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Limited rail capacity in Mexico a concern for U.S. trade
The chief economist at the National Grain and Feed Association says rail service capacity issues in Mexico are starting to effect U.S. ag trade.
Max Fisher tells Brownfield…
“There’s a lot of trade going on between the Mexico and United States. It’s just inundating the railroad in Mexico to where they don’t have enough capacity all the time for all the demand. We just need them to essentially add capacity to their system to handle what’s being demanded.”
In a letter to federal officials sent this week, NGFA and several other ag associations say the U.S.-Mexico-Canada Agreement has been successful at increasing demand for U.S. ag products.
Fisher says the U.S. is relying on Mexico to take more grain exports because China has been buying new crop grain slower than ever before.
“With a large crop coming on, we need to be exporting as much grain as we can to support farmgate prices.”
Fisher says it’s unclear all that’s required to improve rail capacity in Mexico, but there’s likely no silver bullet solution.
“The railroad Ferromex has told us they’re working to increase capacity, but it will take time. We want to help them however we can. We know, for example, the grain inspection process in Mexico, we believe there might be opportunities to make that happen more quickly. And in the U.S., we use rail sightings to move certain types of traffic that move slower than others off to the side so other traffic can move.”
An example of increased exports in the last year: Mexico is the top buyer of U.S. corn. In the current marketing year, USDA says Mexico has purchased 764 million bushels of corn from the U.S. compared to 534 million bushels the previous marketing year, all mostly No. 2 yellow corn.
