Mexico may meet its goal of replacing half of its import needs with non-genetically modified corn, but will struggle to meet a deadline for what could provide an impetus to higher prices for its staple crop, BTA reported, citing experts.

Mexico imports about 17 million tons of mostly genetically modified (GM) corn from the United States, but has a presidential decree that aims to phase out GM corn and the herbicide glyphosate by January 31, 2024. Supporters of the ban say the GM seeds are contaminating centuries-old native varieties of Mexico, and legal battles over claims that glyphosate-based herbicides cause cancer have been fought in US courts for years.

After pressure from the US and threats of a dispute over the US-Mexico-Canada Agreement (USMCA), Mexican President Andrés Manuel López Obrador said in November that imports of GM yellow maize for animal feed would continue to be allowed, pending annual permit from the health regulator COFEPRIS.

31.7% drop in grain exports from Ukraine in the 2022/23 season

However, Mexican officials have not said how much GM yellow corn they will continue to buy or whether the plan to drastically reduce imports is still in place.

Deputy Agriculture Minister Victor Suarez told Reuters in October that Mexico, the biggest buyer of US corn, was on track to cut corn imports in half in 2024. It would make up the difference by increasing domestic production and seeking deals with farmers from the US, Argentina or Brazil for non-GM corn, he said.

Reuters interviewed sector experts, traders and farmers about the challenges of securing supplies of non-GM corn large enough to meet Mexico's import needs - and in time for its 2024 decree. More than 90 percent of corn grown in the U.S., the main source of the commodity in Mexico is genetically modified, according to the National Corn Growers Association (NCGA).

Ken Dahlmeier, CEO of Clarkson Grain, a US supplier of organic and non-GM grains, commented that although there is currently not a large enough supply of non-GM crops in the US for Mexico, there may be , if Mexico acts quickly.

"There is still time for market forces to influence supply and logistics to meet Mexico's needs and wants, but that window is closing quickly," Dallmeier explained, noting that a deal of this magnitude would require a "Herculean effort."

The rising trade tensions come as global demand for grains and oilseeds is strong and supplies are tight after the conflict in Ukraine disrupted grain exports from the Black Sea region and widespread drought hampered crops on the American plains.

But for farmers looking for a potentially lucrative new market, price can be a powerful motivator.

Dahlmeier estimated that Mexico would have to pay a premium of up to 20 percent to make it worthwhile for American farmers to grow non-GM corn, an increase that could fuel Mexican inflation.

Still, the financial incentive may not be enough to convince American farmers to change their production methods, said Andy Jobman, president of the Nebraska Corn Growers Association.

Switching to non-GM crops means using more pesticides and more tillage to control weeds, which ultimately leads to soil erosion, Jobman said.

"It's like going from using electricity to going back to using candles in terms of technology," he said.

If Mexico waits until October 2024, it could be more realistic to secure supplies of the U.S. crop that year, according to Ben Scholl, president of grain buyer Osterbur and Associates.

However, Mexico will struggle to make deals directly with farmers and will instead need reliable partners through major commodity traders such as Cargill and Archer-Daniels-Midland to pull the change, he thinks.

According to a trader at a leading market firm, who spoke on condition of anonymity, it is "totally unrealistic" to expect farmers in the United States or alternative major suppliers such as Argentina and Brazil to make the necessary change.

It's hard to quantify how much non-GMO corn is produced in the U.S., and that data isn't tracked by the U.S. Department of Agriculture, said Purdue University agricultural economist Michael Langemeier.

In theory, there is enough U.S. farmland producing some form of non-biotech corn to meet Mexico's current import demand, according to a Reuters analysis of U.S. Department of Agriculture (USDA) data.

U.S. farmers planted and harvested about 5.7 million acres of non-biotech corn for grain in 2022 — about 7 percent of the nation's total corn acres, according to the latest USDA data.

Mexico confirms ban on genetically modified corn imports from 2024.

Mexico imported a total of 17.3 million tonnes from July 2021 to June 2022, with 16.9 million tonnes coming from the US, according to trade data.

It would take about 3.9 million acres to produce that volume of corn if each acre produced the latest average corn yield of about 172 bushels per harvested acre, according to USDA data.

The rest of the volume bound for Mexico comes from Brazil, Argentina and the European Union, said economist Miriam Morat of the International Grains Council.

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