybean production in this region tends to be produced on relatively large private farms (USDA 1992) Tamaulipas in the northeast has a historical production share of 12 Virtually all remaining production is concentrated in Chiapas Chihuahua and Veracruz Over 80 of Mexican soybean production is harvested in September (25) and October (58) (Figure 3)
Factors Affecting Grain Consumption in Mexico
Mexico has an estimated population of nearly 90 million which has grown at an average rate of 23 over the past decade Mexico is the eleventh most populated country in the world The population of Mexico is relatively young with an average age of 22 As a result the work force increases about 4 per year (Schulthies et al) Mexico City alone has a population in excess of 10 million making it the most populated city in the world The greater Mexico City urban area is estimated to have a population of nearly 20 million accounting for almost 20 of the national population Other large concentrations of people are in the cities ofGuadalajara Jalisco Monterrey Nuevo Leon and Puebla Puebla
Historically Mexico was a population of rural peoples In 1940 about two-thirds of the Mexican population lived in rural areas By 1980 however only one of every three Mexicans lived in a rural area In 1990 an estimated 275 of all Mexicans lived in rural areas (Salinas) The Mexican rural population is thought to have peaked in the mid-1980s at nearly 25 million and is projected to decline to less than 20 million by the year 2000 (Schulthies et al)
Personallnterview with official from Consejo de la Industria Acdtera Mexicana SA
5
I
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Until the early 1980s income from oil exports provided the basis for rapid economic growth in Mexico Growth in gross domestic product from 1977 to 1981 averaged about 85 Duting this period Mexico borrowed heavily from foreign institutions to finance public projects Unfortunately falling oil prices and rapidly increasing interest rates in 1982 erased many ofMexicos earlier economic gains A burgeoning foreign debt rampant inflation and a dramatic decline in Mexican consumer purchasing power resulted The standard of living in Mexico declined to 1960 levels (Schulthies et al) Income from one day of work (minimum wage) in 1982 purchased 85 kilos of pork compared to only 45 kilos in 1987 Similarly one day of income in 1982 purchased 51 kilos of chicken compared to only 22 kilos in 1987 Per capita GNP declined about 40 from 1981 to 1987 (Figure 4)
Since the economic crisis in the early 1980s Mexico has changed its policy of protectionism by reducing subsidies deregulating industry and initiating a process to privatize many inefficient state-owned enterprises As a result Mexican GNP commenced positive growth in the mid-1980s Between 1987 and 1991 per capita GNP increased about 60 Recent policy reforms have generated optimism regarding future economic growth in Mexico (Figure 4)
Estimation of Grain Consumption by LivestocklPoulttylDairy Sectors
To estimate regional feedgrain consumption by the livestock and poultry sectors in Mexico production estimates (pork broiler egg turkey sheep and goat) for each state were converted into feed requirements and subsequendy into grain demands Grain consumption by the dairy and catde feeding sectors were calculated from estimates of state populations and representative rations Conversion coefficients and rations were obtained from interviews with government and private sector representatives in Mexico and US personnel who consult with the livestockpoultry and dairy sectors in Mexico State estimates of livestockpoultry production were taken from the Instituto Nacional de Estadfstica Geografia e Informatica (INEGI 1992) National projections were obtained from the USDA Production Supply and Demand Database An effort was made to adjust livestock poultry and dairy consumption to a October 1 1989-September 30 1990 production year in order to keep grain and livestock-poultry production periods the same (SARH 1991b) Details on the procedures used to estimate feedgrain consumption are presented in the Appendix
Estimating regional grain consumption in Mexico is particularly difficult because of the variability in both the livestock production estimates and Mexican animal production systems Despite the various problems associated with estimating regional feedgrain demands the national estimates approximate the data in the USDA Production Supply and Demand Database and provided by Bivings The latter estimated that Mexican feedgrain demand at approximately 77 million mt in 1989 an estimate similar to the 75 million mt estimate in this study and by the US Department of Agriculture (Table 5)
The Mexican poultry industry comprised about 47 of national feedgrain demand in 1989shy90 The hog sector was responsible for 29 of total feedgrain disappearance Approximately 18
6
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
of total feedgrain demand in Mexico was attributed to the dairy industry with the remaining 6 distributed among the beef sheep and goat industries (Table 5) Nearly half of Mexican feedgrain demand was located in the states of Jalisco (l5) Sonora (10) Puebla (9) Guanajuato (8) and Michoacan (6) The Central (30) Pacific Central (23) and Pacific North (17) regions accounted for about 70 of the national demand for feedgrains (Table 5)
Regional Estimates of Production and Consumption and Apparent Surplus and Deficit Regions
The calculation of the apparent feedgrain surplus or deficit that exists in a region (as determined by subtracting the estimated consumption from estimated production in each region) offers some perspective into the location ofMexican excess demand regions and potential destinations for US grainsoybean exports National production and consumption estimates generally conform to estimates included in the USDA Production Supply and Demand Database These data include input from agricultural attaches at US embassies FAS personnel and country and commodity analysts with the USDA Economic Research Service (ERS) In general production and consumption estimates included in the USDA Production Supply and Demand Database were similar to the official Mexican data estimates When differences did occur however the Mexican estimates were adjusted to reflect those of the USDA
Corn
Much of the Mexican corn supply is consumed directly as tortillas chips and dry masa flour Numerous small processing plants produce these products for direct human consumption Torres indicates that corn processing capacity is highly correlated with the population Accordingly for this study corn for direct human consumption was assumed to be proportional to regional population
Corn for direct human consumption was estimated to be 012 mtcapita (INEGI 1988) This parameter in combination with population (86 million) was used to generate a human corn consumption estimate of 1032 million mt It is estimated that 8-10 of Mexican corn production is diverted to livestock feed This corn is often not suitable for human consumption and some is fed by small producers regardless of the government prohibition Estimates of lossseed and corn processing demands were taken from Garda Garda and Sagarnaga and communication from Secretada de Comercio y Fomento Industrial (SECOFI)
Based on production and consumption estimates for 1989-90 only five states (Chiapas Guerrero Tlaxca1a Puebla and Tamaulipas) and one region (Pacific South) have a corn surplus (Table 6) Nearly half of the Mexican corn deficit (47) is located in the Central region where the
7
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Distrito Federal (Mexico City) and Mexico have deficits of 26 and 13 respectively of the total Mexican corn deficit Additional states with large deficits include Nuevo Leon Sonora and Veracruz accounting for 10 11 and 7 respectively of the Mexican 1989-90 corn deficit These three states in combination with the Distrito Federal and Mexico include cwo-thirds of the projected Mexican deficit (Table 6)
Wheat
The flour milling industry in Mexico is comprised of 133 plants that tend to be located near large population centers (1992 Milling Directory and Buyers Guide) The installed flour milling capacity in Mexico is approximately 17000 mt per 24 hour period Nearly 60 of this capacity is located in the Distrito Federal (17) Puebla (II ) Mexico (9) Guanajuato (9) Michoacan (6) and Nuevo Leon (6) In contrast Sonora the leading wheat producing state in Mexico has approximately 2 of the Mexican installed milling capacity
Historic data on the quantity of wheat milled annually by wheat class in seven regions or states in Mexico (Distrito Federal and Mexico Central Northwest Gulf Puebla Northeast and Jalisco) in combination with state-level milling capacity was used to estimate the quantity of each wheat class milled per state Historic data on wheat produced and milled by region and wheat class were obtained via a communication from the Apoyos y Servicios a la Comercializaci6n Agropecuaria (ASERCA) Milling capacity by state was taken from 1992 Milling Directory and Buyers Guide
Estimated quantities of Durum (Group V) wheat produced and milled by state were removed when estimating state-level productionconsumption Accordingly wheat production and consumption estimates represent only hard and soft wheat Durum or Group V wheat is produced in excess of domestic demands Production of this wheat (500000 mt) is concentrated in Sonora where considerable quantities are fed by the poultry and livestock industries and exported (USDA GEDES Reports)
Two regions have a dominant effect on Mexican wheat production and consumption - the Pacific North region with an estimated 176 million mt surplus and the Central region with a deficit of 128 million mt The remaining six regions have a comparatively modest deficit for a total apparent national deficit of 317000 mt Principal deficits are located in the Distrito Federal (665852 mt) Puebla (416005 mt) Mexico (389871 mt) and Nuevo Leon (211794 mt)(Table 7)
Sorghum
Sorghum is the primary feedgrain in Mexico Approximately 80-85 of Mexican feedgrain demands are met with sorghum Less than 3 of the total sorghum supply is used in industrial and food processes In 1989-90 six of the seven Mexican regions had an estimated grain sorghum
8
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
deficit The seventh region (the Gu1f) had an estimated 363807 mt surplus Approximately 60 of the Mexican grain sorghum deficit (26 million mt) was located in the Central (38) and North Central (22) regions Another nearly 20 was concentrated in the North region (Table 8)
Soybeans
Virtually all of the Mexican soybean supply (97) is crushed or processed for purposes of producing meal and oil Soybean processing by state was estimated from a list of operating processors in 1990 and their associated installed capacity The portion ofnational processing capacity operated by state was used to allocate national crushing to each state (Table 9)
Surplus Mexican soybean production is concentrated in the Pacific North (84) Deficits in supply are located in the Pacific Central and Central regions These respective regions include about 33 and 55 of the national soybean deficit of 085 million mt in 1989190
Mexican Grain and Soybean Production Policies
The government ofMexico has actively influenced the production and consumption ofgrains and soybeans and therefore regional surpluses and deficits through various policies Production policies have generally included guaranteed output prices and subsidized inputs (ie subsidized interest insurance electricity and irrigation and purchased inputs like fertilizer and pesticides) In addition low-income producers have received additional production and marketing subsidies as part of the governments commitment to economic equity (Roberts and Trapido) During the 1980s however economic pressures forced the government of Mexico to begin reducing subsidies For example guaranteed support prices were not fully adjusted for inflation implying declining real producer prices Further guaranteed commodity prices were no longer announced at planting adding to producer uncertainty Also subsidies for purchased inputs were reduced However Mexican grain producers during the 1980s continued to be protected by import licensing requirements and tariffs In general import licenses were not granted until domestic supplies of the respective grains were depleted which supported the price of domestic supplies higher than world price levels
The US Department of Agriculture estimates that during the 1985-87 period transfers by the Mexican government to producers accounted for over one-half of the value of Mexican corn production nearly one-half of the value of Mexican sorghum production (47) 41 of the value
9
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
of soybean production and about 15 of the value of Mexican wheat production (USDA 1992)2 Most of the subsidies to corn producers (about two-thirds of the total subsidy) was in the form of price supports and trade protection with the remaining subsidies for purchased inputs Similar subsidy ratios held for other grains and soybeans except wheat where as much as 80 of the subsidies were for purchased inputs (Grennes et al)
During the 1989-91 period Mexican government agricultural policies and subsidies were substantially altered Guaranteed prices were eliminated in the fall of 1989 for all commodities except corn and dry beans for which guaranteed prices are still calculated in a manner that isolates corn and dry beans from world market price variations In lieu of guaranteed prices a system of negotiated prices (Precios de Concertaci6n) were established for other grains and soybeans The negotiated sorghum prices were based on expected import prices while negotiated soybean prices were set near imported price levels for crushers but above international prices for producers
Corn Producer Subsidies
Farm credit subsidies for corn have been significant because about one-half of the corn producers are ejidatarios who have generally been unable to secure short-term commercial loans Under the ejido land tenure system the land is owned by the government but provided to peasant farmers for their use Consequendy ejidatarios have not been able to use their land as collateral to secure commercial loans The government designed a fiscal support program in 1987 to partially subsidize machinery purchases andor production infrastructure for corn producers Producers in rain-fed areas received payments for 25 of these expenditures while producers in irrigated areas received 15 This program was eliminated in 1989
Since 1990 the government ofMexico has established different guaranteed support prices for yellow and white corn For the 1990-91 marketing year the price of white corn was set at 636000 pesos ($557bushel) and 530000 pesos ($464bushel) for yellow corn (Table 10) Guaranteed prices to Mexican corn producers increased substantially during the 1989-91 period (Table 10) (USDA GEDES Reports Salinas de Gortari) In nominal terms white corn (food corn) prices increased about 67 in nominal terms but about 33 in real terms For yellow corn nominal prices increased about 33 and real prices about 20 Historically Mexico has controlled corn imports through a system of import licensing
Sorghum Producer Subsidies
Historically price supportS and import licensing accounted for much of the support to sorghum producers as did subsidies for credit and insurance However Mexico has eliminated most
The rdated percentages were estimated using official Mexican exchange rates When subsidies are calculated using an estimated equilibrium
exchange rate the subsidies were 25 to 30 percent larger
10
2
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
of producer subsidies in favor of subsidies for human consumption Subsidies for machinery purchases and production infrastructure were eliminated for sorghum producers in 1989
Historically the sorghumcorn price ratio was maintained at about 060 Strong pressure from producers in the early 1980s however resulted in an increase in the sorghum support price producing a shift toward the production of sorghum Nevertheless the government has increased the price of corn relative to sorghum since 1989 as a result maintaining guaranteed prices for corn while shifting to a negotiated price system for sorghum (Table 10)
Under the negotiated price system for sorghum CONASUPO (Compafiia Nacional de Subsistencias Populares) no longer purchased sorghum to support prices Rather users were required to purchase the entire domestic crop before importing In 1990 the government instituted a seasonal (May I-December 1) 15 ad valorem tariff to assute purchase of the domestic crop
The negotiated sorghum prices were based on international prices plus transportation and tariffs Domestic farm-level prices generally move parallel to US prices During the study period (I989-91) planted sorghum acreage decreased Land formerly planted to sorghum was shifted to corn as a result of the relatively high guaranteed corn price and the uncertainties of the negotiated sorghum price
Wheat Producer Subsidies
Wheat input subsidies for fertilizer credit and irrigation water in Mexico have all decreased in recent years Irrigation water and fertilizer have accounted for a large share of the subsidy to these producers Producers paid an estimated 30 of the market price for irrigation water and capital costs of irrigation systems Fertilizer costs to wheat farmers were 40 to 60 of the price of imported fertilizer Subsidies for machinery and production infrastructure were discontinued for wheat farmers in 1989
Mexico protected its domestic wheat market through import licensing and tariffs Since 1992 CONASUPO has permitted private millers to import wheat Milling wheat has no tariff Durum wheat has a 15 ad valorem duty that is being reduced over 10 years under NAFT A
Implementation of the negotiated price system for wheat in 1989 has attempted to move the wheat sector toward market-oriented price policies For the 1989-90 wheat harvest Mexican producers were given the choice between an open market with higher prevailing prices at that time or a lower domestic price but with the guarantee that their entire crop would be marketed at the negotiated price Mexican wheat producers opted for the lower negotiated price which was fIxed For the 1990-91 wheat crop the Mexican government wanted to adopt international wheat prices The dramatic decline in world price however was thought to create major hardships for Mexican wheat producers Accordingly a negotiated formula price was adopted for the 1990-91 harvest The resulting price was calculated in the manner of a guaranteed price It is the intent of the Mexican
11
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
government to move to international prices for wheat production but if necessary to provide a subsidy payment
Soybean Producer Subsidies
Input subsidies to soybean producers have generally declined in recent years Irrigation water has been highly subsidized In 1990 the subsidy for irrigation water was increased Subsidies for machinery and production infrastructure were eliminated in 1989
Historically import licenses and import duties insured that the domestic crop would be purchased before foreign supplies However import license requirements for soybeans intended for crushing were suspended in July 1990 and a seasonal tariff (10 ad valorem) was put into effect for October 1 through December 31 A 15 tariff was implemented for the period August 1 1991 through January 31 1992
Beginning with the 1990 crop soybean prices were established through negotiations (precios de concertacion) In the fmt year the negotiated price was based on a fifteen day average of the nearest soybean futures price plus transportation and internment costs and the tariff equivalent Soybean output fell in 1990 due to limited water availability in northwest Mexico rather than the lower negotiated prices Although water was abundant in the following year world soybean prices were low Responding to pressure from the politically powerful producers in northwest Mexico a tariffwas initiated and prices were established at about 850000 pesos per mt For the 1991 soybean crop the negotiated price was 810000 pesos per mt with producers to receive an additional subsidy payment equal to 70000 pesos per mt
PROCAMPO A New Production Policy
In October 1993 President Salinas announced PROCAMPO a new domestic farm program ~The program coincides with Mexicos obligation under NAFTA to move away from border policies as the means of agricultural price support PROCAMPO replaces current price support schemes for major crops (grains cotton soybeans and safflower) and generally implies farm prices above international price levels Domestic prices will gradually be aligned with international prices Direct income payments are made to eligible producers based on historical acreage with no production requirement The payments are to compensate for lower prices expected as trade barriers are lowered under NAFTA Payments are to be flXed for ten years then completely phased out in years 11 through 15 (Valdes)
PROCAMPO is to be phased-in gradually in 1993-94 and become operational in 1995 During the phase-in producers will receive reduced price supports in combination with per hectare payments In the first year the producer will receive 330 new pesosha ($45acre) and 350 new
12
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
pesosha in real terms in the second through the tenth years In the autumnwinter of 1994-95 corn wheat soybeans and sorghum are to be aligned with international prices Eligible producers are to receive payments based on historical area planted and yield PROCAMPO is considered to
be a socially superior program to price supports since cash benefits are provided to subsistence producers Historically subsistence producers consumed much of their own production on farm and benefitted little from selling crops at relatively high supporc prices
To be eligible for the program producers are required to be registered in the 1993 census as cultivating one of the eligible crops for the last three years New lands will not be allowed in the program This latter stipulation is to prevent qualification by clearing forest or marginal lands Producers who qualify will receive payments regardless of the crop produced Estimated acreage to benefit from PROCAMPO represents 70 of total cultivated area in Mexico
An analysis by the US Depanment of Agriculture suggests that PRO CAM PO will lead to lower grain prices in Mexico (Valdes and Hjorc) Lower prices will reduce acreage planted lower production raise consumption and increase imports Implementation ofPRO CAMPO and NAFTA are expecred to increase Mexican feedgrain demand and imports Corn impons are expected to increase from 15 million mt in 1993 to 60 million mt in 2005 Mexican imports of sorghum are expected to increase steadily from 29 million mt in 1993 to 51 million mt in 2005 and soybean imports from 21 million mt in 1993 to 43 million mt by 2005 Wheat imporcs by Mexico are projected to grow more modestly increasing from 17 million mt in 1993 to 19 million mt in 2005 (Valdes)
Summary and Conclusions
A recent study by the US Department ofAgriculture indicates that corn sorghum soybean and wheat imports by Mexico will increase 30076 104 and 12 respectively above 1993 expon levels during the 1994-2005 period (Valdes and Hjort) The transportation and grain handling infrastructure in Mexico however appears inadequate to efficiendy accommodate these projected increases The purpose of this study was to identify regions in Mexico which are deficient in grain and soybean supplies so that subsequent studies might isolate and analyze USMexico transponation corridors imponant for the expon of grainsoilseeds to Mexico
In 1989-90 the eight analyzed regions in Mexico had an estimated deficit of about 11 million mt Nearly 40 of this deficit was located in the Central region which was calculated to have deficits of 18 million mt 13 million mt 10 million mt and 03 million mt in corn wheat sorghum and soybean supplies respectively Principal deficits in the Central region are located in the Distrito Federal Mexico Guanajuato Puebla and Hidalgo Other regions with significant deficits include the North (16) Pacific Central (11 ) North Central (10) and Pacific North (10)
13
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Appendix Procedures for Estimating Mexican Grain Consumption
This appendix identifies the geographic location ofMexican livestockdairypoultry production and parameters and assumptions used in calculating their feedgrain consumption
PoultryBroilers
Approximately two-thirds of Mexican broiler production is concentrated in the Central (36) Pacific Central (16) and North Central (13) regions Leading states in these regions include Jalisco Guanajuato Durango Mexico Morelos and Puebla Other important producing states include Nuevo Leon Sinaloa Veracruz and Yucatan (Table AI)
The Mexican broiler industry is highly concentrated and employs fully integrated production systems similar to those in the United States It is estimated that about 1 of the broiler operations in Mexico produce about 56 of all broilers (Schulthies et al) Interviews with Mexican and US personnel indicated broiler production technology in Mexico is similar to that in the United States and is generally used throughout Mexic03bull Turkey meat production in Mexico is modest and is projected to be about 3 of broiler production Table A2 shows parameters and assumptions used to calculate grain consumption by the Mexican poultry industry
PoultryLayers
Over one-half of Mexican egg production is concentrated in Jalisco (22) Puebla (20) and Sonora (14) Other important producers include Nuevo Leon and Sinaloa (Table A3) An estimated 22 of the laying enterprises in Mexico produce about 67 of the national supply The majority of these large layer operations are fully integrated and utilize modern technology equal to
that in developed countries (Schulthies et al)
Hog
Pork production in the Bajio comprises nearly 40 of national output States in this region include Jalisco Guanajuato and Michoacan with 19 11 and 10 production shares
Advice on broiler and egg production in Mexico was provided by Cirpriano BerIruljo-Osornio Union Nacional de Avicultores Mexico City
Mexico
14
3
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
respectively Puebla a state in the Central region produces about 5 of national production while Sonora in the Pacific North has a 13 production share (Table A4)
In contrast to poultry production in Mexico hog production is carried out under a variety of systems Three systems dominate (1) technical (2) semi-technical and (3) rural systems The technical system is an intensive confined feeding system and tends to parallel technology in the United States The semi-technical system typically involves smaller less capitalized production units than those characterized by the technical system With the rural or traspatio system hogs scavenge for much of their food supply No grain or concentrate are typically fed An estimated 35 of the Mexican pork supply is generated by the technical system which includes about 17 of the nations breeding herd The semi-technical system includes about 30 of the hog population and produces about 35 of the national pork output In contrast the rural system includes 53 of the hog population but produces only 30 of the annual pork supply
Hogs produced in the technical and semi-technical systems consume grain but tend to be characterized by differing conversion ratios Hogs in the rural system consume virtually no grain To accurately estimate grain consumption by hogs in the technical and semi-technical systems Perez estimated state-by-state production accomplished by each system4
bull This information in combination with conversion ratios and other parameters was used to estimate grain consumption (Table A5)
Dairy
The Mexican dairy production industry is characterized by three production systems including (1) the technical or confined system (2) the semi-technical or pastoral system and (3) the dual-purpose system The technical or confined system includes an estimated 14-18 of the Mexican dairy herd and produces about 50 of the domestically produced milk Cows in this system are typically Holsteins which produce 4000 to 6000 liters per year These animals are fed high quality forages and concentrates Artificial insemination is a typical breeding practice Some heifer replacements are imported from the United States or Canada In general herds in this system are well managed and similar to large dairy farms in the southwest United States (Knutson et al Hallberg et al Odermatt et al)
The semi-technical or pastoral system includes about 23 of the national dairy herd and about 17 of Mexican milk production Most cows in this system are crosses between Zebu and Holstein or Brown Swiss Cows in this system annually produce up to 4000 liters and are maintained on improved pasture supplemented by corn stalks grain and oilseed meals
Dual-purpose operations in Mexico are primarily beef production units that earn additional income by milking lactating beef cows Cows in this system are typically Zebu with annual
4 Rosario Perez-Espejo is witlt Comisi6n Nacion de Porcicultura Mexico City Mexico
15
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
production of 540 to 750 liters per year Cows in this system are fed on native pasture and receive no grain or concentrate
Grain consumption by animals in the technical and semi-technical production systems was estimated from data on regional populations and rations Population data was obtained from the Secretarfa de Agricultura y Recursos Hidraulicos and rations from dairy farms in Mexico (Tables A6 and A7)
Beef
Although beef is important in the Mexican diet a relatively small portion of Mexican beef production is grain-fed An estimated 580000 head were grain-fed during 1990 To calculate grain consumption it was assumed that approximately 160 kiloshead are gained during the feeding process and that the feed to meat conversion ratio is 80 1 (Table A8) Further it was assumed that 40 of the ration was grains
SheepGoats
Sheep and goats are a relatively minor source of meat for the Mexican population In 198990 approximately 57000 mt of sheep and goat meat were produced in Mexico Production is concentrated in San LUls POtOSl (15) Mexico (9) Coahuila (7) Puebla (7) Hidalgo (6) and Zacatecas (5) Population data in combination with a coarse grain conversion ratio of 19 were used to estimate grain consumption (Sullivan et al)
Advice on beef ration and consumption provided by Ricardo Celrna US Feed Grains Council Mexico City Mexico
16
5
References
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Apoyos y Servicios ala Comercializaci6n Agropecuaria (ASERCA) FAX communication 1993
Bivings EL Price Seasonality and Trade Liberalization A Dynamic Spatial Modd of the Mexican Feedgrains Sector Unpublished PhD Dissertation Stanford University 1992
Garda JA MA Garda and LM Sagarnaga Flujos Comerciales de Maiz en Mexico CONASUPO 1992
Garcia MR DG Garcia and HR Montero Notas Sobre Mercados y Comercializacion de Productos Agropecuarios Colegio de Post-graduados Montecillo Mexico 1990
Salinas de Gortari e Quinto Infonne de Gobierno 1993 Anexo Poder Ejecutivo Federal 1993
Grennes T J Hernandez B Krissoff J Matus J Sharples and e Valdes An Analysis ofa United States-Canada-Mexico Free Trade Agreement Commissioned Paper No 10 International Agricultural Trade Research Consortium November 1991
Hallberg Me JR Cranney SM Smith and eM Faldes The Mexican Dairy Economy and Potentials ofLiberalized Trade for the us Dairy Industry AE amp RS 236 Agricultural Economics and Rural Sociology Department The Pennsylvania State University July 1992
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) Abasto y Comercializacion de Productos Bdsicos Maiz 1988
Instituto Nacional de Estadlstica Geografia e Informatica (INEGI) El Sector Alimentario en Mexico Edici6n 1992
Knochenhauer G La Modernizaci6n dd Agro en Mexico Comercio Exterior VoL 40 No9 September 1990
Knutson R eP Rosson III J Oudaw A Angel and J Miller NAFTA and the us Dairy Industry AFPC Policy Working Paper 93-3 Department of Agricultural Economics Texas AampM University May 1993
Krissoff B L Neff and J Sharples Estimated Impacts of a Potential US-Mexico Preferential Trading Arrangement for the Agricultural Sector Agriculture and Trade Analysis Division Economic Research Service US Department of Agriculture January 1992
Matus J Precios de Garantfa y PoHtica Agraria Comercio Exterior VoL 40 No 10 October 1990
17
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Mufioz M Limites y Potencialidades dd Sistema de la Leche en Mexico Comertio Exterior VoL 40 No9 September 1990
1992 Milling Directory and Buyers Guide Sosland Publishing Co Kansas City Kansas 1993
Odermatt P and M Mufioz Retos y Oportunidades del Sistema Leche en Mexico Ante EI Tratado de Libre Comercio Centro de Investigaciones Economicas Sociales y T ecnologicas de la Agricultura y la Agroindustria Mundial (CIESTAAM) Universidad Autonoma Chapingo Chapingo Mexico October 1993
Roberts D and P Trapido Government Intervention in Latin American Agriculture 1982-1987 Economic Research Service Agricultural and Trade Analysis Division 1988
Salcedo S JR Garcia and M Sagarnaga Politica AgrIcola y Maiz en Mexico Hacia el Libre Comercio Norteamericano Comercio Exterior VoL 44 No4 April 1993
Salinas R El Campo Mexicano Ante el Reto de la Modernizacion Comertio Exterior VoL 40 No9 September 1990
Schulthies BK KD Hall C Livas-Hernandez and GW Williams The Agriculture ofMexico TAMRC International Market Research Report No IM-1-93 Department of Agricultural Economics Texas AampM University Forthcoming
Secretarfa de Agricultura y Recursos Hiddulicos (SARH) Subdireccion de Disefio de Sistemas Anuario Estadistico de la Production Agricola Nacional Direcci6n General de Estadfstica March 1991 a
Secretaria de Agriculrura y Recursos Hidraulicos (SARH) Subsecretaria de Planeacion Boletin Mensual de Informacion Bdsica del Sector Agropecuario y Forestal ISSN-0188-4360 October 1991b
Secretaria de Agricultura y Recursos Hidraulicos (SARH) Subsecretarla de Planeacion Cultivos Bdsicos Printipales Indicadores 1960-1991 May 1992
Secretaria de Agricultura y Recursos Hidriulicos (SARH) Subsecretaria de PoHtica Sectorial y Concertacion Indicadores del Sector Agropecuario y Forestal Mexico City Mexico 1989
Secretarfa de Comercio y Fomento Industrial (SECOFI) Servicio Nacional de Informacion de Mercados Comportamiento de la Production y Comertializacion del Trigo Durante el Perlodo 1987-1991 1992
Secretarla de Comercio y Fomento Industrial (SECOFI) FAX communication 1993
18
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Sullivan J J Wainio and V Roningen A Database for Trade Liberalization Studies Economic Research Service US Department of Agriculture March 1989
Torres F Patr6n de Abastecimento y Distribuci6n del Malz en la ZMCM Tesis Doctorado en Economfa Universidad Nacional Aut6noma de Mexico 1993
US Department of Agriculture (USDA) Agriculture in a North American Free Trade Agreement Analysis of Liberalizing Trade Between the United States and Mexico Economic Research Service Washington DC July 1992
US Department of Agriculture (USDA) GEDES Voluntary Report Agricultural Affairs Office Mexico City Mexico various issues
US Department of Agriculture Production Supply and Demand Database Economic Research Service Washington DC various issues
Valdes CM Mexico Western Hemisphere Situation and Outlook Series RS-94-2 Economic Research Service US Department of Agriculture July 1994
Valdes CM and K Hjort Potential Effects of the NAFTA on Mexicos Grain Sector Western Hemisphere Situation and Outlook Series RS-93-2 Economic Research Service US Department of Agriculture July 1993
19
FIGURES
Figure 1 Mexican States
Chihuahua
~
Aguascaliemes
Nayarit
Guanajuato
Morelos
Figure 2 Study Regions in Mexico
Pacific North
~
~
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Figure 3 Percent ofMcrican Com Wheat Sorghum and Soybean Production by Month 1987-1990
70
60
I I
0 I50 -
o o I
middotbullbull bullbull
bull middot bull Imiddot I 40 It
I bull bull bull bull I p i I I~ 30
20
10
o
I bull bull i Ibull bull I
i Ibull bull i I I
middot middot
-
-January February March April May June July AugUSt September October November December
Montb
Com Wheat Sorghum Soybeans
Source Secretarla de Agricultura y Recursos Hidniulicos Subsecretarfa de Planeaci6n Boletin Mensual de Informaci6n Bctsica del Sector Agropecuario y Forestal ISSN-0183-4360 October 1991
bullbull bull bull bull bull bull bull bull
bull bull bull bull
bull bull bull bull
bull bull bull bull
3200
3000
2800
2600
fl ~2400u ~ tv
Vl
2200
2000
1800
1600
Figure 4 Estimated Mexican Population and Per Capita Gross Domestic Product 1980-1991
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2756551 2866160 2392515 3350814 2980038 Pacific North
B California Norte 12192 11219 7686 3273 2012 B California Sur 4600 6109 9017 26643 77843 Sinaloa 149821 140383 237518 317517 813661 Sonora 116222 193609 34540 119401 398184
Subtotal 282835 351320 288761 466834 1291700 Pacific South
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 414742 335026 390123 205272 420705 Pacific North
B California Norte 402448 250695 224104 256642 329284 B California Sur 87657 134704 132881 93328 68619 Sinaloa 611692 397690 1045543 888578 624122 Sonora 1504422 1439295 1396912 1412958 1149707
Subtotal 2606219 2222384 2799440 2651506 2171732 Pacific South
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 1530692 1595018 1530885 1278591 977091 Pacific North
B California Norte 22175 4536 12121 10028 4911 B California Sur 17185 15895 51479 14198 2014 Sinaloa 518871 150242 408616 442862 207834 Sonora 95248 53000 45292 46869 25696
Subtotal 653479 223673 517508 513957 240455 Pacific South
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 2131356 1283374 327880 801668 (281566) Pacific North
B California Norte 6847 210955 10349 989 (215446) B California Sur 8033 40361 400 1134 (33862) Sinaloa 211591 279950 10771 71443 (150573) Sonora 30770 231627 197542 31125 (429524)
Subtotal 257241 762893 219062 104691 (829405) Pacific South
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 199868 345113 11021 (145245) Pacific North
B California Norte 252336 40278 13914 212058 B California Sur 91853 12389 5065 79464 Sinaloa 789239 129029 43520 660210 Sonora 1039965 234038 302345 805927
Subtotal 2173394 415734 364845 1757660 Pacific South
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 113374 132964 64906 113001 131012 Pacific North
B California Norte 4230 4112 4296 2730 2232 B California Sur 930 1830 2275 1916 1951 Sinaloa 26359 27257 33778 32960 30106 Sonora 33850 24825 22985 22885 26223
Subtotal 65369 58024 63334 60491 60512 Pacific South
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Table Al ParameterS and Assumptions to Estimate Grain Consumption by Mexican Poulay Ind1lStlyl
Estimation of Grain Consumption by Broiler Production
(1) Carcass weight to live weight conversion ratio 067
(2) Concentrate to live weight conversion ratio 221
(3) 65 of concentrate is grain
(4) 3 death loss
Estimation of Grain Consumption by Broiler Mother Flock
(1) Hen lays 125 eggsyear
(2) Hen consumes 315 pounds of grain per day
Estimation of Grain Consumption by Layers2
(1) Concentrate to egg weight conversion ratio 231
(2) 65 of concentrate is grain
Estimation of Grain Consumption by Turkeys3
(1) Carcass weight to live weight conversion ratio 67
(2) Concentrate to live weight conversion ratio 301
(3) 65 of concentrate is grain
Advice provided by Cirpriano Bermajo-Osornio Union Nacional de Avicultores Mexico City Mexico Dr Philip Hargis Department of Poultry Science University of Arkansas and Dr PD Thornberry Department of Poultry Science Texas AampM University
Concentrate to egg weight conversion ratio includes poults grain consumption prior to laying Grain consumption by layers mother flock is small and calculated to be 07 of layer consumption
Conversion ratio reflects mother flock grain consumption and death loss
39
1221
Table A3 Mexico Egg Production by Region and State 1987-1991
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Subtotal 216239 290342 256711 296247 2742 Pacific North
B California Norte 13400 16184 14874 14201 18503 B California Sur 1797 4372 3831 3310 3374 Sinaloa 65471 64060 69614 51931 49811 Sonora 177120 167704 169884 112176 122578
Subtotal 257788 252320 258203 181618 194266 Pacific South
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Pacific South Chiapas 35382 15436 13741 14783 32980
Guerrero 18938 19558 20142 20511 20802
Oaxaca 24250 25310 27512 23672 29363
Subtotal 78570 60304 61395 58966 83145
Peninsula Campeche 3898 4621 3574 3000 2800
Quintana Roo 6398 4559 4800 5700 5189
Yucatan 17000 13137 15461 17270 20215
Subtotal 27296 22317 23835 25970 28204
Total 914573 861200 726670 757351 811899
Source INEGI 1992
41
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Table A5 Parameters and Assumptions to Estimate Grain Consumption by Mexican Hog IndllStJf
Estimation of Grain Consumption by Slaughtered Hogs
(1) Carcass weight to live weight conversion ratio 072
(2) Concentrate to live weight conversion factor for technical system 301
(3) Concentrate to live weight conversion factor for semi-technical system 41 1
(4) 75 of concentrate is grain
(5) 4 death loss
Estimation of Grain Consumption by Breeding Herd
(1) Average weight of slaughtered hog is 105 kilos
(2) Each sow produces 165 feeder pigs per year
(3) Sow to boar ratio 17
(4) Sows fed 5 lbslday of concentrate for 306 days per year and concentrate is 80 grain Sow fed 12 lbslday of concentrate for 59 days per year (lactation period) and concentrate is 64 grain
Advice provided by Rosario Perez-Espejo Comision Nacional de Porcicultura Merico City Merica Deparrment of Animal Science Texas AampM University and Dr T D Tanksley consultant to hog industry in Mexico
42
Table A6 Mexico Milk Cow Inventories by Production System RtWon and State 1990
Mexican ReeionState Semi-Specialized S~cialized Total
----------------------------------------- head ------------------------------------shyCentral
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026
Table A7 Parameters and Assumptions to Estimate Grain Consumption by Morlan Dairy Ind~
Estimation of Grain Consumption by SpecializedSYstem
(1) 45 of population lactates at any point in time and this population consumes 56 lcilosday of grain
(2) Non-lactating population (55) consumes 054 lciloslday of grain
Estimation of Grain Consumption by Semi-Specialized System
(1) 45 of population lactates at any point in time and this population consumes 19 lcilosday of grain
(2) Non-lactating population (55) consumes 36 lcilosday of grain
Advice provided by Dr Bud Schwart Department of Agricultural Economics T ex AampM University Rations are based on those provided by operating dairies in Mexico
44
Table AB Mexico Grain-Fed Cattle Sheep and Goat Inventories by Region and Stare 1990
Mexican ReeionlState Cattle SheeeGoats ------------------------------ head --------------------------shy
Central Distrito Federal 215 234 Mexico 40715 5074 Guanajuato 4005 2207 Hidalgo 20296 3585 Morelos 4455 216 Puebla 6384 3908 Queretaro 18955 643 Tlaxcala 2891 1026