Fluid Milk Supply Lags Behind Processing

An Expert's View about Food , Beverages and Tobacco in Mexico

Last updated: 30 May 2011

Fluid milk production will be lower than expected but higher than in 2010, resulting in larger production of cheese and butter as well as higher imports of dairy raw materials.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 5/9/2011 GAIN Report Number: MX1038 Mexico Dairy and Products Semi-annual Fluid Milk Supply Lags Behind Processing Demand Approved By: Allan Mustard Prepared By: Zaida San Juan and Carlos Gonzalez Report Highlights: Fluid milk production will be lower than expected but higher than in 2010, resulting in larger production of cheese and butter as well as higher imports of dairy raw materials. The economic recovery will support higher consumption of value-added products as well as higher U.S. exports of cheese, butter and NFDM to Mexico. However, total Mexican dairy imports will decline due to reduced purchases of whole powdered milk and butterfat. NFDM consumption will remain unchanged. Executive Summary: Total fluid milk production is revised downward due to higher production costs, adverse weather conditions, and lower-than-expected cows in milk. However, the recovery in consumer purchasing power is resulting in the substitution of fluid milk with value-added products such as cheese and yogurt among low and middle-income consumers. Higher cheese production is expected for 2011 and, even with retaliatory duties on U.S. cheese exports to Mexico (due to the trucking dispute), increased cheese imports as well as a growing U.S. share in the Mexican market are anticipated. Lower total imports of butter (and butterfat) by the baking and confectionary industry are expected due high butterfat prices, which will force the industry to substitute other raw materials. However, U.S. butterfat exports to Mexico will increase and the United States will continue being the second-largest supplier of butter to Mexico. For 2011 production, consumption and imports of non-fat dry milk (NFDM) are expected to maintain the same levels as 2010 due to the increasing demand for fluid milk to produce other dairy products and to the growing use of domestic fluid milk by LICONSA. [1] On the other hand, whole powdered milk (WPM) production, consumption and imports for 2011 will decrease. Production will decrease mainly because of a reduction in the domestic oversupply of dry milk and WPM consumption will drop due to consumer preference for fluid milk and processed dairy products. Last, lower powdered milk imports are expected because WPM has been replaced with value-added and low fat products. Inclusion of the dairy sector is still under discussion in talks on the Mexico-Peru free trade agreement. Meanwhile, some dairy products were excluded in negotiations of the free trade between Mexico and Colombia. Data included in this report are not official USDA data. Official USDA data are available at: http://www.fas.usda.gov/psd [1] Liconsa, S. A. de C.V. is ?a state-owned company devoted to the industrialization and distribution of high-quality milk at a reasonable price, whose main purpose is supporting the nutritional resources of disadvantaged families to contribute to human capital development.? Commodities: Dairy, Milk, Fluid Production: The forecast for total fluid milk production in 2011 is revised down 1.5 percent, 167 thousand metric tons (TMT) lower than official USDA estimates, based on a higher cost of production as compared to the expected price paid to producers and adverse weather conditions. According to the dairy processing industry, milk production costs are increasing mainly due to high feed and energy prices. For example, in the second week of April 2011 yellow corn prices had increased 120 percent as compared to the same week in 2010. Also, the lack of early rains in almost all of Mexico and the expected droughts in Coahuila, Durango, Chihuahua, and Jalisco will slightly decrease milk production for two reasons: grass supplies for both greenchop and hay will be reduced, and the better milk yields typical of the rainy season will be delayed, principally among small and medium-sized producers. Production in the four states mentioned above represents almost 50 percent of total domestic fluid milk. Another factor is that, in response to producers? requests that LICONSA pay a 20 percent increase in the fluid milk price per liter (to 5.6 pesos per liter), LICONSA agreed to only an estimated 7 percent increase (5 pesos or USD 0.42 per liter). This new price should be in place from April to the end of 2011 and available to small and medium-sized milk producers. As previously reported, the price paid by LICONSA is used as the domestic reference price, similar to the U.S. type I milk price. Cows-in-milk estimates for 2011and 2010 are revised downward 1.5 and 1.2 percent, respectively, from official USDA data mainly due to a reduction in producer numbers and in live animal imports. Even though the worst of the recent economic crisis has passed, some small and medium-sized producers have left the dairy business, reducing the expected rise in cow inventories. In addition, milk producers´ efforts to improve yields through better breeding are lower than previously expected. During the first two months of 2011, Mexico imported 86 percent fewer breeding animals and 55 percent fewer milk cows than during the same period in 2010. In addition, small and medium-sized dairies continue to face financial problems due to high production costs and low productivity. Relatively low domestic raw milk prices and a lack of affordable financing for capital improvements have discouraged small and medium-sized dairy farms from expanding, particularly in central and southern Mexico. The estimates for total fluid milk production are revised 1.2 percent downward from official USDA data based on official data obtained from the Food and Fisheries Statistics Service (SIAP). Official sources stated that this revision is the result of some small producers going out of business due to the economic crisis. This reduction also resulted in a lower-than-expected cows-in-milk figure for 2010, which was also revised 1.2 percent lower than official USDA data. Fluid milk production and cows-in-milk data remain unchanged for 2009. Consumption: The new 2011 estimate of total fluid milk consumption is revised slightly downward as low and middle- income consumers have begun substituting the consumption of fluid milk with more expensive and value-added products, such as cheese and yogurt, as a source of dairy protein in their diets. This shift in preferences is made possible by the recovery in consumer buying power. Total fluid milk consumption for 2010 is revised slightly downward from official USDA data, principally due to a reduction in the consumption of specialized fluid milk, such as partially skimmed, skimmed, nonfat, and flavored milk (including small cartons for children). Based on newly available information, new estimates beginning in 2009 have been revised sharply upward for fluid use domestic consumption and downward for factory use domestic consumption. This revision was undertaken because the components of each item were reshuffled. Much of what was previously captured as factory use is now included as fluid milk. However, overall consumption has not changed significantly. Fluid use domestic consumption estimates for 2011, 2010 and 2009 include fluid milk sold to big companies (e.g., Lala, Alpura, etc.) to produce pasteurized and shelf stable (UHT) fluid milk in different product lines (non-fat, low fat, whole, flavored, etc.) as well as the total fluid fresh milk sold directly by producers every day without refrigeration or industrial treatment, mainly to households and artisanal cheese producers. For example, the 2010 fluid milk domestic consumption estimate includes 370 million liters of milk sold to households and small cheese producers, 697 million liters to LICONSA, and 4.1 billion liters to big companies to produce UHT and HT milk. Factory use domestic consumption estimates for 2011, 2010 and 2009 are revised downward (because they no longer consider the fluid milk sold by big companies (now included in fluid use domestic consumption) and only focus on milk that is processed into another form (e.g., butter, cheese, yogurt, NFDM, etc.). According to industry sources? estimates, approximately 7 percent of milk is consumed raw (a health concern) and 14 percent is consumed through the government?s social programs. It is important to note that LICONSA?s use of imported powdered milk has decreased significantly in the last 10 years. Consumption of UHT and pasteurized milk accounts for 80 percent of total fluid milk consumption. Prices During the first quarter of 2011 LICONSA was paying the congressionally mandated minimum price of 4.40 pesos per liter (USD 0.37) to producers plus an additional 0.30 peso-per-liter premium for quality. However, due to continued pressure from producers and congress, LICONSA is starting to pay producers 4.70 pesos per liter (USD 0.40) plus an additional 0.30 peso-per-liter quality premium for a total price of 5 pesos (USD 0.42), which will likely be in effect for the remainder of the year. Although milk production costs are increasing slightly due to higher grain prices, these costs will not be completely transferred to the consumer since milk processors are aware that the consumption of fluid milk remains stable only if prices do not increase more than 3 percent. Due to the economic crisis of 2010 some consumers preferred consuming whole fluid milk and pasteurized milk only, since it was cheaper than specialized fluid milk and UHT milk (see figures 2 and 3). Trade: For 2011, the new fluid milk import forecast is revised 6.5 percent downward from official USDA data to 43 TMT due to increased consumption of other processed dairy products versus fluid milk, and higher sales of domestically produced fluid milk. For 2010, import figures are revised downward reflecting official data due to the effects of the economic crisis on consumer purchasing power as well as higher sales of domestically produced fluid milk when compared to the previous year. As in previous years, most fluid milk imports are intended for the northern border cities of Mexico. Opportunities for sales beyond the northern border cities are limited by transportation costs and cold chain infrastructure constraints. For 2009, the import estimate remains unchanged and reflects official data. According to the Mexican dairy industry, the Mexican dairy supply is about 71 percent domestic fluid milk, with the other 29 percent composed of imported dairy products (fluid milk basis). For 2011, the fluid milk export estimate is revised downward from official USDA data to 10 TMT due to relatively high Mexican fluid milk prices and the burdensome registration process for new companies to be certified export eligible. For 2010 and 2009, the export figures are unchanged. Table 1. Mexico: Percentage of Domestic Fluid Milk versus Milk- Equivalent Imported Dairy Products. Year Domestic Imported 2005 66% 34% 2006 73% 27% 2007 68% 32% 2008 71% 29% 2009 71% 29% 2010 72% 28% Source: CANILEC Production, Supply and Demand Data Statistics: Dairy, Milk, Fluid Mexico 2009 2010 2011 Market Year Begin: Jan 2009 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 USDA Official New Post USDA Official New Post USDA Official New Post Cows In Milk 6,400 6,400 6,560 6,480 6,650 6,550 Cows Milk Production 10,866 10,866 11,176 11,033 11,330 11,163 Other Milk Production 170 170 166 168 170 170 Total Production 11,036 11,036 11,342 11,201 11,500 11,333 Other Imports 45 45 46 41 46 43 Total Imports 45 45 46 41 46 43 Total Supply 11,081 11,081 11,388 11,242 11,546 11,376 Other Exports 5 5 9 9 11 10 Total Exports 5 5 9 9 11 10 Fluid Use Dom. Consum. 2,021 5,206 2,276 5,167 2,307 5,115 Factory Use Consum. 9,055 5,870 9,103 6,066 9,228 6,251 Feed Use Dom. Consum. 0 0 0 0 0 0 Total Dom. Consumption 11,076 11,076 11,379 11,233 11,535 11,366 Total Distribution 11,081 11,081 11,388 11,242 11,546 11,376 1000 HEAD, 1000 MT Commodities: Dairy, Cheese Production: The cheese production forecast for 2011 is revised 8 percent upward from official USDA data due to the increased availability of raw materials for its production (both imported and domestic) and a better-than- expected recovery of consumer purchasing power. Due to rain in the last quarter of 2010 and the subsequent unexpected increased in fluid milk availability, 2010 cheese production was higher than anticipated. Thus, it is revised upward by 8.2 percent to reflect official data. However, it should be noted that the uptick in fluid milk production due to the late season rains did not make up for the decreased production early on. Cheese production for 2009 remains unchanged. Consumption: After a drop-off in cheese consumption due to the economic crisis, cheese consumption (mainly panela, a fresh white cheese) has rebounded among low and medium-income families. Likewise, cheese consumption for 2011 and 2010 is revised upward by 9 and 6 percent, respectively, from official USDA data. In addition, lifestyle changes are increasing cheese consumption because it easily complements prepared foods for breakfast and lunch. In general, the consumption of processed products containing cheese increases as consumer purchasing power grows. Cheese consumption for 2009 remains unchanged. Trade: Total Mexican cheese imports for 2011 are revised 12.5 percent upward from official USDA data as consumers continue to demonstrate a preference for non-Mexican cheeses. The Mexican industry has taken note of this growing preference, which is reflected in its increased demand for specific cheeses (i.e., those for prepared pizzas). Mexico?s economic recovery is expected to continue to foster consumer demand for imported cheeses. Although the Mexican Government (GOM) imposed retaliatory duties on U.S. cheese exports to Mexico, the U.S. share of total Mexican cheese imports is increasing and will reach over 65 percent of imports in 2011. Total Mexican cheese imports in 2010 remain unchanged; however, they reflect a 21.6 percent increase in cheese imports from the United States while those from other countries declined by 6.6 percent. Cheese imports for 2009 remain unchanged. Production, Supply and Demand Data Statistics: Dairy, Cheese Mexico 2009 2010 2011 Market Year Begin: Jan 2009 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 0 0 0 0 0 0 Production 242 242 244 264 247 267 Other Imports 73 73 80 80 80 90 Total Imports 73 73 80 80 80 90 Total Supply 315 315 324 344 327 357 Other Exports 4 4 5 6 6 7 Total Exports 4 4 5 6 6 7 Human Dom. Consumption 311 311 319 338 321 350 Other Use, Losses 0 0 0 0 0 0 Total Dom. Consumption 311 311 319 338 321 350 Total Use 315 315 324 344 327 357 Ending Stocks 0 0 0 0 0 0 Total Distribution 315 315 324 344 327 357 1000 MT Commodities: Dairy, Butter Production: Statistics for butter and butterfat production are combined in the PS&D table [1] . The new butter (and butterfat) production estimate for 2011 is revised 6.9 percent upward from the official USDA data due to an expected increase in fluid milk output as compared to 2010 and to improved profits for processors resulting from higher international butterfat prices (due to decreased worldwide production). The 2010 butter production estimate is revised upward due to higher prices and reflects official data. Production for 2009 remains unchanged. [1] Butter import data includes butter and butter oil (HS codes 0405.1001, 0405.1099, 0405.9001, and 04059099). Butter oil imports are reported in butterfat equivalent (1 kg butter oil equals 1.25 butterfat). Consumption: Combined butter and butterfat consumption is estimated to remain unchanged from official USDA data for 2011. The estimate for 2010 is revised upward reflecting increased usage of butterfat in the baking, confectionary and food processing (principally ice-cream) industry. Consistent with past years, no stocks are estimated due to the lack of refrigerated storage space among producers and end users. Users such as bakeries and food processors do not keep large stocks of butter. Trade: Butter imports for 2011 are revised downward by 27 percent from official USDA data to 35 TMT. This revision is based on higher production and lower butterfat imports by the baking and confectionary sector due to the large availability of substitute raw materials to be used instead of (currently) higher- priced butterfat. In addition the increasing demand for light products is reducing the use of dairy fat in the industry. Although total butter imports have declined since 2009, principally due to a reduction in imports from New Zealand, U.S. butter exports to Mexico are increasing in volume and maintaining their share of total imports. The United States will continue to be the second supplier of butter to Mexico (about 12 percent for Jan-Feb 2011, up from 8 percent the previous year) after New Zealand (74 percent of total imports, down from 87 percent the previous year). Total imports for 2010 were revised almost 9 percent upward from official USDA data due to a better-than-expected economic recovery. Total imports for 2009 are revised upward to coincide w ®ith Global Trade Atlas information. Production, Supply and Demand Data Statistics: Dairy, Butter Mexico 2009 2010 2011 Market Year Begin: Jan 2009 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 0 0 0 0 0 0 Production 171 171 173 182 175 187 Other Imports 53 74 45 49 48 35 Total Imports 53 74 45 49 48 35 Total Supply 224 245 218 231 223 222 Other Exports 0 0 0 0 0 0 Total Exports 0 0 0 0 0 0 Domestic Consumption 224 245 218 231 223 222 Total Use 224 245 218 231 223 222 Ending Stocks 0 0 0 0 0 0 Total Distribution 224 245 218 231 223 222 1000 MT Author Defined: POWDERED MILK In the past, production of whole milk powder (WMP) and non-fat dry milk (NFDM) were both included in the NFDM PSD table. However, from now on, they will be reported in separate PSD tables. Thus, new Post NFDM data reflect a big drop when compared to the official USDA data, and WMP data do not have previous official USDA data for comparison. For this reason, the following analysis will focus on year-to-year changes rather than the differences between official USDA data and the new Post estimates. In addition, production of NFDM and WPM does not include infant formula, which was previously included. PSD tables include trade data for the following HTS codes: 0402.10 (Non-fat dry milk) and 0402.21 and 0402.29 (whole milk). Commodities: Dairy, Milk, Nonfat Dry Production: Production of NFDM for 2011 is expected to remain at the same level as 2010 due to increasing demand for fluid milk for production of other dairy products. The production of NFDM is more expensive than WPM and it is produced only when there is seasonal overproduction. In addition the lack of facilities to dry milk is a limitation. According to dairy contacts, only seven companies have such facilities. The preliminary output for 2010 (13 TMT) is 48 percent lower than that registered in 2009 (25 TMT) due to reduced availability of fluid milk (because of increasing sales to LICONSA). Overall production capacity is limited, which is why imports are required to meet demand. However, Mexico?s milk powder producers may be able to marginally increase production. Consumption: Consumption for 2011 is forecast to remain unchanged from the previous year?s estimate. The principal consumers of NFDM are the dairy processors (who reconstitute it and sell it as pasteurized or UHT milk) and the confectionary industry. Trade: Mexico?s imports of NFDM are not expected to grow in 2011 due to reduced LICONSA NFDM imports; however, imports will not decrease due to Mexico?s continued reliance on imports (principally powdered milk) since domestic production is insufficient to meet overall demand. In fact, the Secretariat of Economy (SE) announced in December 2010 TRQs for milk powder (and dairy blends) for 2011 (see Policy section). Imports for 2010 registered a reduction of 6 percent when compared to 2009 levels according to the Global Trade Atlas®. Stocks: LICONSA used to be the main owner of milk powder stocks. Due to pressure from producers in recent years, however, LICONSA purchased fluid milk, thereby reducing consumption of NFDM. Moreover, this shift towards fluid milk led LICONSA to decide no longer to stock NFDM since it was no longer the principal ingredient in its product. LICONSA has also started producing UHT and pasteurized milk with domestically produced fluid milk because of the benefits of shelf stability and its competitive pricing as compared to its national competitors, which benefits its broader mission. Production, Supply and Demand Data Statistics: Dairy, Milk, Nonfat Dry Mexico 2009 2010 2011 Market Year Begin: Jan 2009 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 20 20 20 0 20 0 Production 279 25 290 13 300 13 Other Imports 187 165 145 155 155 155 Total Imports 187 165 145 155 155 155 Total Supply 486 210 455 168 475 168 Other Exports 5 0 7 0 8 0 Total Exports 5 0 7 0 8 0 Human Dom. Consumption 461 210 428 168 447 168 Other Use, Losses 0 0 0 0 0 0 Total Dom. Consumption 461 210 428 168 447 168 Total Use 466 210 435 168 455 168 Ending Stocks 20 0 20 0 20 0 Total Distribution 486 210 455 168 475 168 1000 MT Commodities: Dairy, Dry Whole Milk Powder Production: Powdered milk production for 2011 will decrease marginally because increasing LICONSA purchases of domestic fluid milk will reduce the traditional domestic oversupply that feeds WPM production. As previously stated, in Mexico the production of powdered milk depends on the availability of fluid milk. Normally, powdered milk production increases when there is a large quantity or overproduction of fluid milk; however, no such increase in WPM production is expected for 2011. Post?s PS&D production data for 2010 and 2009 reflect an estimated 100 percent of production of powdered milk but are based on official National Institute of Statistics and Geography (INEGI) data, which only report roughly 80 percent of the actual total. Consumption: WPM consumption for 2011 and 2010 is forecast to decline by 4.4 and 2.2 percent, respectively, as compared to the previous years. This is driven by the recovery of consumer income, which allows consumers to buy fluid milk and processed dairy products instead of WPM which will not fully offset rising demand for processing. Trade: For 2011, imports are forecast to decrease by 33 percent. This is partly due to decreased demand for WPM due to a shift towards value-added products and reduced demand for dairy fat. Imports from all origins will decrease, principally for the primary supplier (New Zealand). Likewise, for 2010, the WPM also showed a decrease of 44 percent from the prior year. Total import figures for 2010 and 2009 are based on Global Tr ®ade Atlas data. Import levels reflect a growing demand for dairy products other than WPM in 2010 and lower consumer consumption of WPM due to the economic recovery in 2011. Production, Supply and Demand Data Statistics: Dairy, Dry Whole Milk Powder Mexico 2009 2010 2011 Market Year Begin: Jan 2009 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 0 0 Production 164 173 170 Other Imports 27 15 10 Total Imports 27 15 10 Total Supply 191 188 180 Other Exports 6 7 7 Total Exports 6 7 7 Human Dom. Consumption 185 181 173 Other Use, Losses 0 0 0 Total Dom. Consumption 185 181 173 Total Use 191 188 180 Ending Stocks 0 0 0 Total Distribution 191 188 180 1000 MT Table 3. Mexico: 2000-2010 Powdered Milk Production (thousand metric tons) Year Whole Infant formula NFDM 2000 148 41 15 2001 138 41 14 2002 142 38 13 2003 145 44 13 2004 160 54 6 2005 166 52 10 2006 174 65 18 2007 182 77 18 2008 168 86 24 2009 164 85 25 2010 1/ 173 93 13 Source: Developed from SIAP (The Food and Fisheries Statistics Service) data and information from industry sources. Author Defined: Infant formula If the present trend of population growth is maintained (1.8 percent for 2010 according to INEGI), infant formula production will increase; however, it also depends on the economic situation, which might force families to replace infant formula with fluid milk if economic conditions worsen. According to some contacts, the principal powdered milk producer in Mexico is Nestle, which manufactures about 97 percent of whole dry milk- and non-fat dry milk production and 60 percent of infant formula. [1] NOM-155-SCFI-2003 Milk, lacteal formula and combined dairy products. Denomination, chemical-physical specifications, commercial information and test methodologies. [2] According to Tetra Pak, milk formula prices are between 15 to 20 percent cheaper than milk. Commodities: Dairy, Milk, Fluid Dairy, Cheese Dairy, Butter Dairy, Milk, Nonfat Dry Dairy, Dry Whole Milk Powder Policy: Mexico is negotiating two free trade agreements (FTAs) with Colombia and Peru. All provisions with Colombia have been approved by the Mexican congress, but those with Peru are still being negotiated. Some dairy products will be included in the FTA with Colombia, and others may be included in the Peru FTA. All details will be reported in a separate report once each agreement is officially published in the Mexican Federal Register (Diario Oficial). Mexican milk producers, mainly small and medium-sized, are presenting proposals and working with congress and the Secretariat of Economy (SE) to obtain a congressional decision forcing LICONSA to pay a higher price per liter for milk (more than the 5 pesos already announced by LICONSA). In addition, SE will continue working to revise NOM-155 [1] , a federal regulation governing dairy products, and reinforce its application, in part because producers have complained that certain dairy products not currently regulated by NOM-155 should be exempt since they do not fit the product description in the NOM. These kinds of products are primarily made with certain dairy imports (including caseins, whey and powdered milk). Producers state that milk formula products compete with and displace fluid milk due to lower prices, but deceive the consumer about the quality of milk protein they contain. Producer pressure may result in the imposition of restrictions against milk formula in the medium term but, until such restrictions are in place, they will continue to be purchased because they provide a cheaper [2] milk protein source for poor Mexican consumers who wish to include dairy protein in their diets. Thus, for low-income consumers, price is and will continue to be the driver for consuming milk formula instead of milk. According to Tetra Pak, lacteal formulations account for 25 percent of the fluid milk market. The development of a new, larger milk carton is mainly due to an increased demand for specialized milk among older people, lifestyle changes, and growth in medium-income families. However, according to Tetra Pak, specialized milk represents a small part of the total fluid milk sales (lower than 10 percent). All U.S. exports of dairy products to Mexico enter duty-free. In addition, in an effort to meet the demand for dairy products, the GOM opened a TRQ for importing powdered milk at zero duty. (See GAIN reports MX0096 and MX0095.) LICONSA, the parastatal company charged with distributing milk to the poor at subsidized prices, purchases fluid milk from smaller producers at prices mandated by congress. In 2010, LICONSA purchased approximately 698 million liters of milk. LICONSA is expected to purchase approximately 800 million liters in 2011. LICONSA pays 5 pesos (U.S. $0.42) per liter to domestic producers. This price usually represents a maximum, and LICONSA may pay less depending on the quality of the milk and distance from the collection center. In addition, Mexico is seeking market access for Grade A fluid milk in the United States. The information contained in the following links should help any Mexican company interested in exporting grade A milk to the United States to understand the permitting process for export. Register with FDA Milk Safety Information Milk Inspections Interstate Milk Shippers List Marketing: The cooperator group that represents the U.S. dairy industry in foreign markets is the U.S. Dairy Export Council (USDEC). In addition, the Agricultural Trade Office (ATO) in Mexico also promotes U.S. dairy exports to Mexico. Both the ATO and the Office of Agricultural Affairs staff in Mexico City provide information on all aspects affecting U.S. dairy product trade, including market intelligence on trade policy issues, organizing informational seminars for the Mexican trade, and developing promotion and sales opportunities for U.S. dairy products in the Mexican market. USDEC also organizes buying missions for potential Mexican importers/distributors to visit U.S. dairy processing plants so they can meet U.S. suppliers. The ATO in Mexico will participate in the following trade shows to promote U.S. exports in 2011: Alimentaria Show (Mexico City, 31 May-2 June), Expohotel 2011 (Cancun, 15-17 June) and ABASTUR 2011 (Mexico City, 20-22 Sep). Mexico is expected to continue as a significant importer of dairy products to augment domestic production. While imports are likely to consist primarily of bulk products such as NFDM, higher-value products such as specialty cheeses and ice creams are finding a home in Mexico as income, tastes, preferences, and shopping habits increasingly mirror those of the United States and Europe. For further information direct your questions to: US Dairy Export Council (USDEC) Calle Regules No. 2, Int. 3, Esquina Madero Col. Centro Queretaro, Queretaro Phone 011-(422) 215-9613 and 215-9552 Phone Mexico City 011-52 (55) 5119 0476. http://www.usdec.org U.S. Agricultural Trade Office (ATO) Liverpool # 31 06000 Mexico City Ph. (52-55) 5140-2614, 5140-2671 Fax (52-55) 5535-8557 atomexico@fas.usda.gov www.mexico-usda.com Garth Thorburn, Director Author Defined: 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. FAS/Mexico YouTube Channel: Catch the latest videos of FAS Mexico at work http://www.youtube.com/user/ATOMexicoCity Report Subject Date Number Submitted MX1030 Mexico Postpones the Implementation of Traceability Regulations 04/15/11 MX1511 UPDATE - Simplified Labeling Procedures in Mexico's Border Areas 03/31/11 MX1021 Livestock and Products Semi-annual 03/17/11 MX1019 Mexico consolidates labeling requirements for milk and hams 03/16/11 MX1011 Mexico Extends Temporary Procedures for Obtaining HRZs 02/11/11 MX1012 Hard Freeze Damages Sinaloa Corn, and Produce 02/11/11 MX1013 Poultry and Products Semi-Annual 03/09/11 MX0095 Mexico Announces 2011 TRQ for Milk Powder Imports from WTO 12/20/10 Members MX0096 Mexico Announces 2011 Import TRQ for Dairy Preparations 12/20/10 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.
Posted: 28 May 2011, last updated 30 May 2011

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