WEST LAFAYETTE, Ind. – If Mexico were to follow through on its announcement to ban imports of genetically modified corn from the United States, corn prices and farm incomes in this country could suffer, according to the director of Purdue University’s Center for Commercial Agriculture.

Such a ban would be problematic for Mexican consumers and livestock producers as well, said Jim Mintert, also a professor of agricultural economics at the university.

Since 2015, Mexico has averaged about 27 percent of U.S. corn exports annually, he said.

“That tells you why this is something that’s clearly getting the attention of USDA and even the president,” Mintert noted. “It’s a big deal. It’s going to be front and center if they actually try to impose something like that.

“If they really did impose a ban, it would be problematic for the U.S. That corn would find a home elsewhere, but when you change markets, you’ve imposed a new set of costs on the whole system. It would definitely have a negative impact on corn prices in the U.S. and correspondingly, a negative impact on farm income.”

In December 2020, Mexican president Andrés Manuel López Obrador announced his country would phase out the use of genetically engineered corn by Jan. 31, 2024.

In mid-February 2023, Mexico issued a new decree saying it was eliminating the deadline for corn used for what it called “fodder and industry.” The decree said scientific research would be done – with health agencies from other countries – on the possible impacts of GMO corn on human health.

The decree does prohibit the use of GMO corn for human food (dough and tortilla), adding trade or imports won’t be affected because the country is self-sufficient in the production of non-GMO white corn.

Mexico was the largest importer of U.S. corn by volume in the 2021-22 marketing year, according to the USDA’s Economic Research Service (ERS). Yellow corn used in livestock production accounted for 89 percent of Mexican imports of U.S. corn in the marketing year, the agency said. White corn allocated for human consumption made up 3 percent. More than 90 percent of U.S. yellow corn in genetically modified, ERS said, while little, if any, white corn is genetically modified.

A report released in September 2022 by World Perspectives, Inc., said over a 10-year period, the U.S. economy would lose nearly $74 billion in economic output if a ban would occur. Gross domestic product would contract by nearly $31 billion over 10 years. For the U.S. corn industry, the economic loss over the 10-year period would be $13.6 billion.

Mintert said it would be significant for the United States to lose a market the size of Mexico. A ban, especially one that lasted longer term, might create incentive for some U.S. growers to plant more non-GMO corn and certify it for export, he pointed out.

It might be challenging for farmers to find enough non-GMO seed, and they would need to change practices such as their herbicide and insecticide systems, Mintert said.

Some Hoosier farmers do grow non-GMO corn because they receive a premium for it, he said. “The challenge would be the existing non-GMO market for corn is pretty small and so it’s pretty specialized in terms of the distribution channels that we follow to move that corn to market. This would be a large change and that would be the problem. If you’re picking up 25 million bushels or some small number of bushels going to Mexico that are non-GMO, that would not be that difficult for the market to resolve. In 2022, we exported over 600 million bushels to Mexico. That’s a problem. Logistically, that just creates a whole set of challenges for the industry. Given enough time you could conceivably resolve that but it would be at a higher cost.”

The World Perspectives report said Mexico’s economic output would be reduced by $19.4 billion over 10 years if the country were to institute the ban. Mexico would pay an additional $571 million for imported corn in the first year of a ban, assuming supplies could be found, the study noted. “The GM corn ban may be intended to assist corn farms, but it’s impact on food prices would adversely impact most of the Mexican population, especially the nearly half the population (55.7 million people) considered to be living in poverty,” the report’s authors wrote.

The cost of producing animal protein would rise, the study found.

Mintert said it would be problematic for Mexico to substitute the corn it previously imported from the U.S. as it would need to be brought in by ship. There would be questions about the certification process in other countries for non-GMO corn, he added.

“You can test but are you going to test every load,” Mintert asked. “At the end of the day, you’re talking about something that could have a significant impact on food supplies and food prices in Mexico. That’s not something governments usually like to play with.”

After the mid-February decree from Mexico, USDA Secretary Tom Vilsack said, “The U.S. believes in and adheres to a science-based, rules-based trading system and remains committed to preventing disruptions to bilateral agricultural trade and economic harm to U.S. and Mexican producers,” Reuters reported.

In a statement, the National Corn Growers Association (NCGA) urged the U.S. to consider implementing a dispute settlement under the United States-Mexico-Canada Agreement (USMCA).

“The Biden administration has been more than patient with Mexico as U.S. officials have sought to enforce a rules-based trading system and stand up for American farmers,” said Tom Haag, NCGA president. “Singling out corn – our number one ag export to Mexico – and hastening an import ban on numerous food-grade uses makes USMCA a dead letter unless it’s enforced.”

NCGA said U.S. regulators and leading science and health organizations around the world have determined and long maintained that biotech products currently on the market are safe and beneficial.

During a Senate Agriculture Committee hearing on Feb. 1, Alexis Taylor, USDA undersecretary for trade and foreign agricultural affairs, said the Biden administration does not believe Mexico has the right to exclude GMO U.S. corn from its market under terms of the USMCA.

“The provisions laid out within the USMCA – what Mexico committed to – are foundationally built upon science and we have grave concerns that their proposed ban on genetically engineered corn walks away from that science that they have committed to,” she explained.