Impact of potential Mexico biotech ban

BLOOMINGTON, Ill. — Mexico’s potential ban on all biotech corn imports would not only negatively impact the U.S. market, but also adversely affect that country’s own citizens, according to a report by a market analysis and consulting firm.

Mexican President Andrés Manuel López Obrador initially said he would enact a decree that would ban all imports of biotech corn into Mexico, effective Jan. 31, 2024.

Obrador has since indicated that he would be open to allowing imports of yellow corn, used for animal feed, into the country, but white corn, used for human consumption, might still face hurdles.

A report by World Perspectives Inc., found the biotech ban would “exacerbate current food insecurity by drastically raising prices for corn, basic foods and other critical products derived from corn in the Mexican economy.”

The findings on the impacts in Mexico if a ban on all biotech corn is enacted include:

• The average cost of corn would increase 19%.

• In the first year of the ban, non-GM corn prices would rise 48% to $8.14 per bushel and Mexico would pay an additional $571 million for imported corn.

• Tortilla prices would rise 16% on average.

• Price increases in corn protein, fiber, oil and thousands of processed foods distributed by tens of thousands of Mexican food retailers would all incur price increases.

• Presently, roughly 10% of the Mexican population lacks access to adequate food. Under the policy ban, this level is expected to double or triple in the nine poorest Mexican states, mostly in the south.

• The price of corn is the single largest indicator of access to food for Mexicans in the lowest income decile who spend roughly 52% of their funds on food.

• Mexican livestock production would contract, declining by an average of 1.2% annually.

• Poultry production in Mexico would fall 17% in total while hog production would contract 13%.

• Beef and dairy sectors would see their industries’ output fall 9% and 8%, respectively.

• For Mexico’s poorest populations, prices could rise to the point that eggs become a luxury item which could cause the first drop in egg demand since 2017.

• Mexico’s GDP would fall by $11.72 billion over 10 years and economic output would be reduced by $19.39 billion. There would be an annual loss of 56,958 jobs, which would reduce labor income by $2.99 billion.

Impacts On U.S.

The study found the following impacts on the United States if a total biotech ban is enacted:

• Over the 10-year forecast period, the Mexican ban on GM corn would cause the U.S. economy to lose $73.89 billion in economic output and GDP would contract by $30.55 billion over 10 years. Additionally, the United States would lose 32,217 jobs annually with labor income falling $18.38 billion.

• The net economic loss in the first year of the ban to the U.S. corn industry is $3.56 billion, followed by an additional $5.56 billion loss in the second year. Cumulatively over the 10-year forecast period, the industry would experience a $13.61 billion economic loss.

• The U.S. corn wet milling industry would suffer $7.65 billion in losses over the 10-year forecast period.

• The U.S. ethanol industry, including distillers dried grains with solubles, or DDGS, would incur a net loss of $521.5 million after accounting for gains from lower GM corn prices.

• Transportation linkages — rail, trucking and shipping — on both sides of the border would contract. The U.S. rail industry alone would lose $3.33 billion in economic output over 10-years.

Sponsors of the study include Mexico’s National Agriculture Council, U.S. Grains Council, the National Association of State Departments of Agriculture, National Corn Growers Association, Biotechnology Innovation Organization, CropLife America, the Corn Refiners Association, Mexican Association of Feeders of Bovine Cattle, Local Agricultural Association of Matamoros, Association of Suppliers of Agricultural Products Mexico, Mexican Association of Seeds, National Association of Manufacturers of Food for Animal Consumption, National Chamber of Industrialized Corn, National Council of Manufacturers of Balanced Food and Animal Nutrition, Crop Protection Science and Technology, National Swine Unification, Mexican Union of Agrochemical Manufacturers and Formulators, and Mexican Association of Food Producers.