USDA Weekly Grain Transportation: Landed Costs of Grain to Mexico Rose in First Quarter 2022

<div><font face="verdana"><b>USDA Weekly Grain Transportation: Landed Costs of Grain to Mexico Rose in First Quarter 2022 </b><br></font></div><div><font face="verdana"><br></font></div><div><font face="verdana">?Mexico is a major importer of U.S. grain (GTR tables 13, 14, and 15). Low transportation and landed costs for U.S.-Mexico routes are vital to the competitiveness of U.S. grain in Mexico and globally. U.S. grain is transported to Mexico either by cross-border land movements or by sea movements to Mexican ports for inland distribution. This article examines the costs of transporting U.S. grain to Mexico over land to Guadalajara (land routes) and by sea to Veracruz (water routes), tracking changes over time (table 1).</font></div><div><font face="verdana"><br></font></div><div align="center"><img src="https://download.qtmarketcenter.com/jay/USGT-May26-1.JPG"><font face="verdana"></font></div><div><font face="verdana"><br></font></div><div><font face="verdana">Quarter-to-quarter transportation costs. From fourth quarter 2021 to first quarter 2022 (quarter to quarter), total transportation costs increased for corn and soybeans shipped through the water routes, but fell for waterborne wheat. Total transportation costs decreased for U.S. corn, soybeans, and wheat through the land routes. Rising water-route shipping costs for corn and soybeans reflected higher truck and barge rates. Land-route shipping costs decreased with falling rail rates (public tariff, plus fuel surcharge). Truck rates rose partly because of a quarter-to-quarter rise in diesel fuel pricesBarge rates rose amid a tight supply of empty barges. Because of high water, towboats on the Ohio and Lower Mississippi River pushed 12-16 percent fewer barges upriver than usual. Thus, fewer barges were available to deliver the same volume of grains (GTR, April 14, 2022).&nbsp; &nbsp;<br></font></div><div><font face="verdana"><br></font></div><div><font face="verdana">As demand for bulk shipping fell because of various seasonal holidays around the world, ocean freight rates likewise fell.</font></div><div><font face="verdana"><br></font></div><div align="center"><img src="https://download.qtmarketcenter.com/jay/USGT-May26-2.JPG"><font face="verdana"></font></div><br><div align="center"><img src="https://download.qtmarketcenter.com/jay/USGT-May26-3.JPG"><font face="verdana"></font></div><br><div><font face="verdana"><br></font></div><div><font face="verdana">Year-to-year transportation costs. From fourth quarter 2021 to fourth quarter 2022 (year to year), total costs of shipping all grain?U.S. corn, soybeans, and wheat?to Mexico by the water routes rose because of higher truck, barge, and ocean freight rates. Total costs of shipping all grain to Mexico by the land routes rose slightly because of higher truck rates.</font></div><div><font face="verdana"><br></font></div><div><font face="verdana">Quarter-to-quarter landed costs. Quarter to quarter, landed costs rose for all grain shipped via the water and land routes. For seaborne corn and soybeans, the higher landed costs reflected a combination of rising transportation costs and farm values. For seaborne wheat and all grain shipped through the land routes, higher landed costs reflected an increase in farm values that exceeded the decrease in transportation costs (table 1 and figs. 1 and 2). The share of landed costs comprising transportation ranged from 13 percent to 25 percent for the water routes and from 16 percent to 29 percent for the land routes.<br></font></div><div><font face="verdana"><br></font></div><div><font face="verdana">Year-to-year landed costs. Year to year, landed costs increased for all waterborne and land-route grain, because of both higher transportation costs and higher farm values.</font></div><div><font face="verdana"><br></font></div><div><font face="verdana">U.S. Exports to Mexico. According to USDA?s Federal Grain Inspection Service, Mexico imported 4.00 million metric tons (mmt) of U.S. corn, 1.28 mmt of U.S. soybeans, and 0.98 mmt of U.S. wheat in first quarter 2022. Quarter to quarter, U.S. inspections for export to Mexico decreased 6 percent for corn, fell 17 percent for soybeans, and increased 29 percent for wheat. Year to year, U.S. inspections destined to Mexico showed rises of 20 percent for corn, 3 percent for soybeans, and 24 percent for wheat. Despite a general increase in landed costs, total U.S. grain shipments to Mexico have been strong, as corn, soybeans, and wheat shipments rose year to year.</font></div><div><font face="verdana"><br></font></div><div><font face="verdana"><br></font></div>LJ<br>