Thursday, April 3, 2008

Last day in Mexico City

On our final day in Mexico City our trade team met with the Mexican Bakers Association, or Canainpa, as well as the leadership of APPAMEX, the Mexican Grain Traders Association and took a tour of the CONTRI railcar unloading facility on the outskirts of Mexico City.

The Mexican Bakers Association is mostly concerned with consumption of wheat products in the country. Wheat in Mexico has to contend with cultural traditions of corn tortilla consumption. Also, many doctors in Mexico, according to the bakers, recommend people cut their consumption of wheat breads when attempting to diet. And, with the high cost of wheat and flour, smaller mills have to be careful not to price their products out of the range of the poor in Mexico.

Our final stop of the tour was to the CONTRI facility, where we learned about the rail car shuttles that travel from the U.S. to Mexico for unloading. The CONTRI facility is family owned and can move about 120,000 metric tons at one facility, or unload a shuttle in 19 hours. CONTRI handles wheat, corn, sorghum and some soybean meal, from the United States. Their main market for the wheat they bring in from Kansas, Oklahoma and the rest of the High Plains is their own flour mills. They also serve as a rail unloading facility for larger companies looking to move wheat into Mexico via rail.

Following our tour of the facility, the gentlemen of CONTRI treated us to a traditional Mexican meal, before we departed for the States.

One lesson's for sure. Those in the Mexican wheat industry are passionate about their business and it's that passion that will ensure that U.S. wheat will continue to have a strong presence in Mexico for years to come.

Trade team learns about the Mexican milling industry

Our group spent Wednesday and Thursday (April 2 and 3) in Mexico City meeting with millers and bakers who use U.S. wheat.

On Wednesday, we started the day with the Mexican Millers Association or Canimolt. Mexico City has 92 various millers, which process about 5.2 million metric tons of wheat and produce 4.1 million metric tons of wheat flour each year. The millers have a capacity of 8.027 million metric tons of production.

On average, Mexico produces about 3.6 million metric tons of wheat, and usually imports about 2.8 million metric tons of wheat from the U.S. each year to meet its demand. Mexico is the sixth largest buyer of spring wheat in the world for the U.S.

An interesting fact to note is that Mexican farmers produce more durum wheat than the country can use or export. So, they use it for animal feed. It's not a quality issue, just that the Mexican farmers find that durum wheat is easier to grow and yields more than hard red winter wheat. In 2006, Mexico exported nearly 213,000 metric tons of durum to Italy for pasta production.

Life after NAFTA for Mexican producers has changed. They switched out a lot of land from wheat production and turned it into fruit and vegetable production, which are higher value crops.

We moved from the offices of Canimolt to the offices of the Altex Group for a discussion of the transportation and logistics of moving wheat from the United States to Mexico with Armando Rosales. From there it was a late lunch with the Mexican Millers Association.

One thing I discovered today is that the business world in Mexico City runs on a schedule that revolves around the overwhelming traffic here. With more than 22 million people in one city, it's a trial just to get anywhere, let alone anywhere on time. And, Mexican businessmen break around 3 p.m. for a two-hour lunch and really enjoy socializing. I don't know how they do it. If I had their schedule, I'd be exhausted.

Oh wait, I'm on a trade mission that's covered four countries, two continents, seven plane rides, six hotels and umpteen thousand miles. I am on their schedule and I am exhausted!

Our last leg of a long journey—Mexico City

We made it to Mexico City on Tuesday evening—barely.

The plan was to fly from San Jose Costa Rica to Houston, Texas, and then back to Mexico City, Mexico. In theory, we had plenty of time to make it through customs and border control in Houston. In reality, we barely made the plane before they closed the jetway door.

All is well, though. Our group held up the plane long enough for everyone to board, and we took off and made it to Mexico City without a further hitch.

Well, there was the issue of a missing suitcase for Steve Mercer, but luckily it found its way to the hotel before our morning meetings. And, sure, I picked up a nasty hacking cough in Costa Rica, but it's nothing a little cough syrup can't take care of.

All are minor details in the grand scheme of things! Mexico City is unlike anything I've ever experienced. It's 22 million people. Flying over the city in the plane at night the sight was simply amazing. The lights of the city just went on and on and on over the horizon. I've been to Las Vegas, I've been to New York City, but Mexico City is larger than both put together. It's amazing.

And, the size of the city is also good news for U.S. wheat farmers. The population is continuing to grow a taste for wheat products, even though corn tortillas are culturally the bread of choice. The United States is the top supplier, by far, of wheat into Mexico. Coming in second is Canada.

All over Latin America, the message we've found is about the same. Emerging middle classes are developing a taste for wheat products, be they pasta or artisan breads, and U.S. farmers can fill that niche nicely.