World Perspectives

Consumer Price Impacts of Potential Mexican Restrictions on GM Corn: An Economic Analysis

This updated study on Mexico’s announced ban on genetically modified (GM) corn considers the complicated impacts of recent changes in the global corn markets, including the war in Ukraine. It also focuses more intently on specific impacts, such as the implications for Mexican consumers.

Because North America produces more than a third of the world’s corn and most of it is GM varieties, the impacts of Mexico’s planned ban on GM corn would be felt deeply and broadly. The following summarized impacts are not all inclusive but provide a general sense of the more complex implications found inside this report.
Mexico’s proposed ban on genetically modified (GM) corn would adversely impact food security in North America and raise the prices for consumers, particularly in Mexico. World Perspectives, Inc., 2022

Executive Summary

Executive Summary

The report's Executive Summary provided below on this page. 

The press release, PDF version of the Executive Summary, and full-text version of the study are available on the Biotechnology Innovation Organization (BIO) website: https://www.bio.org/press-release/implications-and-consumer-price-impacts-mexicos-biotech-corn-ban

Impacts on Food Security

The announced policy would exacerbate current food insecurity by drastically raising prices for corn, basic foods and other critical products derived from corn in the Mexican economy.

  • The average cost of corn would increase 19%.
  • In the first year of the ban, non-GM corn prices would rise 48% to $8.14/bushel and Mexico would pay an additional $571 million for imported corn.
  • Tortilla prices would rise 16% on average.
  • Price increases in corn protein, fiber, oil and thousands of processed foods distributed by tens of thousands of Mexican food retailers would all incur price increases.
  • Presently, roughly 10% of the Mexican population lacks access to adequate food. Under the policy ban, this level is expected to double or triple in the nine poorest Mexican states, mostly in the south.

Inflationary Impacts

The expected 19% increase in corn costs would inflate the cost of most foods and other goods utilized by Mexicans.

  • The price of corn is the single largest indicator of access to food for Mexicans in the lowest income decile who spend roughly 52% of their funds on food.
  • Mexican livestock production would contract, declining by an average of 1.2% annually.
  • Poultry production in Mexico would fall 17% in total while hog production would contract 13%.
  • Beef and dairy sectors would see their industries’ output fall 9% and 8%, respectively.
  • For Mexico’s poorest populations, prices could rise to the point that eggs become a luxury item which could cause the first drop in egg demand since 2017.
  • Administering the policy to prohibit GM corn imports would entail an additional $1.056 billion in costs related to grain segregation, identity preservation and genetic testing of imports, and would be passed along to Mexican consumers.

Impacts on the Economy

Mexico’s GDP would fall by $11.72 billion over 10 years, and economic output would be reduced by $19.39 billion. There would be an annual loss of 56,958 jobs, which would reduce labor income by $2.99 billion.

Impacts on Food Safety

Three-quarters of processed foods utilize the starch, protein, fiber or oil from corn to make them safer, more nutritious, tasteful, more durable and more affordable. Processed foods also provide consumers with greater variety and increased food security.

Corn is heavily used in processed foods because it has a long shelf life and is relatively inexpensive. The GM corn ban could disrupt the supply of these ingredients essential to food processing, and thus reduce the availability or increase prices of processed foods.

 

This study was conducted in September 2022, by World Perspectives, Inc., on behalf of food and agriculture groups in Mexico and the U.S., including Mexico’s National Agriculture Council (CNA), the National Association of State Departments of Agriculture, the National Corn Growers Association, Biotechnology Innovation Organization, CropLife America, and the Corn Refiners Association.

 

 

 

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