According to one of the world’s largest grain traders, the biggest advantage the United States holds in the Trump administration’s war of words with Mexico is this: U.S. corn is the best deal. DTN says chief executive Soren Schroeder, of Bunge Ltd., told analysts during a teleconference, “The extent to which there is any switching that takes place to South America, frankly, it all depends on price. And at the moment, it doesn’t work.”
Mexican officials have raised the possibility of shifting corn purchases to Argentina or Brazil, rather than continuing to buy from the United States now that President Trump signed an executive order to build a wall along the southern border, and White House officials suggested higher tariffs or a border adjustment tax on Mexican products.
Mexico is the No. 3 market for U.S. farm exports and a leading customer for U.S. corn and soybeans. DTN says USDA calculates U.S. corn has a $14-a-tonne price advantage over Argentine corn at present. In coming months, the price gap will narrow as Argentina’s new crop comes onto the market and U.S. supplies shrink, though remaining ample.