National Cottonseed Products Association

Possible Conference on Cottonseed Oil Promotion
    The Mexican consultant considers that the oil market for cottonseed oil should be focus on four cities, Monterrey, Guadalajara , Mexico City and Cancun. The market in these cities would be the deep frying industry and Hotel and Restaurant business. In order of priority and geographical location Monterrey would be the number one. In order of potential Cancun would be a market were price is not the main factor of influence . For immediate action the cities to focus on would be Monterrey, Mexico City and Guadalajara.

    Monterrey has four companies that directly deal with cottonseed oil: RAGASA, AYAMSA, Mantequera Monterrey (they are together with AYAMSA in the same corporation) and Grasas Mexicanas. Their main business for cottonseed oil is focused on the snack market, deep frying oil. RAGASA has also offices in Mexico City.

    A possible alternative to increase and maintain cottonseed oil use in the areas mentioned in Mexico, could be a conference focusing on the deep frying charactheristics as yield flavor and the specific market that cottonseed oil has (Chefs use in restaurants). This might be done in association with Mexican Companies as AYAMSA of Monterrey. According to Jaime Guerra (AYAMSA-Monterrey) they would be willing to help. RAGASA (Mexico City) agreed to help out in the planning at the moment but if approved they might participate further. This could also be a time when the NCPA companies interested might come down and promote their oil in the specific market mentioned in Mexico directly mainly to cottonseed oil users.

Cottonseed Meal Outlook Report
These reports that have been recently done periodically by the Mexican consultant for Mexico under NCPA supervision are having favorable response by feed manufacturers as ANFACA in Guadalajara who wanted more continues information on cottonseed meal.

This report was updated in January 3 of the present year were availability, crop status, current market prices and comparisons to previous market conditions were mentioned. Emphasis was made on the increased demand for protein sources and climate factors as icy conditions in the southwestern part of the US that had negative effects on hay which caused increase use of supplementation through protein sources.

Cotton Estimates
As of January 31, it is reported by the Confederacion de Asociaciones Algodoneras de la Republica Mexicana the last cycle (2000-2001) production of cotton for Mexico. It was also reported the estimated production by region of production for this years cycle (2001-2002). It can be observed that that there will be an estimated 26% increase in cotton production.

	2000-01			2001-02 forecast
	Hectares	Bales/ha	Total Bales	Hectares	Total Bales
Sinaloa	1,950	4.4	8,590	2,500	10,000
Tamps. Nte.	1,741	2.7	4,700	4,000	12,000
Sonora Sur	5,250	6.0	31,675	10,000	60,000
Sonora Nte.	2,600	5.1	13,500	2,500	6,750
Mexicali - S.L.R.C	15,500	5.7	88,763	30,000	168,000
Juarez-Ahumada	22,000	3.6	80,000	31,500	126,000
Delicias-Ojinaga	4,500	5.2	23,732	10,500	52,500
La Laguna	8,283	7.6	63,528	8,000	61,360
Tamps. Sur y Anexas	10,000	1.8	18,000	10,000	20,000
TOTALS	71,824	4.6	332,488	109,000	516,610

Furthermore, according to the Confederacion this years budget assigned by the Federal Government to the Agricultural Dept for Grain Marketing and Oilseeds is of 4,780 millions of pesos, which will be distributed to the states, starting from the established planting programs; this will be officially established by February 15. This has already caused disappointment in the farmers of the state of Sinaloa who have already planted in this new cycle 2,500 hectares instead of the 20,000 capable of, considering the water available in that state.

Meal Inquiry From Veracruz
Veracruz is one of the important cattle states in Mexico and is located bordering with the Gulf in the tropical zone. It is basically dual-purpose cattle, Brahman and Cebu breeds with a large population of cattle. This area has not yet developed as technically as the Northern part of Mexico, therefore supplementation with high quality protein sources has not developed. For example, in the state of Chihuahua, Mr. Hector Miramontes Rios, President of the Coatzintla Cattle Association of Veracruz inquired on providers for cottonseed meal. They produce 300 tons of feed per month and use 30 to 35 tons of cottonseed meal . They already sent their transports to the border of Mexico and are hopeful to bring cottonseed meal on their way back . This apparently is a small association but it could be the starting point of an intensive promotion campaign for cottonseed meal in the area of the tropics. They were given the NCPA directory and hopefully soon, the Mexican consultant will have direct contact with the head of the Assoc.

ANFACA (Feeds Manufacturer Assoc.) Guadalajara
Lic. Fernando Lozano , Director
Visited ANFACA (National Association of Feed Manufacturers) in Guadalajara in their weekly breakfast reunion. They received cordially the NCPA consultant and asked that they would be interested in more periodic information as the cottonseed meal outlook report just sent to this Association . There were about 30 companies represented at the breakfast meeting. Major discussion centered on corn importation quotas, future market analysis, which is not well used by all the companies but only by a few, the largest and technically modern ones. One company Grupo Gigantes reported importing 10,000 metric tons of corn per week at 1.26 pesos per kilogram put in Jalisco, which is very cheap according to our marketing trends at the moment. This same company was also interested in getting information on cottonseed meal which might be interested in importing in the near furure according to Ms Armantina Gonzales de Alvarez their Director.

Piedras Negras
Asociacion Ganadera Local de Piedras Negras (Local Cattle Assoc)
Ing. Lucio Rodriguez, Director of Feed Mill
According to Mr. Rodriguez, they are using monthly 40 metric tons of cottonseed meal and about 400 metric tons per year and mainly imported from NCPA members. They produce 11,000 metric tons of feed per year for their Assoc. members and non-members. He considers that cottonseed meal use has increase in his area with cattleman and believes that this will increase as cattlemen around this area become aware of the advantage of supplementing a good protein source to improve their reproductive parameters through publicity or any campaign that brings this information constantly to them. This association through Mr. Rodriguez offered to report monthly to the Mexican consultant the amount of cottonseed meal they use and how much they use in their commercial rations. Also he will report the price they are paying for the meal and the price its being sold in Mexico by them. This idea will tried to be follow with other feed manufacturers that buy, use cottonseed meal in their rations and sell it to their customers. This association is located at the border with Eagle Pass.

What is NuSun doing in Mexico
    RAGASA (cottonseed crusher and NCPA associate member) reported strong competitive strategies from NuSun oil in Mexico that was causing to lose a client which was buying from them about 500 metric tons of cottonseed oil per month. Allegedly their client, who still has a contract with them, claimed that the characteristics of this new oil permitted them to change. Therefore, RAGASA insistently asked for information related to a comparative study if there existed one between cottonseed oil and NuSUN. Claims as the oleic content of NuSUN to be consistent around its target of 65% were reported. This information differs from technical reports that the oleic levels vary from 50-70% which would certainly change performance in applications.

    NCPA received this complaint along with the Mexican consultant and the pertinent information was answered related to oleic content, frying, shelf ability and flavor obtained from experts ,as personal communication of experiences of separate studies of both oils. Separate research studies have been done, which will be delivered to RAGASA as soon as it is received. Comparative studies have not been performed up to this date. Experts considered that based on taste cottonseed oil is superior, blends should work well but they have not tried any, frying and shelf ability are equivalent and NuSun has an advantage only in the low saturate level.

    The Mexican consultant asked for information on NuSun in Mexico to other sources as AYAMSA and ANIAME (Oil Crushers Assoc.) and apparently were not aware of the situation. Nevertheless on further observation, AYAMSA reported that Sta. Lucia Oil Refinery in Morelia Michoacan was the one using NuSun as bottled oil and that it was more expensive than cottonseed oil. It was also reported that the owners of this refinery were from Denmark. At the moment a strong campaign publicity wise is starting by the Sunflower Assoc. in pushing NuSun in Mexico through their representative.

    Finally, RAGASA reports that up to date there is a standstill between them and their client which had decided to replace all the cottonseed oil for NuSun but has only changed in one plant equivalent to an amount of 30 metric tons. They don�t know for sure if it is because of a previous contract that they had or because of technical reasons. They will have a meeting with their client in the third week of February to decide the situation.

To: Dr. Lynn A. Jones NCPA Memphis
From: Ricardo Silva NCPA Mexican Consultant
Date: February 28, 2001

Desarrollo Rural de Saltillo A.C.
Ing. Pedro Zarate Martinez, Manager

The Mexican consultant was invited and accepted voluntarily to participate in the formulation of a dairy concentrate that will be fed to dairy cows by about 80 small farmers that belong to the non-profit organization that is called Desarrollo Rural de Saltillo. Their main objective is to help small income farmers through modern techniques and quality up to date standards. This organization had just inaugurated a small feed plant that will give service to members and non-members. The consultant participated in the complete design of their product using both cottonseed products cottonseed meal and cottonseed in the concentrate. He also made some timely visits to the farmers to focus on the type of concentrate for their needs It is very unusual for nutritionist in Mexico specifically in the Laguna area (LALA) to use both cottonseed meal and whole cottonseed in the ration because they are afraid of gossypol toxicity. The ration has 5% cottonseed meal with 15% cottonseed along with other ingredients. The result has been very positive increasing milk production and consumption of the concentrate among members and non members of the organization, thus serving as a promoting platform for the correct use of cottonseed meal in a dairy ration, in an area which is very closed to Monterrey and Torreon (The Laguna area).

Cottonseed Meal Outlook Report

These reports that have been recently done periodically by the Mexican consultant for Mexico under NCPA supervision are having favorable response by feed manufacturers. This report was updated in February 28 of the present year; availability and current market prices were analyzed pointing out a tendency of price decrease in cottonseed products.

Cotton Estimates

As of February 28 it is reported by the Confederacion de Asociaciones Algodoneras de la Republica Mexicana that the total area to be planted will be 110,000 Hectares partially subsidy by the government as of February 15 except for the states of Sinaloa and Sonora which have already planted. This will give an estimated total bale production of 510,000 bales.

To: Dr. Lynn A. Jones, NCPA Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: March 31, 2001

Mexico City
Ricardo Celma, US Feed Grains Council
Mr Butterworth, US Embassy
GMO Seed Labeling in Mexico

    The NOM-035-EM proposed on April 2000 is a reform that was passed by the Mexican Senate but detained at the moment in Congress. It was originally a labeling requirement to be applied to all GMO seeds and their subproducts. This emergency reform as it was originally proposed would have come into effect immediately if it would have been published in the Diario Oficial. When this regulation is published it is expected to be a NOM or regulation and by no means an emergency regulation, since there is not a valid reason for such a measure at the moment, according to Ricardo Celma of the US Grains Council. A normal regulation gives 60 days to be confronted or modified it, if there is a need. If it were of an emergency nature there would still be legal tools to detain it for a period of time.

    One of the defending arguments is that if there is no substantial difference between the original product and the derived GMO product, considering all aspects, there shouldn�t be any labeling and there should only be labeling if there are some proven possibilities that they would affect in some form. Up to now there have been no reports mentioning damages except for the Monarch butterfly incident, which was not focused correctly.

    Mr. Butterworth of the US Embasssy is considered the expert dealing with this labeling regulation of Mexico. He considers that is unlikely that the labeling regulation will affect cottonseed or cottonseed meal used as feed, although it is not a certainty due to previous unpredictable behavior by the Mexican government. He considers that a NOM or regulation would come into effect but does not know when (very hard to predict). What it is a concern, is products for human use. He also mentioned that the GMO labeling will focus only on planting seed not seed for feed use, but he cannot guarantee it.

Mexico City
RAGASA ( Oil Divisi�n)
Ricardo Garza (Director)
Oscar Alcaraz ( Marketing)
Laura Oaxaca ( Research)

The NCPA Mexican consultant met with Laura Oaxaca, Oscar Alcaraz and Ricardo Garza about NuSun oil pressing their 500 metric ton monthly cottonseed oil deal they have with a Mexican Company (reported in previous monthly report). The oil they are selling is for industrial use. They mentioned that they still are at a standstill with their client who had planned to change its cottonseed oil for NuSun considering it was better.

They really appreciated the technical information NCPA had given them about NuSun oil against cottonseed oil. Although there is not a comparative study between them, there are some studies that give a good insight into the qualities of cottonseed oil compared to NuSun oil. They also mentioned that they were willing to help with information dealing with the Mexican market oil consumption and they would certainly participate in cottonseed oil promotion demonstrations. They also believe that there is an industrial market in Mexico for cottonseed oil but it needs more promotion.

Mexico City
Restaurant VIPS
Lic. Manuel O. Cossio, Buying Dept.

It is the largest restaurant chain in Mexico City and was working with the ATO office promoting the products of the cooperators. They use mainly sunflower oil and did not mention anything on NuSun oil utilization. They might be interested in using cottonseed oil but the provider has to be in Mexico City preferably.

Guadalajara
AFIA Trade Show

As in previous years, the Mexican Consultant attended the AFIA show in Guadalajara. Major companies of Mexico and the US were present. One significant observation was the presence of European countries with their products mainly machinery as Spain and Germany. Companies as ADM and CONAGRA seemed satisfied with the response by farmers, feed plants and technicians to this major event.

Guadalajara
GMO & NUTRITION CONFERENCES

The Mexican consultant was invited to this conferences by Dr. Ricardo Celma head of US Grains Council and also the main organizer of this conferences to observe analyze and discuss the GMO topic, its coming up laws, controversies and advantages for Mexico with the major knowledgeable players in Mexico favoring GMO and those against as Greenpeace.

The topic related to its regulations and benefits were extensively covered, confirming the report just mentioned previously.

M�xico City
Mexican Vegetable Oil Study
ATO Office

    The Mexican consultant attended the meeting that discussed the action plan of the Mexican Vegetable Oil Study attended by representatives of the Soybean, Sunflower and Cottonseed Products Associations in Mexico, sponsored by FMD, to be executed by PROMAR (Marketing Researchers).

Some of the suggestions made and agreed by the participants were: Oil producers and Oil Industry Chambers should be included in the study, such as ANIAME, CAPRO, CASADE, etc. and it was agreed that these industry groups would be involved in the study.

    It was also mentioned that during the research, PROMAR should look into the practices of the Canadian Canola industry, to determine why they are gaining such a huge market share. Canola now commands a 1 million metric ton market share. Therefore PROMAR will discuss the issue in the interviews that they have with the industry, to determine what the Canola industry is providing to the Mexican crushing industry as an incentive to import Canola.

    It was also suggested that in the final report a comparison needs to be made as to which sector, HRI or consumer is growing faster and in which sector or part of a sector can the associations have the most impact.

    It was also mentioned that ASA, NSA and NCPA representatives might be present during the focus group sessions.

Cottonseed Meal Outlook Report

This report was updated in March 31 of the present year; availability and current market prices were analyzed pointing out a tendency of price decrease in cottonseed products.

Monthly Report
To: Dr. Lynn A. Jones, NCPA Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: April 30, 2001

Mexico City ATO Meeting
Chad Russel, Director

Attended ATO meeting and met with Dr. Jorge Lucio Leyva Vasquez, Head of Plant and Animal Sanitary Control. There are 105 control inspection sites between the US and Mexican border and 45 within Mexico. There is a total of 500 employees attending this offices. Dr. Leyva mentioned that at the moment, the major imported agricultural products are: apples, corn, milo, soybeans and wheat. The major port of entry is Laredo. He also mentioned that they are in a campaign to correct or to modify the image that the inspectors have at the border. They also have at the moment as a department of the Mexican Government an open door policy.

One of the most common problems mentioned with phyto-sanitary certificates is that they are not filled correctly. The ATO cooperators attending the meeting said that they would be able to help them with any information they need of their products but wanted a consulting period before any law would come into effect or be published in the Mexican government's official newspaper. Furthermore at the meeting, Mr. Butterworth of the US Embassy reported that when the regulation on GMO seeds and its subproducts comes out it will follow similar patterns of regulations previously established by Canada and the US.

ANIAME
Association of Oil Crushing Companies
Lic Amadeo Ibarra Hallal, Director

Visited this oil crushers and fats association that has continuously worked with NCPA.

Exchanging information and publishing it. They are preparing to focus on the Mexican people on the properties and qualities of oils and fats specifying the qualities and nutritional properties of each oil. In our case we could give them the material needed about cottonseed oil for this project.

Monterrey
Mexican Vegetable Oil Study

The Mexican consultant attended a research session conducted to housewives interviewing them about their knowledge about oils. This was focused to three economic levels. This is part of the methodology that the Mexican Vegetable Oil Study is using. This was also done in Mexico City and Guadalajara sponsored by FMD, and is being executed by PROMAR ( Marketing Researchers).

May 2001

Monthly Report
To: Dr. Lynn A. Jones, NCPA, Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: May 31, 2001

NCPA Convention - Santa Fe , New Mexico
Dr. L. A. Jones, Exec. Vice President

The Mexican Consultant attended the NCPA national convention and was received very cordially by all members met. High interest was shown by some members in the Mexican cottonseed products market. Points discussed were current market trends and potential markets in areas where cottonseed products are not used . Suggestions were made on the importance of having bilingual persons answering the phone when attending potential Mexican clients. The possibility of coming into Mexico and visiting potential clients previously arranged by the Mexican Consultant was also discussed.

Visiting Mexican Clients

Due to the high interest shown by some members on visiting potential Mexican clients for cottonseed products, previously arranged by the Mexican Consultant, there is a high possibility of this occurring on consulting with the NCPA Association.

Supervising New Spanish Publication

There is a new translated publication coming out in Spanish in which the consultant is supervising the translation. The article is titled. The Culinary Advantage: Cottonseed Oil. This focusing of cottonseed oil, through this publication, according to the Mexican Consultant will impact oil and cottonseed oil users in Mexico.

Monthly Report
To: Dr. Lynn A. Jones, NCPA, Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: June 30, 2001

Integradora de Agroinsumos del Noreste, S.A.de C.V. - Monterrey
M.V.Z. Washington Wesrtrup Garcia , Director

This company is integrated by poultry farmers, feedlots and farmers that want to buy as a group, corn, milo and other products as soybean meal and cottonseed meal. They consume about 1000 metric tons of cottonseed meal for month. They prefer to work on a future basis and not on the spot market, according to Mr. Washington. They would prefer to bring into Monterrey by railroad service in their own train-port station they are building.

AYAMSA (Aceites y Algodones Mexicanos S.A.)
Ing. Jaime Guerra, Director

This company was some disappointed on prices of cottonseed meal at the moment in Mexico. According to Mr. Guerra they were too low and had too much competition. They have been bringing in continuosly cotttonseed meal from NCPA members.

Botanas Leo S.A.de C.V. (snack company)
Q.B.P. Miguel Romero Davila, Director of Quality Control

This company distributes their snack products not just in Monterrey but all over the northern part of Mexico. They use 5 metric tons of cottonseed oil per day and buy it from Mantequera Monterrey. They consider cottonseed oil a prime oil for their snack products that has given good results, according to Mr. Romero.

MNA ( Micronutrientes y Aditivos- Minerals ,Additives and Feed Manufacturer)
Dr. Jorge Kawas, Director

This company is a major mineral and additives company for feed in the northern part of Mexico and is turning also into a feed manufacturer. Dr Kawas is a major nutritionist that works with dairy, feedlot and cow calf operations. They are very interested in importing cottonseed meal and whole cottonseed into Mexico. Dr Kawas is organizing a group of farmers to import large quantities of cottonseed products . Dr Kawas thinks that they might bring up to 600-700 metric tons of cottonseed meal per month.

Visiting Tour

The Mexican consultant arranged a visiting tour for Planters Oil Company of Pine Bluff Arkansas. The itinerary focused on companies of Monterrey and Guadalajara. It included major cottonseed crushers, cooperatives, snack companies, feed manufacturers and feed manufacturers associations, that are users of cottonseed products. This tours can be arranged previously informing the NCPA office.

July 2001

To: Ben Morgan, NCPA Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: July 31, 2001

Summary of Consultant Activities

Providing list of Mexican cottonseed meal users in the Pacific of Mexico

The Mexican consultant was asked to provide a list of cottonseed meal users in the area of the Pacific of Mexico for an NCPA member. This list was made mainly of Feed Manufacturers, Feed Lot Associations and Feed lots. The list was also complimented with literature in Spanish of the NCPA cottonseed products that was asked to send to their representative in the area to be distributed among their possible clients. The consultant also helped in relating them to some contacts that might be helpful in their endeavors.

Supervising New Spanish Publication

The Mexican Consultant supervised the translation of the final version of "The Culinary Advantage: Cottonseed Oil".

Milk Production 1994-2000 ( liters) Bovine Production (metric tons)
Yearly Growth

1994            7,320, 213                           - 1.1%
1995            7,398, 598                             1.1                       1995                   1,412,336
1996            7,586,422                              2.5                       1996                   1,329,947
1997            7,848,105                              3.4                       1997                   1,340,071
1998            8,315,711                              6.0                       1998                   1,379,768
1999            8,826,818                              6.1                       1999                   1,399,629
2000            9,400,561 *                            6.5 *                     2000                   1,414,949*
2001            9,700,000 *                            5.5 *                     2001                   1,443,250*

* Estimated value
Source: Acontecer Lechero, SAGAR and Seccion de Fabricantes de Alimentos Balanceados

      Jalisco                                                         1,524,735
     Coahuila                                                          853,826
     Durango                                                           826,922
     Chihuahua                                                        722,849
     Guanajuato                                                       619,814
     Veracruz                                                           600,316
     Comarca Lagunera                                          1,541,535

Source: Centro de Estad�stica Agropecuaria, SAGAR

Market Price of Soybean Meal in M�xico 1995-2000
(Indicator of tendency of major protein sources)

Month            1995        1996        1997          1998           1999           2000
Jan                   136         257          263            235             228             217
Feb                  121          247          260            230             223             209
Mar                  141          247          273            219             214             217
Apr                  146          257          290            209             204             233
May                 141          252          297            209             195             245
Jun                   141          235          287            218            192              247
Jul                    151          235          266            216            190              239
Aug                  154          236          264            213            217              223
Sep                  161          257          274            217            230              228
Oct                   207          259          290            222            230              242
Nov                   247          253          286            226            224              250
Dec                   262          256          273            234            211              255

Source: Seccion de Fabricantes de Alimentos Balanceados para Animales-Canacintra.

To: Ben Morgan, NCPA, Memphis
From: Ricardo Silva, NCPA, Mexican Consultant
Date: August 31, 2001

Summary of Consultant Activities

Monitoring

On numerous occasions, the Mexican consultant has contacted Mexican Companies with NCPA and recently has advised companies from NCPA interested in the Mexican cottonseed products market where to look according to their objectives. The feedback on this strategy is not easy to monitor but talking to parties involved of what results have been obtained since their contacts, it seems that there is more business being done related to cottonseed meal use by Mexico and definitely a growing potential for more cottonseed meal imports into Mexico.

Related to monitoring, a Mexican cow-calf association on the border of Mexico agreed to inform the Mexican consultant of their imports into Mexico of the last eight months of cottonseed meal and their sale price in Mexico as of August 31. They use the cottonseed meal to produce mainly a supplement for their members. The feeds that they produce are mainly for ruminants.

January        43,810 Kgs
February       66,880
March           44,905
April             23,160
May              64,765
June              65,390
July             110,710
August          68,020 sale price = US$219/short ton at 9.4 pesos to 1US$
                   487,640 = 487 metric tons

This association considers that they have imported larger quantities in previous years and hope to import more this year. The particular advantage of this Association is that they are able to use their own transportation (US trucks) and bring the product within the 20 km limit of Mexico that foreign cars or transports are allow to enter with no problem.

Chihuahua
ALCODESA (Alimentos Concentrados de Delicias)
Ing. Marco Guerrero Chavez, Director

This is a Feed Plant that belongs to a Cooperative of mainly dairy farmers of the city of Delicias in Chihuahua. They are consumers of cottonseed and had used Canola meal as their protein but are not at the moment. They had bought from February to the present 4,863 metric tons of cottonseed and their protein sources have been corn gluten, soybean meal and distillers dried grains, according to Mr. Guerrero. When asked about why not using cottonseed meal in their dairy rations, he said that there hadn�t been a consistent availability in previous occasions but possibly the using of both cottonseed meal and whole cottonseed is what keeps them from using it. Nutritionally, it has been proven that both can be used following a careful balancing program for gossypol content. Considering these, there is potential for the increase usage of cottonseed meal. They produce between 8500-9000 metric tons/month of feed mainly for dairies and some for beef. Mr. Guerrero also mentioned that they are using a cottonseed meal supplement for farmers in the area of Parral Chihuahua with a meal that has 20% fat which is introduced to the meal by the provider. They sell about 40 met tons/month during winter of this supplement.

Union Ganadera Regional de Chihuahua
Carlos Carrasco Guerra, Buying Dept.

According to Mr. Carrasco, they have used 3,500 metric tons of cottonseed meal for their feed plant and also for supplement use for their clients mainly members of this cow calf association during 2001. They will be buying more cottonseed meal the rest of the year. In previous years they have imported and consumed about 6,000 metric tons per year. This area has always being a stronghold for cottonseed meal use since it reflects similar cow calf management practices as the state of Texas.

Cottonseed Meal Promotion
The Mexican consultant will be promoting more usage of cottonseed meal in the state of Zacatecas through their Feedlot Assoc in the month of September through a conference focusing on Availability and Advantages of Cottonseed Meal

Mexican Data

National Comsumption of Balanced Feeds

              Integrated Co.     Comercial Co. Imported         Total
                                  (Thousands of Tons)
1994          9,524                     5,020                 698              15,242
1995        10,489                     4,370                 140              14,999
1996        10,485                     4,090                 134              14,709
1997        10,904                     4,680                 149              15,733
1998        12,197                     5,740                 184              18,121
1999        12,685                     6,650                 215              19,550
2000*       13,207                     6,803                 259              20,269

* Estimated
Source: Seccion de Fabricantes de Alimentos Balanceados para Animales- Canacintra

Origin and Comsumption of Ingredients Used by the Feed Manufacturing Industry
                           In the Year   2000

Ingredient               National          Imported              Total
                                  (Thousands of Tons)
Milo                           5,000                5,100                   10,100
Corn                             600                2,153                     2,753
Wheat, barley, oats       100                     47                        147
rice etc.
Total                         5,700                 7,300                  13,000

Oilseeds
(Soybean meal and       176                3,424                     3,600
others)
Other ingredients        2,210                1,200                     3,410
(flours,wheat middlings
oils)
Total                         8,086               11,924                  20,010

Source: Seccion de Fabricantes de Alimentos Balanceados para Animales- Canacintra

To: Ben Morgan, NCPA Memphis
From: Ricardo Silva, NCPA Mexican Consultant
Date: September 30, 2001

Summary of Consultant Activities

MONTERREY EXPO ALIMENTOS

This Food show is held every year and compared to last year it improved. Previous to this show, the consultant was asked for Spanish brochures promoting cottonseed oil by Mr. Luis Garcia who works as a consultant for RAGASA (cottonseed crusher) material that was delivered to him. This material was also presented in the show in RAGASA�s booth. It was learned through Mr. Garcia that RAGASA is building a new oil refinery in Monterrey, 8,000 to 10,000 metric tons/month. It will be next to their soybean crushing plant. It will basically refine soybean oil, canola and cottonseed oil. This was the reason apparently for trying to get cottonseed oil promotion. This plant will open approximately in February of 2002.

INQUIRIES

An NCPA member asked about a list of Mexican cottonseed products users in Mexico and the information was updated.

OUTLOOK REPORT

A brief Outlook Report of Cottonseed Products was done for Mexican customers of NCPA. This document was done in English and translated into Spanish. It focused on the tendency of the products at the moment.

ZACATECAS
Union De Engordadores de Zacatecas
M.V.Z. Ruben Reynoso Davila, Director

This is a feedlot association that already consumes cottonseed meal about 1,000 metric tons per year. Two years ago they made a deal for double the amount but the deal was not delivered completely. They are very interested in keep on using it. They will be probably be buying in the next few months according to Mr. Reynoso. The Association has 20 members, major cattlemen of the region. A presentation was made to half of the members due to climate conditions but they asked the consultant if he could give it again at a later date. The presentation dealt mainly with the topic �Availability and Advantages of the Use of Cottonseed Meal For Dairy and Beef Cattle�.

Due to previous contacts, the consultant was invited to present the same topic that was presented in Zacatecas, this time to another association, Union Ganadera Regional de Veracruz. This is a major cattle state but is in the tropics an area with low technical resources and climate and cattle disease adversity. The presentation will be partially adapted to the type of management and cattle conditions of the area. The presentation will be done on October 12.

MEXICAN DATA

MEXICAN ANIMAL AREA DEVELOPMENT BY ACTIVITY 1999-2000
                                                         PARTICIPATION ON OVERALL                       ACTIVITY               GROWTH                    ANIMAL PRODUCTION
Poultry                        + 4.3 %                               50.2 %
Swine                         + 4.1 %                               20.6%
Milk (Bov.)                  + 3.5 %                                17.5%
Meat (Bov.)                 + 1.1%                                  8.3%

PER CAPITA CONSUMPTION
ACTIVITY            1999             2000             GROWTH
Poultry                 20.8              21.6              + 3.8 %
Meat (Bov.)           15.9              17.0              + 6.9 %
Swine                   11.3              12.2              + 7.9 %
Eggs                    18.7              18.8              + 0.5 %
Milk (Bov.)           106.7            108.0              + 1.2%

BALANCED FEED PARTICIPATION IN ANIMAL ACTIVITY
ACTIVITY                   PARTICIPATION
Poultry                           73%
Meat (Bov.)                    59%
Swine                            76%
Eggs                              71%
Milk                              48%

Source: La Industria Alimenticia En Mexico

The feed manufacturing sector is using 66.7% of its capacity and no major investments have been considered at least in the next two or three years.

MEXICO CITY US ATO
Chad Russell, Director

The consultant attended the ATO meeting held in Mexico City where a brief report was made by City Bank that has taken over BANAMEX and possibly they will be offering credit programs to Agriculture with not such expensive financial costs as before. Also it was learned that an ATO office has been opened in Monterrey were Ms Jeanne Bailey will be the Director. This office will be near to the Mexican Consultant�s office in Saltillo.

MEXICO CITY
CONFEDERACION ALGODONERA (COTTON CONFEDERATION)
Mr. Novoa

A routine visit was made to this association that continuously gives out information on cotton production in Mexico with efficiency. The latest estimate for this years cycle is of 400,000 cotton bales, according to Mr. Novoa. Far from expected production according to Mr. Novoa due to lack of government support.