Mexico Drought Will Exacerbate Tight Global Corn Markets

Mexico’s corn crop is threatened by the country’s most widespread and intense droughts in nearly a decade, and tight corn markets are likely to transmit the shockwaves worldwide. 

According to the Gro Drought Index (GDI), 4 of the 5 main corn producing states are experiencing their worst drought levels since 2013. In 2011, a similar drought caused Mexican corn production to drop 20%, and forced Mexico to import 25% more corn from the prior year. 

It is still early in the season, and the main spring/summer corn crop is still being planted, but rainfall is urgently needed to rescue the crop. So far, satellite-derived corn-weighted vegetative health shows poor crop vigor in Jalisco reflecting less than favorable weather. 

Mexico is the largest foreign market for US corn in terms of export volume and value. Any drop in Mexico’s domestic production will likely cause the country to rely more heavily on US supplies. 

However, other countries are likely to be turning to the US as well. Gro’s Brazil Corn Yield Forecast Model indicates a significant drop in Brazilian production this year, and China is aggressively purchasing new crop US corn. 

This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.