Agricultural Sectors

An Expert's View about Agriculture and Animal Husbandry in Mexico

Posted on: 30 Jun 2012

Mexican demand for U.S. agricultural products increased 25% in 2011 with total U.S. exports valued at a record $18.9 billion.

Agricultural Sectors A Top Export Prospect for Mexico June 2012 Overview With a growing population, an expanding economy and an increasingly market-oriented agricultural sector, Mexico remained the United States’ third largest agricultural trading partner in 2011 accounting for nearly 12% of total U.S. agricultural exports. The United States remains Mexico’s principal agricultural trading partner receiving almost 80% of Mexico’s total exports. Specifically, Mexico exported a record $16.5 billion worth of agricultural products to the United States in 2011. Mexican demand for U.S. agricultural products increased 25% in 2011 with total U.S. exports valued at a record $18.9 billion. The U.S. overall market share is not likely to change as the geographic and tariff advantages that are enjoyed in Mexico are likely to continue to make the United States the best import option for most major agricultural goods. U.S. agricultural exports should increase even further in 2012 now that Mexico's imposition of punitive tariffs (applied after the U.S. Government suspended the U.S.- Mexico Cross-Border Trucking Demonstration Project) has been completed removed. Since NAFTA was implemented in 1994, bilateral agricultural trade between the United States and Mexico has expanded dramatically. Mexico’s agricultural exports to the United States have seen, on average, double-digit growth rates per year – growth rates twice as large as before NAFTA. At the same time, U.S. agricultural exports to Mexico have grown at similar rates, reflecting the mutually beneficial outcomes NAFTA has provided to both countries agricultural sectors. The United States’ major agricultural exports to Mexico in 2011 were (in billion U.S. dollars): coarse grains (3.3), red meats (1.9), soybeans (1.7), dairy products (1.2), wheat (1.0), poultry meat (0.85), cotton (0.78), sugar & sweeteners (0.72), feeds & fodder (0.60), soybean meal (.59), processed fruits and vegetables (0.53), and feeds and animal fats (0.53). The following tables summarize the market situation of commonly exported U.S. agricultural products to Mexico: Top US ort ex 2 Exp Prospects in M ico 2012: Agricultural Sectors Dairy Products Table 1. Mexico: Dairy Products (in 1000 Metric Tons) 2010 2011 2012* Total Market Size 1/ 12,018 12,019 12,020 Total Local Production 11,655 11,678 11,679 Total Exports 22 24 24 Total Imports 353 341 341 1/ PSD Post Statistics, Foreign Agricultural Service */ Forecast as of November 2011 Steady growth in dairy (fluid milk, cheese, butter, non-fat dry milk, and dry whole-milk powder) for 2010 through 2012 suggests the economy is recovering, but not as quickly as some members of the Mexican dairy industry would like to witness. Consumer purchasing power continues growing and an increasing number of consumers are capable of paying for high- value food items. In addition, the elimination of retaliatory tariffs on U.S. products due to the resolution of the U.S.-Mexico Cross-Border Trucking Demonstration Project should make some dairy products more affordable to a number of Mexican consumers. Finally, Mexican producers have been hurt by high feed costs, which, presents strong opportunities for U.S. dairy product suppliers. Meat (Beef and Pork) Table 2. Mexico: Meat (Beef and Pork) (in 1000 Metric Tons CWE) 2010 2011 2012* Total Market Size 1/ 3,899 3,910 3,945 Total Local Production 2,916 3,000 3,025 Total Exports 181 295 310 Total Imports 983 910 920 1/ PSD Post Statistics, Foreign Agricultural Service */ Forecast as of October 2011 Mexican red meat consumption is forecast to increase in 2012 as the economy and consumers’ purchasing power continue recovering. Although total pork consumption is greater than beef consumption, pork consumption will increase at a rate lower than that of beef, mostly due to higher prices and the substitution by consumers away from pork towards poultry because it’s perceived as a cheaper and “healthier” protein. In addition, Mexican meat processors will continue to use imported U.S. pork variety meats as well as bone-in cuts because domestic production is not sufficient to meet their demands. Furthermore, U.S. beef exports to Mexico will continue to increase as the Mexican economy recovers and the elimination of retaliatory duties on imported U.S. beef provides additional opportunities. Back to top Top US rt x 3 Expo Prospects in Me ico 2012: Agricultural Sectors Poultry Meat (Chicken and Turkey) Table 3. Mexico: Poultry Meat (Chicken and Turkey) (in 1000 Metric Tons) 2010 2011 2012* Total Market Size 1/ 3,523 3,682 3,691 Total Local Production 2,821 2,932 2,902 Total Exports Total Imports 702 750 789 1/ PS&D Post Statistics, Foreign Agricultural Service */ Forecast as of October 2011 The United States continues to be the largest supplier of poultry products to Mexico. The top three products imported by Mexico are fresh/chilled mechanically deboned chicken meat, fresh/chilled turkey parts, and frozen chicken leg quarters (although imports of poultry products are increasingly diversified). As of February 13, 2012, Mexico was still carrying out an anti-dumping investigation into U.S. exports of chicken leg quarters which could limit growth of this protein export to Mexico. Most of Mexico’s poultry meat imports are used in food manufacturing. The typical Mexican consumer continues to enjoy chicken, turkey, and egg products at competitive prices. Soybeans Table 4. Mexico: Soybeans (in 1000 Metric Tons) 2009/10 2010/11 2011/12 2/ Total Market Size 1/ 3,680 3,711 3,751 Total Local Production 121 168 172 Total Exports 0 0 0 Total Imports 3,523 3,498 3,500 Imports from the U.S.1/ 3,354 3,337 3,300 1/ PSD Post Statistics, Foreign Agricultural Service 2/ FAS/Mexico Forecast Domestic soybean consumption is expected to increase slightly by 25,000 MT in MY 2011/12 to 3.685 million MT, as a result of the moderate increases in feed demand. U.S. soybean exports to Mexico are expected to remain practically unchanged in 2011/12 due to the moderate demand from the domestic poultry sector, which continues to be the major consumer of soybean meal in Mexico. This sector has been adversely impacted by high grain prices caused by the worst drought in over half a century coupled with a cold snap in late 2011 that has devastated cropland in nearly half of Mexico. According to industry sources, it is estimated that feed represents between 75-80 percent of the total cost of broiler production. Soybean oil production in 2011/12 is expected to increase slightly (1.5 percent). Relatively stronger demand in the cooking oil and the hotel, restaurant, and institutional (HRI) sector is Top US rt 4 Expo Prospects in Mexico 2012: Agricultural Sectors driving demand. Moreover, these sources expect that demand from the hotel and institutional sectors could continue growing in the medium term. Moreover, these sources have indicated that with slightly higher disposable incomes, the Mexican market could witness relatively bullish demand for vegetable oils in 2011/12 (mainly in the cooking oil sector). Back to top Fresh Fruits (Apples, Pears, Grapes) Table 5. Mexico: Fresh Fruits (Apples, Pears, Grapes) (in 1000 Metric Tons) 2009/10 2010/11 2011/12 3/ Total Market Size 1/ 1,118 1,173 1,205 Total Local Production 779 824 840 Total Exports (grapes) 128 171 150 Total Imports 339 349 365 Imports from the U.S. 2/ 305 306 331 1/ PSD Post Statistics, Foreign Agricultural Service 2/ World Trade Atlas 3/ Forecast The United States is the largest supplier of apples, pears, and grapes to the Mexican market and this trend should continue. Apple import levels depend heavily on the peso/dollar exchange rate, but the U.S. apple industry has successfully marketed U.S. apples through in- store promotions to retain their dominant market position. The domestic supply of pears is supplied by imports, primarily from the United States, and wholesale markets remain the most important fruit distribution channel for U.S. pears. Mexico is an important market for both U.S. and Chilean grapes. Promotional efforts have increased consumption, creating space for increased imports (70% U.S. origin) and increased domestic production. Resolution of the U.S.-Mexico Cross-Border Trucking Dispute led to the elimination of retaliatory tariffs and is expected to result in increased imports of U.S. apples, pears and grapes. Back to top Best Products/Services In 2011, Mexico imported almost $19 billion worth of U.S. agricultural, fishery, and forestry products – an increase of 25% from the previous year. Exports are expected to increase even higher in 2012 now that Mexico's imposition of punitive tariffs (applied after the U.S. Government suspended the U.S.-Mexico Cross-Border Trucking Demonstration Project) has been completed eliminated. The increase in U.S. exports to Mexico in 2011 has occurred across many product categories, such as coarse grains; red meats; soybeans and products including meal and oil; dairy products; wheat; poultry meat; cotton; sugar and sweeteners; Top US rt x 5 Expo Prospects in Me ico 2012: Agricultural Sectors feeds and fodder; processed fruits and vegetables; animal fats; fresh fruit; snack foods; and rice. Demand for organic food products in Mexico has been growing over the last few years along with the overall trend of healthier eating. Organic foods are perceived by many Mexican consumers to be healthier than conventional foods. Mexico is now considered the second most obese country in the world and the Mexican government has made it a priority to reverse this through education campaigns and new food nutrition laws targeting school children. As a result, a growing number of Mexican consumers are pursuing healthier lifestyles which include better eating habits. This makes Mexico an attractive market for U.S. exporters of organic and other healthy food products. A wine culture is developing in Mexico making this an attractive market for U.S. wine exporters. Market analysts estimate an annual 12% growth rate in consumption in the next few years. Mexico’s transition to more wine consumption over other alcoholic beverages, increased interest among different consumer sectors including women and young adults, and growing interest among consumers in trying novel wines makes Mexico an excellent market for the promotion and sales of U.S. wines Table 6. Mexico: Ag Imports from the United States, in Thousand USD, CY 2008-11 CY 2008 CY 2009 CY 2010 CY 2011 % Change Product Value Value Value Value 2010/2011 Coarse Grains 2,671,239 1,802,236 1,981,679 3,304,134 67 Red Meats, FR/CH/FR 1,513,953 1,550,575 1,611,329 1,846,831 15 Soybeans 1,783,595 1,347,726 1,493,871 1,650,335 10 Dairy Products 928,088 635,474 823,033 1,162,143 41 Wheat 1,028,123 478,446 583,247 1,033,718 77 Poultry Meat 570,954 560,727 665,691 845,782 27 Other Intermediate Products 800,219 828,880 772,183 808,838 5 Cotton 475,253 397,213 608,523 779,047 28 Sugar, Sweeteners, Bev Bases 338,127 317,891 606,910 724,180 19 Feeds & Fodders 402,090 384,373 401,283 592,031 48 Soybean Meal 560,847 528,795 505,439 589,887 17 Other Consumer Oriented 471,457 462,376 505,922 580,118 15 Processed Fruit & Vegetables 465,326 435,451 457,472 532,318 16 Animal Fats 383,557 331,025 421,496 525,095 25 Fresh Fruit 429,907 321,071 377,392 416,847 10 Snack Foods 350,925 326,101 315,147 395,681 26 Top US ects u 6 Export Prosp in Mexico 2012: Agric ltural Sectors CY 2008 CY 2009 CY 2010 CY 2011 % Change Rice 352,978 343,346 310,020 356,554 15 Planting Seeds 222,498 265,923 261,417 258,725 -1 Other Bulk Commodities 193,401 146,476 229,751 245,333 7 Red Meats, Prep/Pres 59,116 121,464 205,869 199,322 -3 Soybean Oil 286,004 162,841 200,612 194,801 -3 Tree Nuts 163,202 132,481 127,519 174,982 37 Panel Products (Incl Plywood) 164,934 140,057 166,848 161,828 -3 Other Value-Added Wood Prod 141,957 104,859 122,279 155,937 28 Fresh Vegetables 171,512 143,591 161,851 132,945 -18 Softwood and Treated Lumber 113,709 94,215 112,154 126,699 13 Tobacco 40,697 88,894 96,099 124,003 29 Wine and Beer 107,433 96,133 102,356 111,747 9 Vegetable Oils (Ex Soybean) 129,146 83,454 107,296 109,143 2 Breakfast Cereals 74,543 89,884 111,123 108,238 -3 Live Animals 120,034 85,226 101,751 101,850 Hides & Skins 92,170 83,533 115,615 98,490 -15 Hardwood Lumber 82,592 67,871 82,779 82,072 -1 Pulses 83,079 137,911 101,238 81,852 -19 Fruit & Vegetable Juices 54,751 51,127 54,783 62,104 13 Peanuts 37,464 49,658 58,318 52,518 -10 Nursery Products 32,251 29,179 28,976 45,241 56 Eggs & Products 26,939 29,604 27,538 42,373 54 Pet Foods 69,456 63,095 39,479 41,264 5 Wheat Flour 17,509 20,293 25,379 38,690 52 Other Edible Fish & Seafood 51,666 43,127 33,719 36,463 8 Logs and Chips 16,716 9,074 4,769 3,871 -19 Salmon Whole or Eviscerated 3,039 1,611 2,079 2,892 39 Crab & Meat 3,651 1,093 1,140 2,025 78 Salmon Canned 1,126 1,152 1,245 1,431 15 Roe & Urchin (Fish Eggs) 809 786 1,596 1,351 -15 Surimi (Fish Paste) 87 0 45 26 -43 18,941,75 TOTAL 16,088,130 13,396,316 15,126,258 6 25 Back to top Top US port n ors 7 Ex Prospects i Mexico 2012: Agricultural Sect Resources The USDA’s Foreign Agricultural Service offices in Mexico, including Agricultural Trade Offices in Mexico City and Monterrey and the Office of Agricultural Affairs at the U.S. Embassy in Mexico City, publish more than 100 publicly accessible market reports annually. The reports can be accessed at: For More Information Please contact Stephen Alley, Deputy Senior Commercial Officer of the U.S. Commercial Service in Mexico at or (11-52-55) 5140-2600. You can also visit our website at The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 70 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. The Commercial Service reference to or inclusion of material by a non-U.S. Government entity in this document is for informational purposes only and does not constitute an endorsement by the Commercial Service of the entity, its materials, or its products or services International copyright, U.S. Department of Commerce, 2012. All rights reserved outside of the United States.
Posted: 30 June 2012

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