Mexico’s election last week means a change in leadership for the nation and possible changes in trade with the U.S. Claudia Sheinbaum won the election and will take over the post held by current President Andres Manuel Lopez Obrador later this year.
Jacqui Fatka, the lead economist for farm supply and biofuels in CoBank’s Knowledge Exchange research division, says it could have an impact on several areas starting with the effect it’s had on the peso.
“The dollar-to-peso ratio has been favorable to exports there, especially with corn. We’ve seen a lot of our corn go to Mexico, and with so many headwinds that the industry is facing that was really a tailwind, right? It was kind of giving us some boost,” Fatka said. “But a weaker peso longer term may actually slow US grain exports to Mexico. So corn in particular, that’s one thing we’re watching there with the recent elections.”
She says there could be another change as well, with Mexico’s current refusal to take GMO corn for most purposes.
“There is the GMO concern and that’s going through the USMCA trade dispute process right now,’ Fatka said. “This newly elected president is a very close ally of her predecessor. And so there are some questions of whether she would continue that going forward or whether she would relax that. She’s a scientist and so maybe she would be able to kind of see where things go through the trade dispute. But when she comes into office later this fall, maybe she will reevaluate the country’s position on GMO corn.”
Fatka explains there has been some progress already on that front.
“We’ve also been able to kind of scale that back,” she said. “The fact that at one point we didn’t know if we’d be able to send any corn and now it was just corn that was going to be used in their food. So, a smaller chunk,” she said. “If we weren’t able to send any of our corn for their feeding, then it would really be a problem.”
She said the GMO discussion could have bigger implications.
“This is something that’s really important, not just for the relationship with US and Mexico but around the world,” she said. “The biotechnology and the science behind it is really under scrutiny in this case. So, it’s going to have an impact not just with Mexico trade, but possibly all around the world in the continued just knowledge and understanding of the safety that comes with GMO corn.”
