Could Mexico’s Drought Recovery Dampen Corn Exports?

U.S. corn exports are on track to have one of their best years on record during the 2024/25 marketing year. That is due to continual growth in shipments to Mexico, as well as broad growth among key importers. Significant export growth to Mexico occurred due to historical drought and moisture degradation. However, recent rainfall in the region could lead to a recovery in crop production and reduce reliance on imports. 

1. Strong US Exports

As of the week ending June 12, U.S. corn exports for the 2024/25 marketing year are up 29 percent from a year ago at 2.1 billion bushels and 29 percent higher than the five-year average. Exports rose across most markets, though shipments to China fell sharply, down 100 percent from the five-year average. Otherwise, while year-to-date exports to Mexico experienced sizeable growth from the previous season, exports to South Korea saw the most impressive growth, followed by Japan and Colombia. Additionally, volumes exported to the rest of the world grew 80 percent year-over-year. 

Data from the U.S. Census Bureau showed that exports to Mexico since September increased 41 percent from the previous year in the 2023/24 season. That compares to only 11 percent growth in exports in 2024/2025. 

2. Mexico Drought Background

According to the National Oceanic and Atmospheric Administration, long-term drought has been ongoing across portions of Mexico since the winter of 2022/23. Widespread drought hit Mexico’s most agriculturally productive regions. After production hit a record 28 million metric tons (MMT) in the 2022/23 season, output was slashed by 16 percent to 23.5 MMT.

That forced the country to turn to the U.S. for more supplies, importing a record 16.1 MMT or 636.2 million bushels during the 2022/23 season. Since then, Mexico’s imports have only grown larger, as weather problems persisted. 

Last spring, nearly 76 percent of the country was experiencing drought, clocking in the driest May on record. That led to another reduction in corn output during the 2024/25 season. Nearly a year later, the North American Drought Monitor showed that only 46.5 percent of the country was experiencing D1-D4 drought. Production is expected to recover to 24.5 MMT, but will still remain five percent below the five-year average. 

Satellite imagery data shows that Mexico received much-needed rainfall in May, leading to improvements in root-zone soil moisture. However, below-average rainfall last week over the past week has already led to worsening moisture conditions due to substantial deficits in groundwater moisture. 

Matt Reardon, a senior atmospheric scientist with Nutrien Ag Solutions, said parts of Mexico could receive a substantial amount of rain to finish off June, though the major corn areas in the Northwest part of the state could miss out on the precipitation. Forecasted heat in the Central and Northwestern U.S. could bring above-average monsoonal activity in July and August, increasing storm activity in major growing areas. 

3. Trade Policy

Large supplies have kept U.S. corn competitive in the global marketplace and kept shipments above or near the five-year average for much of the current marketing year. The U.S. accounts for about 90 percent of Mexico’s total corn imports. Recent spats between the U.S. and Mexico over tariffs and foreign policy could dampen trade relations. Fortunately, Mexico’s involvement in the United States-Mexico-Canada Agreement would likely keep Mexico as a traditional corn buyer for the U.S.

U.S. corn exports have surged on strong demand from drought-stricken Mexico, but improved rainfall and rising domestic output could cool import needs in the year ahead. Continued U.S. competitiveness and stable trade relations will be key to sustaining export strength.

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