Mexico

In July, 2007, Mexico lifted the ban on 11 counties after visiting Texas in May, 2007 to confirm the state was free of HPAI. The lifting of the ban coincided with the ending of the requirements that all shipments of raw U.S. poultry to Mexico be sealed at the point of origin resulting in a lowering of the costs of product destined to Mexico.

Even with a forecast 2.4% increase in poultry production for 2008, imports of both chicken and turkey in 2008 are being forecasted by the United States Department of Agriculture (USDA), Foreign Agricultural Service (FAS) to increase slightly primarily as a result of a growing demand from food processors for mechanically separated meat and cuts for further processing. Mexico in 2006 was 1 of the top 4 importers of U.S. broiler products and the largest importer of U.S. turkey meat. Mexico was also a major consumer of shell eggs from the U.S. and was a top destination for dried yolk in 2006.

Poultry producers in Mexico have benefited from a safeguard agreement with the U.S. that has been in pace since 2003 on chicken leg quarters. The tariff-rate quota (TRQ) on chicken leg quarters started in 2003 at 100,000 metric tons (MT) with an over quota rate of 98.8% and for 2007 the TRQ is presently 104,060 MT with an over quota rate of 19.8%. The safe guard will end in January, 2008 when the TRQ ends and the over quota rate drops to zero. Even with the safeguard enabling the Mexican poultry industry to invest in modern technology to increase their competitiveness, some producers are nervous about whether they will be able to compete in 2008 when it is lifted.

Chile is a major competitor with the U.S. in Mexico. In 2006 Mexico imported 28% of its frozen chicken cuts from Chile and currently Chile is supplying about 17% of Mexico’s frozen chicken cuts.

Turkey meat production in Mexico is forecast to increase from the 14,800 MT estimate in 2007 to 15,240 MT in 2008. However, turkey meat consumption in 2008 is expected to be at 207,000 MT and average per capita consumption has increased from 4.0 pounds per person in 2005 to 4.2 pounds per person in 2007. Part of the increased consumption in turkey meat has come from increased demand for cold cuts through sales in supermarkets and delicatessen-type restaurants and also from a change in consumption patterns as consumers become more health conscious. Mexico’s supermarket segment has also been growing rapidly and now accounts for 40% of overall food sales.

The processing industry imports most of the turkey cuts and mechanically separated turkey for the domestic cold cuts industry since domestic production cannot supply demand. Around 75% of Mexican turkey production is sold as whole turkeys during the Christmas season and the balance as cut-up and further processed turkey meat products. The U.S is the main supplier of turkey meat for Mexico; however, Chile also has a presence in Mexico. Products from Chile enter duty free under the Mexico-Chile Free Trade Agreement, which helps make their mostly frozen product competitively priced.

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