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Agricultural Sectors

Overview

Demand for U.S. agricultural products is expected to increase 15% in 2010 with the strengthening of the Mexican peso and the upturn in the Mexican economy. The overall market share is not likely to change as the geographic and tariff advantages that the U.S. enjoys in Mexico are likely to continue to make the United States the best import option for most major agricultural goods. The only products likely to suffer disproportionately are those affected by Mexico's imposition of punitive tariffs due to the U.S. Government's suspension of the U.S.-Mexico Cross-Border Trucking Demonstration Project.

The value of total agricultural trade in Calendar Year (CY) 2010 is estimated at US$15 billion, a rebound from 2009’s downturn. The United States’ major agricultural exports to Mexico from January to November 2010 were (in billion U.S. dollars): coarse grains (1.84), soybeans and meal (1.82), red meat (1.45), dairy products (0.75), poultry meat (0.60), cotton (0.56), wheat (0.5), processed fruits and vegetables (0.41), and feeds and fodder (0.36).

The following tables summarize the market situation of commonly exported U.S. agricultural products to Mexico:

Table 1. Mexico: Dairy Products (in 1000 Metric Tons)

 

2008

2009

2010

Total Market Size 1/

12,060

12,106

12,385

Total Local Production

11,684

11,728

12,049

Total Exports

17

14

21

Total Imports

356

358

316

Exports from the U.S. 2/

289

276

285*

1/PSD Post Statistics

2/ Global Agricultural Trade System

*/ As of November 2010 (most recent data available)

Growth in the production of fluid milk, cheese, butter and non-fat dry milk for 2010 and 2011 is a sign of recovery for the Mexican dairy sector and the economy as a whole. However, imports of non-fat dry milk (NFDM) and butter declined in 2010 because of a stronger peso relative to the U.S. dollar, larger availability of domestic fluid milk and a decline of imports by the Government of Mexico’s low income support program, LICONSA. Meanwhile, U.S. cheese exports are restricted due to retaliatory duties as a result of the U.S. Government's suspension of the U.S.-Mexico Cross-Border Trucking Demonstration Project. In 2010, consumption of fluid milk and cheese recovered mainly due to the uptick in low-income consumers’ purchases. In contrast, butter and non-fat dry milk consumption declined.

Table 2. Mexico: Meat (Beef and Pork) (in 1000 Metric Tons CWE)

 

2008

2009

2010

Total Market Size 1/

3,771

3,862

3,912

Total Local Production

2,828

2,862

2,892

Total Exports

133

121

140

Total Imports

943

1,000

1,020

Exports from the U.S. 2/

653

799

717*

1/ PSD Post Statistics, Foreign Agricultural Service

2/ Global Agricultural Trade System

*/ As of November 2010 (most recent data available)

Mexican red meat consumption is forecast to increase in 2011 as the economy and consumers’ purchasing power rebounded. Even though the economy and gross family income have recovered somewhat, pork consumption will increase at a rate lower than that of beef, mostly due to higher prices and the substitution by consumers away from pork towards poultry because it’s perceived as a cheaper and “healthier” protein. Nonetheless, Mexican meat processors will continue to use imported U.S. pork variety meats as well as bone-in cuts because domestic production is not sufficient to meet their demands. Furthermore, U.S. beef exports to Mexico will continue to increase as the Mexican economy recovers and the elimination of retaliatory duties on imported U.S. beef provides additional opportunities.

Table 3. Mexico: Poultry Meat (Chicken & Turkey) (in 1000 Metric Tons)

2008

2009

2010

Total Market Size 1/

3498

3428

3492

Total Local Production

2868

2792

2822

Total Exports

5

9

10

Total Imports

630

636

670

Exports from the U.S. 2/

484

502

537*

1/ PS&D Post Statistics, Foreign Agricultural Service

2/ Global Agricultural Trade System

*/ As of November 2010 (most recent data available)

The United States continues to be the largest supplier of poultry products to Mexico, providing approximately 80 percent of total poultry imports. Currently, other suppliers active in Mexico are Chile and Canada with approximately 20 percent of the poultry import market. The top three products imported by Mexico are fresh/chilled mechanically deboned chicken meat, fresh/chilled turkey parts, and frozen chicken leg quarters (although imports of poultry products are increasingly diversified). Most of these imports are used in food manufacturing. Mexican chicken meat production recovered in 2010 after a decline in 2009. For 2011, Mexican poultry production is forecast to grow approximately 1 percent although this is dependent on the recovery of the Mexican economy. The typical Mexican consumer continues to enjoy chicken, turkey, and egg products at competitive prices.

Best Products/Services

In 2009, Mexico imported US$13.4 billion worth of U.S. agricultural, fishery, and forestry products. The value for 2010 is forecast to be 13% higher and surpass US$15 billion, as imports continue to increase due to the strengthening Mexican peso and the upturn in the Mexican economy. The increase in U.S. exports to Mexico in 2010 has occurred across many product categories, such as wheat; coarse grains; soybeans and products including meal and oil; feeds and fodders (excluding pet foods); animal fats; sugars, sweeteners and beverage bases; poultry meat; dairy products; fresh fruits and vegetables; fruit and vegetable juices; wine and beer; hardwood lumber; softwood and treated lumber; hides and skins; cotton and breakfast cereals.

Resources

The USDA’s Foreign Agricultural Service offices in Mexico, including Agricultural Trade Offices in Mexico City and Monterrey and the Office of Agricultural Affairs at the U.S. Embassy in Mexico City, publish more than 100 publicly accessible market reports annually. The reports can be accessed at: http://www.fas.usda.gov/scriptsw/AttacheRep/default.asp

For more information, please contact:

Mr. Juan Herrera, Commercial Specialist

U.S. Commercial Service, U.S. Consulate Guadalajara

juan.herrera@trade.gov

Tel: (011-52-33) 3615-1440 ext. 103

Fax: (011-52-33) 3615 7665