The Post 2012 broiler production forecast is raised slightly from the USDA forecast as vertical integration is supporting production increases.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: MX2012
Poultry and Products Semi-annual
Sector Integration and Strong Demand Continue
The Post 2012 broiler production forecast is raised slightly from the USDA forecast as vertical
integration is supporting production increases in the face of high international grain prices.
Additionally, the Post 2012 import forecast is raised slightly from the USDA forecast as broiler meat
remains one of the most economical forms of animal protein and, at the time of publication, no
restrictions are in place that would limit or increase the price of importing product from the United
Data included in this report is not official USDA data. Official USDA data is available at:
Poultry, Meat, Broiler
The Post forecast of Mexican commercial broiler meat production for 2012 is 2.9 million metric tons
(MMT), slightly higher than the USDA forecast. The trend of vertical integration is the most important
factor supporting production growth. Vertical integration has helped offset the negative impact of high
grain prices that were caused by an exceptional Mexican drought and strong international grain demand
during the last half of 2011 (See GAIN Report MX2005 Intense Drought Lowers Corn, Sorghum, and
Wheat Forecasts). Moreover, the poultry sector is moving towards industrial and commercial
integration to satisfy domestic market and consumer-led demand for affordable and better products. For
example, some poultry manufacturers are supplying marinated and ready-to-cook products. In addition,
a number of poultry companies have started their own retail points of sale.
Even though the poultry sector sourced ample volumes of yellow corn and oilseed meal from
international and domestic markets, demand for these same products from the domestic swine and cattle
sectors has led to increased competition and higher feed costs. According to information from the Trust
Funds for Rural Development (FIRA), it is estimated that feed represents between 75-80 percent of the
total cost of broiler production. In 2011 the nationwide average cost of broiler production ranged
between 13 to 18.2 pesos per kilogram (U.S. $0.47 to 0.66 per pound ).
Mexico?s average broiler grow-out period depends largely on where and how the birds will be
marketed. Live birds and whole chickens (New York dressed) that are commonly sold in wet markets
average between 49 and 56 days (7 to 8 weeks) for grow-out. Birds for the ready-to-cook broiler market
have an average grow-out period of between 40 and 44 days (6 weeks). Birds for sale in modern retail
markets (both ready to cook and chicken cuts) are grown-out in 44 to 49 days (6 to 7 weeks).
The average market weight for broilers is around 2.2 kilograms, but as with bird grow-out periods, it
depends on the requirements of the market destination. Typically, live birds and whole chickens are
marketed at heavier weights (2.9 kilograms) while broilers for retail, cut in pieces, and for rotisseries
shops are marketed at lighter weights (2.1, 2.2 & 1.8 kilograms, respectively).
Despite the production of poultry in Mexico being on the upswing, it is not expected to keep pace with
the domestic consumption rate.
 2011 Average exchange rate: MX $12.57pesos per USD $1.00. Source: Banco de Mexico.
MX2012 Poultry and Products Semi-Annual Page 2
The Post 2012 consumption forecast anticipates slightly higher consumption from the USDA forecast as
consumer demand remains strong. Poultry meat, specifically ?dark meat? (e.g. chicken leg quarters ?
CLQs) is preferred and consumed in higher volumes among low-income households while other high-
value cuts and added-value products are consumed by middle and upper income consumers.
Historically, the demand for broiler meat has been income elastic and has been one of the most
affordable animal protein sources (behind eggs) for low-income consumers. Even though domestic
broiler meat prices have increased 20 percent during the first part of 2012, prices for pork and beef have
also been increasing and, as such, consumption of poultry meat will stable. During the last quarter of
2011 (Oct-Dec), the price difference between whole fresh chicken 21.5 pesos per kilogram (U.S. $0.76
per lb.) and beef 38.6 pesos per kilogram (non-fine cuts at U.S. $1.37 per lb.  ) continued favoring
poultry. During this same period, private sector data indicates that 31 percent of broiler sales were
accounted for by live chickens, 24 percent was marketed in roasting establishments, 20 percent was
distributed in public markets, 15 percent was marketed in chain stores, 7 percent was in pieces/cuts, and
3 percent of sales were as value-added products. The entire 2012 forecast anticipates similar patterns
with a possible slight rise in live chicken sales to 33 percent of total broiler sales.
Exchange rate at MX $12.68 per USD $1.00
The Post 2012 import forecast is 630,000 MT, which is slightly higher than the USDA forecast. As
indicated earlier, production increases are not capable of keeping up with demand increases; especially
among lower-income consumers. Thus, Mexico is expected to continue importing as supply has not
been able to fulfill demand and poultry remains a low-cost protein source for large portions of the
The Post final, preliminary and forecast for 2010, 2011 and 2012 exports, respectively, have been
revised downward from USDA data to reflect the removal of certain chicken parts not considered
broiler meat that manifest in Mexico?s export trade statistics. In particular, the Post figures reduce trade
volumes for exports to Vietnam, Hong Kong, and other Asian markets which, according to industry
sources, most likely are chicken paws.
Thus, the Post new 2012 export forecast is 9,000 MT, which is significantly lower than the USDA
forecast. Mexico continues, however, to aggressively target other markets located in Asia and Central
America as areas to market product; including high-value processed products and other lower-value cuts
of broiler meat.
The final resolution on the CLQ anti-dumping case will be a key factor as to whether imports increase
as Post forecasts. At this point it is uncertain when the final resolution will be published, but on January
19, 2012, the Secretariat of Economy (SE) announced in the Diario Oficial (Mexico?s Federal Register)
its preliminary determination to the anti-dumping investigation of U.S. fresh, chilled or frozen CLQs.
As of March 20, 2012, SE has not imposed any compensatory duties on U.S. fresh, chilled or frozen
CLQs exported to Mexico. (See GAIN Report MX2004 Mexico Publishes Preliminary Determination
on U.S. CLQs)
MX2012 Poultry and Products Semi-Annual Page 3
Sources indicate that limiting or imposing restrictions on the import of CLQs would result in a supply
shortage in some regions of the country. More specifically, the areas that would feel any restriction
would most likely be in areas near the northern Mexican border that are not supplied by domestic
The Mexican poultry sector, in conjunction with the Mexican zoosanitary authorities, is working to
obtain U.S. recognition of more Mexican areas as being free of Avian influenza and Exotic Newcastle
Disease. The reported objective is wider access for Mexican poultry products to the U.S. market.
On December 1, 2011, the Mexican government officially informed the USDA that it had lifted the
import ban imposed on live poultry, poultry products, and by-products from Polk County, Missouri. At
this time, Mexico does not maintain any bans on poultry and related products from the United States.
Even though demand is growing for healthy and processed products, there is substantial room for
progress as shopping practices suggest consumer preference is for whole fresh chickens which include
viscera and offal. The sales and consumption trend witnessed during that last quarter of 2011 indicates
that consumer demand is particularly strong during the holiday season as this habit is fueled by culture
and family tradition.
Production, Supply and Demand Data Statistics:
B 2010 2011 2012 roiler Mexico
Market Year Begin: Market Year Begin: Market Year Begin:
Jan 2010 Jan 2011 Jan 2012
USDA New USDA New USDA New
Official Post Official Post Official Post
MX2012 Poultry and Products Semi-Annual Page 4
Inventory 0 0 0 0 0 0
Slaughter 0 0 0 0 0 0
Beginning Stocks 0 0 0 0 0 0
Production 2,810 2,822 2,922 2,900 2,892 2,900
Total Imports 549 549 590 590 625 630
Total Supply 3,359 3,371 3,512 3,490 3,517 3,530
Total Exports 14 7 20 8 23 9
Human Consumption 3,345 3,364 3,492 3,482 3,494 3,521
Other Use, Losses 0 0 0 0 0 0
Total Dom. 3,345 3,364 3,492 3,482 3,494 3,521
Total Use 3,359 3,371 3,512 3,490 3,517 3,530
Ending Stocks 0 0 0 0 0 0
Total Distribution 3,359 3,371 3,512 3,490 3,517 3,530
MIL HEAD, 1000 MT, PERCENT, PEOPLE, KG
Not Official USDA Data
For More Information
FAS/Mexico Web Site: We are available at www.mexico-usda.com or visit the FAS headquarters'
home page at www.fas.usda.gov for a complete selection of FAS worldwide agricultural reporting.
Other Relevant Reports Submitted by FAS/Mexico:
Report Subject Date
MX2004 Mexico Publishes Preliminary Determination on U.S. CLQs 1/20/2012
MX2005 January 2012 Grain and Feed Update: Intense Drought Lowers Corn, 1/27/2012
Sorghum, and Wheat Forecasts
MX1092 New Meat and Poultry Letterhead Certificates Required 12/6/2011
MX1090 Mexico Lifts Ban on Poultry from Polk County, Missouri 12/5/2011
MX1013 Poultry and Products Semi-Annual 2/14/2011
MX1009 Mexico Initiates an Antidumping Investigation on U.S. CLQs 2/8/2011
Useful Mexican Web Sites: Mexico's equivalent to the U.S. Department of Agriculture (SAGARPA)
can be found at www.sagarpa.gob.mx, equivalent to the U.S. Department of Commerce (SE) can be
found at www.economia.gob.mx and equivalent to the U.S. Food and Drug Administration (SALUD)
can be found at www.salud.gob.mx. These web sites are mentioned for the readers' convenience but
USDA does NOT in any way endorse, guarantee the accuracy of, or necessarily concur with, the
information contained on the mentioned sites.
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