Fernando Ortiz-H,
Ibero-America Business Development Manager, Genesus Inc.

Pork processing and packing plants in Mexico have recently lost interest due to falling prices, which have remained extremely volatile, despite being above their lows at the start of the pandemic in the spring.

The biggest blow to the pork industry has been a consequence of lower domestic consumption of pork and imports of low-cost cuts of American pork.

Producers have not only been faced with a 15% drop in prices over the last year, but also a rise in feed costs. Prices for corn and soybean meal in the US have risen due to late-season weather and a poor harvest.

Currently, most producers are losing money in their pig operations, a situation that has left some companies liquidating some sows and feeling a general slowdown in the Mexican national herd. Even several of the expansion projects that had been managed in previous months have been put on hold. This, theoretically, should help balance the industry supply with weaker demand.

In fact, from the months of August and September 2020, the Mexican pork production began a slowdown, when producers reacted to an evident decrease in profitability. Current production is just 2.2% above the levels of a year ago and below the record for production reported in July. However, Mexican pork production in 2020 has averaged 3.4% above the levels of the previous year, but below initial expectations that projected year-on-year growth of more than 4.5%.


Volatility has also been present in Mexican pork exports, slightly altering the trends shown in previous years in the market. While it is true that there were some increases in exports to China from the July report (+ 562% year-on-year), shipments to Japan (-11% year-on-year) and South Korea (-54%) became weaker. Even with these mixed results, shipments to date remain 56% above year-earlier levels, at 142,000 metric tons, and are becoming a major driver of Mexican pork demand.

One of the repercussions of the weakness of prices in Mexico and new packing plants waiting for obtaining licenses to export to China, the exports will very surely present some deficiency in the supply of pork, producing some disruption in the market through the rest of the year. At the levels currently forecast, exports would represent 18% of the total supply.


The entry of foreign pork into the country has also been volatile, with 14% less in volume according to the latest reported data. US pork imports through July remained static, at the levels of the previous year, while imports from Canada fell 78%, for the same period.

While Mexico’s pork imports from the United States finished lower in both volume (688,253 mt, down 3%) and value ($1.15 billion) compared to 2019, the market showed an impressive rebound late in the year. December imports -from the US- increased 8% to 71,426 mt, the third consecutive month of year-over-year volume growth.

US Meat Export Federation promoting U.S. beef and pork across Mexico.

Categorised in: ,

This post was written by Genesus