Drought is on going in Mexico, United States

Supply-chain Risk Briefing

1) Summary The ongoing drought in the United States and Mexico is classified as medium level and is being monitored. The GDACS alert level is currently at Green stage, indicating limited immediate risk, but continuous observation is required.

2) Supply-chain impact

• Agricultural supply chains: Potential impact on major grain production including corn, soybeans, and wheat in the U.S. Midwest grain belt and Mexican agricultural regions
• Livestock-related effects: Concerns over increased costs in meat and dairy supply chains due to rising feed grain prices
• Manufacturing water supply: Potential medium to long-term constraints on water procurement for production processes at manufacturing facilities in the border regions of both countries
• North American logistics networks: Expected increase in overland transportation costs if disruptions occur in grain transportation via inland waterways

3) Watch points

• Need to track drought intensification through weekly updates from the U.S. Drought Monitor
• Continuous observation required of precipitation patterns and crop condition reports in major agricultural regions of northern Mexico