Mexico. Poultry and Products Annual. Aug 2013 Ноя. 8, 2013
Mexican poultry production continues climbing even in the face of additional avian influenza outbreaks. Consumers are demanding increasing volumes of broiler meat which is leading to greater imports even with the threat of antidumping duties on U.S. chicken leg quarters. U.S. exports of poultry meat and products will likely top $1 billion again in 2013 as food manufacturers, retail outlets, and restaurants gain experience handling U.S. product.
The Post forecast of Mexican commercial broiler meat production for 2014 is 3.05 million metric tons (MMT) as the sector’s continued consolidation along with improved production systems has enabled the industry to overcome the challenges of the 2012 and 2013 Highly Pathogenic Avian Influenza outbreaks across the country. Sources continue emphasizing that the 2012 HPAI outbreak in the State of Jalisco had minimal effect on commercial broiler meat production and product availability as the problems was largely isolated to layer operations. Implementation of biosecurity programs and other measures to support the progenitor sector has been an essential to maintaining production growth. Mexican broiler producers are optimistic that full recovery is possible by the end of 2013 or early 2014 provided that they are isolated against any potential new AI outbreaks.
Post’s 2013 revised broiler production estimate of 3.0 MMT takes into account industry’s ability to safeguard itself against larger HPAI losses and reflects long-term trends of steady growth. According to the National Poultry Union (UNA), the 2012 domestic flock decreased only 2.5 percent despite the attention focused on the sector for the HPAI losses as many of the affected farms were layer operations and do not factor into broiler production. Post’s 2012 broiler production estimate remains unchanged.
Lower Priced Feed Offset by Increased Biosecurity Costs
Feed remains the greatest contributing factor to poultry production costs. The sector estimates increased corn production will lower input costs; however, biosecurity requirements continue driving production costs higher. As previously reported, the Mexican Government launched biosecurity campaigns to increase awareness of the benefits of enhanced measures while also requesting industry implement additional surveillance to preserve and protect the flock health. As firms implement and maintain these measures, production costs have increased and are expected to remain higher over the medium- to long-term.
Main Producers States Appear To Be Recovering Production Levels
Official data from the Mexican Government for 2013 is not available, but sources suggest that broiler production will continue to be concentrated in the leading producing states. In 2012 and 2013, several of the leading producing states (Jalisco, Aguascalientes, Guanajuato, and Puebla) were affected by HPAI outbreaks.
Post’s 2014 commercial turkey meat production forecast is 10,000 MT. This represents zero growth/loss over Post’s 2013 revised production estimate. Post’s 2012 production estimate of 14,000 MT remains unchanged.
Producers have little incentive to expand production and have actually contracted since 2012. Producers report that they find the production system for breeding, growing, slaughtering, and further processing extremely challenging with little incentive to increase production as products compete with imports and producers have only a seasonal period when their products are consumed as whole turkeys.
In Mexico, the growing period for gobblers and hens remains 15 and 13 weeks, respectively. During the first 5 weeks, jakes and jennies are kept in temperature and light controlled houses. After this period, turkeys are taken to outdoor pens until desired weights are reached. Gobblers are slaughtered at an average weight of 12 kilograms while hens are slaughtered at an average weight of 9 kilograms.
Industry sources report that approximately 60 percent of turkeys are sold raw for processing while the remainder is produced for more intensive manufacturing, cutting, and smoking.
Seeking More Protein, Consumers Choose Broiler Meat
The Post 2014 broiler consumption forecast is 3.73 MMT and the post consumption estimate for 2013 has been increased to 3.67 MMT. Private sources indicate that consumption growth is recovering and per capita consumption levels appear on the upswing. Post’s 2012 consumption estimate is unchanged.
Consumers are seeking more animal protein in their diet and broiler meat, e.g., chicken leg quarters or processed chicken products, has remained an economically viable option. Consumer perception has not been misguided in the wake of the HPAI outbreaks about the safety and quality of poultry products. Additionally, the creation of more points of sale and increasing numbers of fast food style restaurants has exposed more people to broiler meat products.
UNA reports that six out of ten Mexicans include poultry products in their diet. UNA reports, as well, that per capita consumption has increased from 15.83 kg in 1994 to 25.8 kg. in 2012. UNA is forecasting continued, albeit smaller, growth in 2013 and 2014.
This growth has been possible as more consumers have been exposed to more broiler meat options at attractive prices. Dark meat remains consumers’ preferred poultry meat and is still consumed in higher volumes among low-income households. High-value cuts and added-value products are consumed by middle and upper income households.
Prices Stabilized through Increased Imports and Larger Production
Historically, the demand for broiler meat has been income elastic. After eggs, it has been one the most affordable animal protein sources. For the first seven months of 2013, broiler prices showed greater increases than in prior years and despite not having as significant an impact on production, the price changes have been attributed to the HPAI outbreaks in Guanajuato. (Note: the HPAI outbreaks in Guanajuato affected progenitor establishments). Recently, prices have softened as supplies (i.e. domestic production and imports) are now meeting demand.
For the first eight months of 2013, broiler prices averaged 31.06 pesos per kilogram (U.S. $ 1.03 per lb.) while CLQ’s averaged 28.79 pesos per kilogram (U.S. $0.95 per lb.) . During the second half of 2012, prices for pork and beef were increasing and, as such, demand for poultry meat remained strong. Pork prices averaged 35.00 pesos per kilogram (U.S. $1.16 per lb.) and beef prices averaged 47.40 pesos per kilogram (non-fine cuts at U.S. $1.57 per lb.).
Whole Turkeys Still Consumed Seasonally, but Processed Turkey Products Consumed Throughout the Year
Post’s 2014 turkey consumption forecast is 175,000 MT which is slightly greater than post’s revised 2013 production estimate of 173,000 MT. Post’s 2013 consumption estimate is based on greater than initially estimated imports for the first half of the year which far surpassed domestic supply. Post’s 2012 consumption estimate was revised downward from USDA’s estimate as imports were lower and, again, constitute the bulk of turkey meat consumed in Mexico.
Whole turkeys are viewed as a seasonal food consumed during holiday festivities and have not taken on great consumer acceptance as something to eat throughout the year. Nevertheless, industry has a strong interest in making turkey meat more accessible to consumers by increasing points of sale or expanding types of turkey products (e.g., ground turkey meat) in existing points of sale. The overwhelming share of turkey consumption remains deli-style meats where turkey is one component along with fillers (e.g., Jamon de Pavo which is a formed turkey “ham”) often sold in retail outlets and grocery stores.
Mexican per capita consumption is between 1.4 and 1.5 kilograms and has generally been flat over the last several years. Over the past ten years, turkey per capita consumption is down.
The United States exported over $1.1 billion in poultry and poultry products to Mexico in 2012 and is on pace to far exceed that level in 2013 and should do so in 2014, as well. During the first five months of 2013 approximately 98 percent of Mexico´s chicken and turkey imports originated from the United States. The remainder came from Chile and in a smaller proportion, Canada. On May 15, 2013, The Secretariat of Economy (SE) announced in the Mexican Federal Register (Diario Oficial) a duty-free import quota of 300,000 MT fresh, chilled or frozen broiler meat under HTS codes: 0207.11.01, 0207.12.01, 0207.13.03, 0207.13.99, 0207.14.04, and 0207.14.99 for calendar year 2013. Later, SE extended the original duty-free period from December 31, 2013, to February 28, 2014. At present, Brazil seems the only country that may be a source for these additional imports as the Mexican Government has recently authorized 3 poultry slaughter/processing establishments the required equivalence and zoosanitary access to the Mexican market. Industry sources, however, anticipate that Brazil will only be able to fill a small portion of this quota as logistical and transportation costs will be prohibitive to fully utilizing the newly gained tariff free quota access.
Mexico’s Imports from the U.S. Will Increase Despite the Possibility of Brazilian Competition
The Post 2014 broiler meat import forecast is 690,000 MT; slightly higher than the revised 2013 Post estimate of 675,000 MT. Poultry meat imports have been increasing gradually over the years as meat processors become more accustomed to working with imported products like mechanically separated/deboned poultry meat and imported chicken leg quarters as well as fast food establishments expand and offer processed chicken products (like breasts and other meat for chicken patty sandwiches).
As poultry prices have remained competitive with regards to pork and beef, consumers are continuing to demand poultry products and domestic production is not able to meet supply at current prices. As such, imports are expected to continue growing and are likely to be even greater than USDA’s previous 2013 estimate of 640,000 MT. The import estimate for 2013 was revised upward to reflect likely scenarios of year to date trade continuing to expand for the remainder of the year. Moreover, as the Government of Mexico (GOM) has held antidumping duties on U.S. CLQs in abeyance, importers have continued bringing more products into Mexico. Import estimates for 2012 were kept unchanged and are based on official data.
Industry sources report that although SE issued a duty-free quota for numerous poultry products, these sources have cited logistics challenges; including cold storage capacities at Mexican water ports as something that could curb imports. In addition, these sources believe that transportation costs, handling, and a limited cold chain may limit the opportunity for other suppliers to get products to Mexican consumers. Furthermore, these challenges will likely result in reduced shelf-life and quality challenges.
The Post 2014 export forecast is 5,000 MT and the revised 2013 export forecast is now 5,000 MT, as well. Numerous export destinations closed their doors to Mexican poultry after the HPAI outbreak in the State of Jalisco in mid-2012. Moreover, the January/February 2013 HPAI outbreaks in the states of Jalisco, Aguascalientes and Guanajuato worked against Mexico gaining greater international market access in new locations. Mexico’s current exports are limited generally to processed products that have received thermal processing.
Mexico has not completed the necessary requirements for equivalency in poultry slaughter nor does it have U.S. recognition as disease free for exotic Newcastle disease or Avian Influenza that would afford it greater access to the United States and the ability to use Mexican origin and Mexican slaughtered broilers. The 2012 export figure was kept unchanged to reflect official figures.
The Post 2014 import forecast is 166,000 MT, which is marginally greater than the Post 2013 revised estimate of 164,000 MT. The 2014 forecast is based on sustained demand from domestic processors which cannot source ample supplies (e.g., turkey legs) from domestic production. Import estimates for 2013 were adjusted upwards based on current trade trends and lower than earlier anticipated domestic production. For 2012, import figures were revised downward to reflect updated official data.
As previously stated, the domestic consumption of whole or smoked turkey is seasonal, so imports of mechanically separated/deboned turkey meat, either chilled or frozen, to prepare deli meats and related products is anticipated to continue growing. Consumers appear to prefer some of these products which are considered to be healthier and lower in fat content than other deli meats.
The Post new 2014 export forecast is 1,000 MT which has been stable for the past several years. It appears the United States is the largest export destination for these products which have likely been sourced from U.S. imported turkey meat and processed into added value products under HTS 1602.31. Post’s 2013 and 2012 Mexican turkey meat export estimates are unchanged.
AD Investigation into Imports of U.S. CLQs
Mexico has chosen not to impose any duties on imported U.S. CLQs. On August 6, 2012, the GOM through the SE announced the final resolution for the AD case on the import of U.S. CLQs and the compensatory duty levels for these imported products. However, in light of the 2012 AI outbreak in the state of Jalisco and increased poultry and egg prices, SE determined that the compensatory duties would not be imposed until the supply and demand situation stabilized.
Mexico Disease Status
HPAI Outbreak in Jalisco, Again
News of another HPAI outbreak in Jalisco in August 2013 shocked the poultry sector. Zoo-sanitary and animal health authorities from the GOM notified the World Organization for Animal Health (OIE) about the resurfacing of an AI outbreak in the state of Jalisco in early August. This situation is reportedly under control after the zoo-sanitary measures were implemented in the area. SENASICA reported that nearly 359,000 laying hens were found to be affected by the H7N3 HPAI virus.
Broiler and Turkey Meat
Mexican consumers continue looking for healthy protein sources at affordable prices. To meet this demand, the U.S. and Mexican poultry industry organizations have been working together to develop poultry products that are tailored for the Mexican consumer preferences and price points. A means to do this has been working with Mexican culinary and food science schools to develop potential products and menu offerings. Processed poultry products have shown potential as something that Mexican processors could use to meet the growing need for ready-to-eat products demanded by national and regional supermarket chains. These value-added products often use imported raw materials that are further processed locally.
The Post 2014 Mexican table egg production forecast is 2.6 MMT as the sector continues struggling with AI outbreaks. Despite the August 2013 AI outbreak in Jalisco laying hens, official and private sources estimate that egg production will stabilize. UNA’s estimate for 2013 egg production is 2,547,361 MT. Mexican industry reports suggest that farms have been repopulated at a rate of 4.5 to 5 million birds per month. UNA’s latest data for 2012 egg production was 2,386,576 MT.
Previous to the AI outbreak, per capita consumption of eggs in Mexico during 2011 was 22.4 kilograms (approximately 330 eggs) per person. Per capita consumption is estimated to have dropped in 2012 and 2013 to about 20.8 kg due to higher egg prices and scarcer product availability.
Will U.S. Egg Exports Persist in a Post-HPAI Outbreak Mexico?
Mexican firms have been importing U.S. eggs to help meet Mexican demand for table eggs as well as eggs for breaking/processing use. As reported in other GAIN reports, SE announced a tariff rate quota for eggs from several countries but few others, with the exception of Colombia, have been able to supply eggs into Mexico at competitive prices. NOTE: Under NAFTA, the United States has duty free and unlimited egg access to Mexico.
Imports of both table eggs and egg products should remain strong through 2013 and in 2014 as customers, especially processors, become more familiar with U.S. eggs and egg quality and logistic challenges are broken down with increased experience. As sourcing domestic eggs at affordable prices has been difficult for many Mexican egg purveyors, many firms import U.S. eggs and transfer them to their own branded egg containers for sale at wholesale markets or retail outlets. Imports of U.S. egg products, including liquid egg mixes also substantially increased since 2012 and should remain strong in 2013 and 2014.
Refrigerated or Unrefrigerated. Is that the Only Question Facing Egg Imports?
Local traders reported some concerns about importing larger volume of U.S. table eggs because of the lack of refrigeration facilities at large terminal markets. Other concerns expressed with U.S. eggs have been the color of their yolks which are lighter than what Mexican consumers are accustomed to using.
Some distributors believed that only U.S. eggs needed refrigeration but the practice is now gaining support for the refrigeration of even domestic eggs in Mexico. As to yolk coloration, some buyers thought that lighter colored U.S. egg yolks spoke to lower nutritional values in U.S. eggs. The U.S. Poultry and Egg Export Council (USAPEEC) has undertaken marketing and educational efforts to tackle this misconception and indicate that yolk color differences are related to feed ingredients and not nutritional attributes. Also, USAPPEC has led some educational efforts to raise consumer and processor awareness about the U.S. egg grading system which should help clarify issues across all egg classes.
Mexican egg exports decreased due to supply limitations and the closure of foreign markets. As of today, Mexican egg and egg product exports are only SPF eggs and egg products that have received a thermal process.
Within one week of HPAI onset, egg prices skyrocketed 30 percent compared to the week before the outbreak. By early January 2013, prices were falling and according to the National Service of Market Information (SE/SNIIM) ranged between 23 and 27 pesos per kilogram for most urban centers. Prices have been generally within that band for the year as AI outbreaks have come and gone