Mexico’s Pork Market

Fernando Ortiz –

After two weeks surfing the Mexican pork market, talking with producers and packers, there are some relevant facts that allows us to subtract the following conclusions:

  • Price – The price has kept a sustained rise since 2012, reaching its peak in 2014. After this year the price never returned to the values it exhibited before 2012, and on the contrary, it has been sustained with some attempts to increase. The current price is good and considerably higher compared with the US price.

Some Factors affecting prices 

  • Health issues – Mexico’s swine sector has been facing tremendous health problems over the last few years. Higher mortality of pigs has made a big hole in the market. PED has been a huge factor affecting a huge area of the country since 2014. Areas where PED is causing most damage are: Aguascalientes, Baja California, Colima, Mexico City, Guanajuato, Guerrero, Jalisco, State of Mexico, Michoacan, Morelos, Nuevo Leon, Puebla, Queretaro, Sinaloa, Sonora, Tlaxcala y Veracruz. Shortage of market hogs in the market have made a big impact in hog prices in Mexico.
  • Domestic pork consumption – The consumption of pork in Mexico would continue with a growth trend during 2018. Between 2006 and 2017, the apparent pork domestic consumption increased at an annual average rate of 3.9 percent. It is estimated a consumption of 2 million tons of pork in 2018, or about 15.4 kg per capita per year.
  • Pork Export – During the 2006-2015 period, Mexican pork exports grew at an annual average rate of 8.1 percent. In other words, exports went from 48.2 thousand tons of pork in 2006 to 108,000 tons in 2016. Japan has been the main importer of Mexican pork. Also, Mexico has just received recognition from Japan as a Classical Swine Fever (CSF) free country, which would allow export of pork from all the states of the country. In addition, Mexico continues to promote the development of other export markets in Asia.
  • Production expansion – Because of good prices, greater profitability and higher consumption Mexico’s pork production has increased 5.3% last year, making it the number one country in the world for percentage pork production increase.
  • Pork Import – However, Mexico doesn’t have enough supply to satisfy its own demand, so it continues to import pork, mainly hams and mechanically deboned meat from United States. So, Mexican pork imports are increasing since 2011. During the period 2006-2015 they grew at an average annual rate of 9.4 percent. In 2006 – 321,700 tons were imported, while in 2015, 722,600 tons were imported. Once the combination in exports and imports is generated, these data present a deficit trade balance for the period 2006 to 2016 of 620,000 tons.
  • Genetic Improvement Programs – We observed a tendency from the most advanced producers to modernize their production lines with genetic programs that respond to the new challenges they are facing, like: increased productivity, better growth rate, calmer, stronger animals, and definitely – better meat quality.

Fernando Ortiz, Ibero-America Business Development, Genesus Inc. holding a advertising product that promotes Duroc Pork and Angus Beef from a restaurant in Mexico.

There are some areas in Mexico where Pietrain has dominated for decades, not because of a real demand from the consumer, but because some of the traders in the pork chain are still trying to impose a muscled hog (it’s a visual market) like the best option, although they have no data to support this preference. This lead to the spread on the market of an inefficient pig with awful meat quality – the main reason why pork consumption in Mexico went down in the past.

As it was recently reported by Jim Long, in the Pork Commentaries Newsletter, we were at the Pietrain heartland in one of the best steak and pork restaurant of the area – funny enough they only promote as the best: Angus Beef and Duroc Pork.

As Jim mentioned: “In the heartland of Mexican pig production, the best restaurant features Duroc, not Pietrain. Indeed, we have never seen anywhere in the world Pietrain Pork promoted. Wonder why?”

In Mexico, they have already started promoting Duroc pork, comparing it with Angus Beef, the best beef in the world. Another evidence that “The Other White Meat” era is indeed over.

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This post was written by Genesus