Cheap feed and labour have increased Mexican pig production
Favoured by cheap feed and low labour costs, but also by improved genetics and tighter disease control, Mexico's pig production has increased during the last couple of years. Nevertheless, the domestic demand has followed the trend, with an average rate of growth in consumption of 4% during 2005-2016, according to the latest Genesus Global Market Report signed by Fernando Ortiz, Ibero America Business Development at Genesus Inc.
"The domestic industry has been unable to meet this growing demand with production growth only averaging 2% per year based on data from USDA. As a result, increasing imports are having to offset the production deficit.
Mexico is a large consumer market with a population of 120+ million. Per capita consumption averages 19 kg and pork is consumed on a daily basis in a variety of dishes either as fresh or as processed, especially hams", explained Mr Ortiz.
Seen as a lower cost alternative to beef and competing in price with chicken, pork continues to gain consumer confidence as a healthy source of protein.
"Mexico is the fourth largest global importer of chilled and frozen pork after China, Japan and Italy. Since 2005 import volumes have grown by 9% per annum and there was a further growth of 19% in the first quarter of 2017. Trade is dominated by the United States that accounted for 85% of the total in the last two years although its share has been over 90%. The only other significant supplier is Canada. Mexican imports are dominated by chilled bone-in hams and shoulders that account for 75% of the total. Frozen boneless cuts account for a further 15% and are used in further processing. Imports include mechanically deboned meat (MDM).
From an American perspective, while the new Free Trade Agreement was an important step forward, it’s only the first step. The U.S. pork industry is still dealing with 20% retaliatory duties for the product going into Mexico", said the report.
"Mexico exhibits a strong demand for U.S. hams. On the other hand, EU pork exports also surged to Mexico and are expected to continue gaining momentum as Spain, Denmark and Germany take advantage of Mexico’s recently implemented duty-free pork quota,", added Fernando Ortiz.
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