USDA Animal and Plant Health Inspection Service (APHIS) and the National Service of Agro Alimentary Health, Safety and Quality (SENASICA) have altered their port of entry operations along the border due to recent violence along the border. APHIS suspended inspection of live animal imports into the US at port of entry operations in Reynosa, Tamaulipas (Pharr, TX) and Nuevo Laredo, Tamaulipas (Laredo, TX) shifting these operations to Piedras Negras, Coahuila (Eagle Pass, TX) effective 29 March 2010. SENASICA adjusted its hours of operations at its Import Inspection Points (OISAS) in the states of Nuevo Leon (Colombia) and Tamaulipas (Nuevo Laredo, Matamoros, and Reynosa) effective 5 April 2010. Both governments continue to work on a long-term solution to ensure agricultural trade.

Recently, FSIS and SENASICA signed the “Terms of Reference for the Operational Relationship of the Mexican National Service of Health, Food Safety, and Agro-Alimentary Quality and the United States Food Safety and Inspection Service in the Trade in Meat, Poultry and Egg Products Between the United Mexican States and the United States of America” focuses on matters of equivalence, audit procedures, the listing and delisting of eligible establishments for export, and improved communication.

Mexican Production, Consumption, & Trade

Production

Broiler meat production declined in 2009 after 12 years of increase as a result of high grain prices in 2007, the devaluation of the Peso, international economic crisis, and increased competition from imports. Production in 2010 forecast was revised down to 2,792 thousand metric tons (TMT) following a 2.2 per cent decline in 2009 (2,789 TMT). In 2009, reduced incomes resulting from the economic crisis caused diminished poultry product sales despite being the cheapest protein option. Increases in 2010 are dependent on the economic recovery rate and imported grain costs, as Mexico is a grain deficient country. However any possible reductions in production inputs (lower grain costs resulting from record US corn yields) will likely be offset by increased costs for energy, packing materials, and transportation.

Consumption

Consumption estimates were revised down to 3.37 TMT for 2010 to reflect the slow economic recovery; whereas 2009 and 2008 consumption was revised higher due to higher imports and final data respectively. The Mexican National Poultry Union (UNA) predicts average per capita consumption to be 25.73 kg in 2010, slightly lower than 2009 (25.96 kg). Poultry consumption benefitted in 2009 from the effects of H1N1 in pork. Consumers still prefer whole birds to chilled parts, however sales of chilled poultry parts, ready-to-cook (RTC), ready-to-eat (RTE), and value-added poultry products are on the rise at supermarkets.

Trade

2010 broiler import estimates were revised up 10.1 per cent with expectations of increased imports of raw materials for meat processing; 2009 estimates were revised 7.2 per cent higher due to cheaper international prices. The US continues to be Mexico’s top supplier, though it has lost ground to Chilean imports, especially mechanically separated chicken (MSC), which accounts for 28 per cent (+108 per cent). Mexico’s top imports included fresh or chilled MSC, fresh or chilled turkey parts, and frozen chicken leg quarters.

Broiler export estimates for 2010, 2009, and 2008 were revised upward to reflect official data and efforts to increase exports. The slow rate of increase in poultry exports has been attributed to problems with consolidation and marketplace diversification. The Mexican government also allocated monies to the poultry and egg industry for promotion ($285 million pesos) and has established a government loan program to encourage value-added product production. However Mexico has become frustrated and views trade between the US and Mexico to be one way in poultry with USDA’s lack of recognition of Mexico’s disease-free status (Exotic Newcastle Disease (END)), which is impacting its ability to diversify its export markets. APHIS and SAGARPA/SENASICA are working together to provide recognition to Mexico as being END free in areas.

After much criticism, UNA has sought amendment of the labeling regulation, which would establish requirements on products used in the production of sausage and hams. In addition to trade issues dating back to SAGARPA’s January 2008 prohibition of combo use for frozen meat and products, the implementation delay ran out for 100 per cent intrusive sampling of combos at the border 15 March 2010. Industry is uncertain of the new inspection system and its implementation date as Mexican authorities have struggled to develop a system that doesn’t impede trade.

On another note, Mexico’s Peso recently firmed after continually battling the current economic times. The recent rise can be attributed to the release of data showing strength in the US manufacturing sector and increased US consumer spending in addition to the recent approval of an aid package to an indebted Greece from the European Union (EU) and the International Monetary Fund.

Source: USDA FAS/Various News Wires/USDA AMS PMNA

Further Reading

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