Optimizing corn trade routes in Mexico using linear programming

Abstract

Corn is one of the most important foods in the diet of Mexicans; there was a sustained growth in imports since the trade opening of Mexico since 1994 with the entry into force of NAFTA; imports have grown to such a degree that, in 2021, Mexico was the world’s second largest importer of corn with 17.4 million tons, only after China. This research aimed to determine the corn transport routes during 2020 through linear programming, minimizing their distances to meet the demands of each destination in two scenarios: a supposed closed economy and the current open economy with global exchanges. The optimal national distribution routes that together imply the shortest transport distances were determined for both scenarios. For the closed economy scenario, seven states of origin and 25 states demanding corn were identified. In the open economy, a total of 49 suppliers were proposed for the same 25 destinations. It was concluded that Mexico is commercially dependent on corn imports for 37% of its total consumption; due to the logistical challenge of minimizing the distances traveled for transportation, obtaining an optimal allocation implies an improvement in social welfare at the country level, easily tangible in the improvement of the final price of corn.