Wednesday, May 28, 2014

US exports of grain to Mexico increasing

While a Texas Tech professor predicts rising food prices because of drought and disease, Blair Fannon of Texas A&M reported on May 5, 2014 that U.S. grain exports to Mexico rise in value to $7.3 billion.
COLLEGE STATION – U.S. exports of grain, oilseed and related products to Mexico averaged 22.2 million metric tons per year from 2008-2012 with an average annual value of $7.3 billion, according to a report by the Center for North American Studies at Texas A&M University.

The result is a 22 percent volume increase over the average of the early 2000s and two and a half times the value, according to the research findings.

“Higher grain and oilseed prices on the world market were certainly one major factor,” said Dr. Parr Rosson, professor and head of the department of agricultural economics, Texas A&M University. “The other factor was increased demand in Mexico for grain-fed beef, which has risen, especially in major cities across that country. Increased number of cattle in feedlots resulted in not only more tonnage being fed, but higher prices as well. The third factor was a lower valued U.S. dollar during much of this time period, especially compared to historically high values over the past 20 years.”
Remember, food will follow the money.  If that means U.S. food prices rise to improve both the nation's trade balance and the profits of agribusiness, that's what will happen.  The good news is that Mexico's economy is improving enough to afford our grain.  That pleases me, even if it means I have to pay a little more for my food.

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