American Andrew Swan, who handles logistics for Grupo Logra at Progreso, told DTN/The Progressive Farmer his company can offload 20,000 metric tons of grain in a day. Most comes from U.S. producers. That short haul from New Orleans to Progreso means quick turnaround and cheaper grain for the end users who pay Grupo Logra for its services.

"Under NAFTA, there is a great benefit for trade between the two countries, which has reinforced the U.S as Mexico's largest grain trading partner," Swan said.

Still, Swan said, some grain from Brazil and Argentina also arrives at Progreso, making the long haul around the eastern hump of South America. That flow of grain from South America has increased this year, Swan said. Brazil has slowly been investing in grain shipping infrastructure, including work on the Amazon River, to help move grain grown in inland Mato Grosso to the Atlantic Ocean. Recently, Brazil opened two northern ports at Itajai and Itaqui. They can get grain to Mexico as much as five days faster -- and cheaper -- than Brazil's older southern ports, Swan said.

Those new ports and possible tariffs on grain could bring more ships from South America to Grupo Logra's facility. "Our role is to arrange the most cost-effective shipping to our receivers," Swan said.

GRAIN BUYERS

Inter Industrias del Sureste's offices sit in a residential area of Merida, a gorgeous city of green plazas and old churches a few miles from the Grupo Logra grain terminal in Progreso. Partners Leandro Silveira Cuevas and Arturo Basulto Tamay founded the company 31 years ago as a sort of buying club and full-line consulting service for livestock producers in the Yucatan region. Most livestock producers there are far too small to purchase U.S. grain by the shipload. However, if they join together -- with help from Inter Industrias -- they can take advantage of both volume-buying discounts and proximity to Grupo Logra's terminal.

In its early days, Inter Industrias' clients imported about 400,000 metric tons of feedstuff annually, almost exclusively from the U.S. Today, the firm's 10 member companies purchase an average of one shipload of grain each month, leading to about 2 mmt a year.

Silveira credits NAFTA's ending of tariffs for much of that increase. He worries that coming renegotiation of the trade pact could complicate his business. Although he does buy grain from Brazil and Argentina when prices dictate, "It would be very difficult for us to switch from U.S. to Brazil" on a regular basis, he said through an interpreter, because of the business relationships with Americans they have built over the decades.

But Inter Industrias and others are looking at new relationships. In fact, Basulto said, the Mexican government recently organized a meeting of grain importers with Brazilian and Argentinian grain sellers. The result was the immediate sale of two shiploads of South American corn to Mexico.

Inter Industrias would not choose that path enthusiastically, Basulto said: "Our natural market is the U.S., but we cannot forget that South America is a market for us too."

Despite their understanding that they might have to shift at least some of their trade to South American suppliers, both Basulto and Silveira are optimistic about the prospects for a fair deal. "Common sense will prevail," Silveira said, and the relationship between Mexico and the U.S. "is like a marriage."

"I hope neither of our presidents are so dumb that they let this fail," Basulto said.

Jim Patrico can be reached at jim.patrico@dtn.com

(CC/ES/AG)

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