Seed Market and Crop Production in Central America
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SPECIAL REPORT
This article will describe the value of traded seed and crop production in Central America, with a focus on the leading markets in the region, examining the current market situation.
Central America Seed Market Overview
In AgbioInvestor’s analysis of the global traded seed market, Central America is a subsector of the greater Central and South American market.
Within Central America, the leading country markets are Mexico and Honduras, after which the next most valuable country is Guatemala. Mexico is the clear leader in value terms, representing almost 96% of the regional value.
The table below shows the value of the Central American traded seed market split by crop. Unlike South America, soybean is not the dominant crop in either area or value terms, with maize being the most valuable crop.
The table below shows the value of the Central American traded seed market split by crop. Unlike South America, soybean is not the dominant crop in either area or value terms, with maize being the most valuable crop.
As a result of the crop mix cultivated in Mexico and the use of farmer saved and government supplied seed, the value of the traded seed market in the country is relatively low at $813 million in 2021. However, despite this, the value of the Mexican seed market is significantly bigger than its regional neighbors as it represents almost 96% of the value of the Central American traded seed market.
In Mexico, maize is an important crop, both for consumption but also culturally as maize is understood to have originated in the country. Maize is typically cultivated in two periods, summer and winter. Summer cultivation takes place between April and January, while winter cultivation occurs between November and July. The summer crop represents approximately 70% of total production. Maize cultivation in Mexico in entirely conventional, as in the country does not allow the commercial production of genetically modified (GM) varieties.
In 2022, Mexico consumed 161% of its national production, meaning the country had to import 17.7 million tons to satisfy domestic demand and sustain ending stocks. Mexico typically sources the majority of its maize imports from the United States. In the last 10 years, Mexico has produced on average 26.1 million tons per year, while consuming 39.4 million tons. Consumption for animal feed now forms the majority of domestic use.
Following maize and vegetables, the next most valuable seed sector in Mexico is cereals, principally made up of sorghum, wheat, and barley. Summed, these crops were planted on a total of 2.2 million hectares in 2021, a fall of 5.2% from the previous year. However, at this level the planted area incudes those from farmer saved/government supplied sources. When only commercial varieties are counted, the planted area that these crops cover is lower.
The value of the nation’s cotton seed market is quite small at $14 million in 2021, owing to the relatively small-planted area. However, cotton is the only genetically modified (GM) crop cultivated in the country, with the first plantings occurring in 1998. As with maize, cotton is cultivated in two periods; the first crop which is cultivated February-December and the second which is cultivated August-February.
The Mexican government has taken an anti-GM and glyphosate stance, having ceased import approvals for grains containing GM traits in 2018, and phasing out the use of the herbicide glyphosate by 2024. The Mexican and U.S. governments have recently debated Mexico’s desire to restrict maize imports from the U.S. that came from GM maize production, however, this position has softened slightly with GM derived grain to be used only in animal feed.
As part of this anti-GM standpoint, the country has also not approved any permit applications for cultivation of cotton since 2019, resulting in the reduced availability of GM cotton seeds and a significant decline in adoption rates.
At present, the expectation for maize cultivation in 2023 is for a 0.7% rise in area, to reach 7.25 million hectares, with production currently forecast to remain flat, resulting in a minor decline in yield. It has been reported that despite increased domestic demand, growers are being disincentivized to cultivate maize due to continuing high input costs and lack of water in non-irrigated areas. In cotton, the 2023 planted area is forecast to fall by 25.7%, while production is expected to decline by 13.7%. The decline in area is in response to low domestic and international demand for textiles, the continuing non-approval of new GM seed varieties and the reduced availability of glyphosate.
Honduras
The traded seed market is considerably smaller in Honduras than in comparison to Mexico at only $23 million in 2021. Maize is the most valuable crop in the country, representing just over 80% of the country’s traded seed market value.
As the table below shows, only maize and cereals are cultivated besides fruit, vegetables, and sugarcane.
There are three maize crops in Honduras, May-October, August-February and December-April, typically producing on average 0.49 million tonnes per year. Honduras consumed 260% of its of its national production in 2022, having to import significantly more maize than it produced. In the last 10 years, Honduras has produced on average 0.49 million tons per year, while consuming 1.1 million tons. Levels of consumption between food and animal feed have historically been similar, however in recent years animal feed has become the principal consumer of maize in the country.
Honduras only cultivates one genetically modified crop, maize, with the first plantings occurring in 2007. Utilization of GM technology remains low at 15.3% of the country’s total maize area, representing 52,000 hectares in 2022. As with many countries, stacked gene varieties form the majority of the GM planted area.
At present it is expected that in 2023 the total maize planted area in Honduras will remain flat against the previous year. •
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