Mexico - Livestock and Products Annual 2010

While Mexican cattle inventories for 2011 are expected to decline in 2011, swine production is expected to increase slightly, write Zaida San Juan and Daniel R. Williams II in the latest GAIN report from the USDA Foreign Agricultural Service.
calendar icon 25 October 2010
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Report Highlights:

Mexican red meat consumption is forecast to increase in 2011 as the economy and consumer purchasing power recover. A lower cattle export level will result in higher domestic meat supplies and stable domestic beef prices. US beef exports to Mexico will continue increasing, principally toward the end of 2010, supported by the elimination of duties on imported US beef. Removal of feet from carcasses and retaliatory duties on bone-in hams are two new challenges for US exporters; however, the United States will continue to be the principal source of imports.

Executive Summary:

Live Cattle and Beef
Mexican cattle inventories for 2011 are expected to decline. Higher slaughter rates and exports will not be offset by weak growth in calf production. Growth in slaughter will be supported by higher demand due to the economic recovery. Exports of cattle for 2011 will continue to recover; however, exports will only represent 33 per cent of the 2008 level. In 2011, beef production and consumption will increase, supported by stronger consumer purchases, while beef imports are expected to decline approximately 2 per cent compared to 2010. Exports of live cattle to the United States will be hampered by security constraints on veterinary pre-inspection of live animals on the Mexican side of the border.

Live Hogs and Pork
In 2011 total swine production is expected to increase slightly. The increase will occur due to higher hog prices and stronger pork demand. Ending inventories are expected to increase for both 2011 and 2010. Mexico’s imports of hogs are forecast to increase in 2011, reaching 12,000 head. Pork production for 2011 is forecast to recover (2 per cent) after no increase for 2010. Growth in pork consumption is forecast to increase 1.3 per cent in 2011 after a slight decrease (-0.2 per cent) in 2010 due to lower than expected demand recovery. Mexico’s pork exports are forecast to grow 6.3 per cent in 2011 compared to 2010.


Animal Numbers, Cattle
Meat, Beef and Veal


Cattle production for 2011 is forecast to increase 1 per cent, the same trend as in 2010, in response to increased demand for feeding and exporting cattle due to a stronger consumer purchasing power, recovery of beef consumption, and better export prices. Cattle production is expected to increase 1.9 per cent in 2010 compared to 2009 levels.

The 2009 cattle production estimate has been revised up from the previous report and is now approximately 1.5 per cent higher than the 2008 level. This change reflects official and private sector data.

Total cattle inventories for 2011 are expected to decline 2.2 per cent as a result of lower production and import levels that failed to offset slaughter and export levels. Total inventories for 2010 and 2009 have been revised up to reflect the higher-than-expected calf production.

Beef production for 2011 is forecast to increase 2.5 per cent; it will be supported by recovery of the economy, and thus disposable consumer income; relatively stable domestic consumer prices, and increased exports. Beef production for 2010 and 2009 was revised to match official data.

For 2011, slaughter is forecast to increase 2.2 per cent, with slaughter for 2010 increasing by 2 per cent. During 2011, a better economy and the Government of Mexico’s (GOM) support for increased slaughter in Federally Inspected Facilities (TIF) will stimulate the industry. Initiatives are aimed at increasing slaughter and packing at TIF facilities. Furthermore, TIF plants will begin producing more value-added products. For example, one TIF plant will begin producing consumer packages of viscera, which will be marketed both domestically and internationally.

In addition, TIF plants will increase the slaughter of animals which are sourced from suppliers with “trusted supplier” certificates. The “trusted supplier” program guarantees that cattlemen feed animals without using prohibited feed supplements, such as Clenbuterol.


Consumption of red meat is expected to increase in 2011, supported by the recovery of disposable consumer income; however, the level will only be slightly higher than the 2008 level.

Beef consumption is expected to grow in 2011 by 1.4 per cent, following the trend expected for 2010 of 1.8 per cent, supported by better consumer purchasing power, principally among middle- and lower-income consumers, whose consumption is expected to increase toward the end of 2010.

However, consumption of meat is tied to retail price variability; thus, an increase in beef prices, particularly due to higher production costs resulting from higher prices for imported grains, domestic taxes, and availability of substitutes, could put downward pressure on beef consumption.

The 2010 beef consumption estimate was revised down because of higher exports and slower than expected recovery of beef consumption.



Cattle imports are forecast to increase 20 per cent in 2011 to 30,000 head, following a drop since 2009 in which only 20,000 head were imported. About 25,000 head are expected to be imported in 2010. Cattle import figures for 2011 are estimated to be only 33 per cent of the 2008 import level.

Until 2008, Nicaragua, Australia, and New Zealand were the main suppliers of cattle to Mexico, but since 2009 the United States has become the largest supplier with more than 95 per cent of total imports, followed by Canada. This growth trend will continue in 2011, but at a slower rate than the 2008 level.

In beef, the presence of Canada in the Mexican market is increasing. From January to March 2010, U.S beef exports to Mexico declined 6.2 per cent compared to the same period in 2009. In contrast, Canadian beef exports to Mexico increased 39 per cent, largely due to heavy promotional activities by the Canadian government and exporters.

Mexican imports for 2011 are forecast to decline 1.5 per cent, due in part to higher beef production obtained from feeder calves not exported to the United States, stable domestic prices, and weak recovery of domestic consumption.

Beef imports for 2010 were revised higher, principally due to elimination of import duties imposed on U.S beef cuts as the result of an antidumping investigation conducted in 2000.

Certain beef products remain prohibited from entering Mexico from the United States due to the discovery of bovine spongiform encephalitis (BSE) in a US cow in December 2003. The list was published in GAIN Report MX 5062 BSE Update (Tenth Edition) on July 25, 2005.

Prohibited products:

Live cattle for slaughter
Boneless and bone-in meat from cattle 30 months of age or older
Bovine offal and viscera other than those currently authorized [i]
Products derived from non-protein-free tallow
Gelatin and collagen prepared from bone
Ruminant meal
Ground beef


Mexican cattle exports are forecast to decrease 5 per cent in 2011, but increase 2 per cent in 2010. The level in 2011 (1.05 million head) will be lower than 2006 (1.2 million head). The decrease in exports of feeder calves to the United States is reportedly due to reduced prices paid to Mexican exporters and violence at the border, which has constrained USDA inspection personnel’s ability to conduct import inspections (see GAIN Report MX 0042 Trade Rerouted Due to Port of Entry Inspection Suspension).

For 2011, Mexican beef exports are forecast to increase 20 per cent due to expanded market access into Russia, China and Singapore. With Russia, an agreement was completed and Mexican beef exports have initiated. The negotiations with China and Singapore are close to reaching an agreement. In addition, world-wide economic recovery will stimulate beef consumption creating better opportunities for Mexican beef exports.

The Mexican government continues to strengthen its domestic inspection service and is advancing towards international equivalence for sanitary procedures, as differences in such procedures between Mexico and importing countries have in the past precipitated temporary halts of exports. In 2010, an increase of approximately 18 per cent is expected for Mexican beef exports due to competitive pricing.

Mexican beef exports have been increasing with sales now flowing to 17 countries. The largest increase in exports is to the Russian market. Mexican exports are supplying not only food for human consumption, but also raw materials for use within the pharmaceutical and the pet-food sectors.

In addition, slaughter for export in TIF establishments is rising. Not only is the number of head slaughtered increasing, but also the number of TIF facilities for slaughter and processing. During this year, a new TIF plant was inaugurated in the state of Durango just for slaughter and packing meat for export to Korea. This establishment was built with capital investment from both Mexicans and Koreans.

According to industry contacts, beef exports are expected to increase enormously, even though market entry for small companies is difficult. At least one large Mexican exporter is registering an annual 2-digit increase in export sales per year.

Mexican Beef, a Mexican beef exporters’ association, promotes its members’ meat in foreign markets. It uses a scheme similar to that of the US Meat Export Federation (USMEF); thus, the association has GOM support and membership fees (which have a fixed and a variable component, the latter based on the volume of exported meat). For 2010, Mexican Beef received 10 million pesos (US $787,401) [1] from the GOM for promoting Mexican beef exports.


Animal Numbers, Swine
Meat, Swine


Swine production for 2011 is forecast to increase 1 per cent, higher than 2010. Higher swine prices, stronger consumer purchasing power, and a recovery of consumer confidence after the H1N1 influenza outbreak will stimulate production.

Furthermore, the Mexican swine sector could benefit from the GOM’s efforts to obtain market access in China. If obtained, the Mexican swine sector will need to increase production, continue with integration, and reduce production costs and losses. Although only the most efficient firms will export, medium-sized farmers are aware that there could be more domestic opportunities to sell pork, but they also must improve their competitiveness.

Due to the past economic crisis and H1N1 outbreak, both of which negatively affected the pork sector, sow beginning inventories are currently limited and data previously reported for 2010 were revised down slightly; thus, the slaughter level for 2011 will be comparable to 2010.

Total beginning inventories are forecast to increase 4.4 per cent for 2011, mainly due to a lower-than-expected slaughter level for 2010. However, slaughter is forecast to increase one per cent in 2011 as a result of pork demand and consumption recovery after the H1N1 outbreak.

Pork production for 2011 is expected to increase 2 per cent over 2010. Furthermore, industry sources believe this 2011 production will be slightly higher than 2009’s. For 2010, a year in which a decrease of approximately 1 per cent (1,161 TMT) is now expected according to official data, the decrease is minimal thanks to a successful GOM and industry promotional campaign and lower pork prices.


Pork consumption is forecast to increase more than 1 per cent in 2011. However, the increase is tied to price and will depend on retailers’ pricing strategies. Some retailers are selling pork at higher prices, claiming they are merely passing on higher domestic prices as well as the cost of retaliatory duties on imported US pork (see GAIN Report MX 0054 Mexico Increases Trucking Retaliation Against Ag Products).

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 a substitution effect by consumers who see poultry as a cheaper and “healthier” protein. In addition, growth in pork per-capita consumption is constrained due to consumers’ perception of pork as an unhealthy meat product.

Mexico’s meat processors will continue to use imported US pork variety meats as well as bone-in cuts because domestic production is not sufficient to meet their demands. Despite the retaliatory duties imposed on U.S bone-in pork, an analysis conducted by some meat processors has shown that the duties will only slightly affect the cost of production, and they do not expect a large amount of substitution for U.S boneless pork cuts.


In 2011, Mexico is forecast to increase imports of hogs by 20 per cent; however it will only reach 15 per cent of the 2008 level. For 2010, an increase is expected of 43 per cent, supported by the imports of purebred breeding animals for repopulating the Mexican herd. Hog exports will remain at zero.

Pork exports are expected to increase 6.5 per cent in 2011, but if Mexico signs a veterinary health protocol with China, the percentage could be considerably higher.

In 2010 pork exports are expected to recover 14.3 per cent following lifting of numerous foreign bans due to H1N1 outbreak; exports will be supported by value-added pork exports to Japan. However the level will remain lower than in 2008.

Despite the retaliatory duties imposed on U.S bone-in pork cuts, imports are expected to continue; however, it is possible that more bone-in pork could be sourced from Canada.

In addition, according to NOM-030, pork carcasses with feet will no longer be permitted to enter Mexico. This is a new interpretation of NOM-030.


Beef and Pork sectors

Beef import duties eliminated
As of August 11, 2010, Mexico canceled the compensatory duties imposed on U.S beef cuts as a result of an antidumping investigation in 2000. Even though the Mexican Government announced that these duties would terminate on April 29, 2010, the duties were not effectively canceled until August 11, 2010, according to the official notice published in the Diario Oficial (DOF) (Federal Register). Thus, duties paid between April, 29 and August 11, 2010 will not be refunded.

Retaliatory duties on U.S pork exports
On August 18, 2010, the Secretariat of Economy published in the DOF a list of additional products facing retaliatory duties, which included swine products. This is due to the United States’ failure to comply with the trucking clause of the North American Free Trade Agreement (NAFTA).

The following swine products were added to the product list:

Section Description Import Tariff
0203.12.01 Hams (hocks), shoulders and cuts thereof, with bone. Chilled 5%
0203.22.01 Hams (hocks), shoulders and cuts thereof, with bone. Frozen 5%
1602.49.01 Cooked pork rind in pieces (pellets). 20%

According to industry sources, these duties will increase production costs for value-added products. Imports of U.S bone-in hams will continue because bone-in ham prices will not be as high as imported boneless pork legs. In addition, the duties could also slightly affect the Mexican rendering industry, because the Mexican rendering industry sources products from TIF establishments which debone imported bone-in hams.

Brazil Free Trade Agreement
The Mexican and Brazilian presidents have stated their intention to sign a free trade agreement. However, the Mexican livestock sector opposes a free trade agreement (FTA) between Mexico and Brazil that would include livestock products. The Mexican livestock sector’s leaders believe they will be unable to compete against Brazil due to dependence on imported feed grains and shortages of commercial credit in Mexico.

The Secretariat of Economy published on April 5, 2010, a new version of Mexican regulation NOM-051-SCFI/SSA1-2010, “General labeling and sanitary specifications for pre-packaged foods and non-alcoholic beverages”. (Spanish: Norma Oficial Mexicana NOM-051-SCFI-1994 Especificaciones generales de etiquetado para alimentos y bebidas no alcohólicas preenvasados) or NOM-051.

The new NOM-051 includes new requirements for labeling pre-packaged foods and non-alcoholic beverages. All pre-packaged food products and non-alcoholic beverages for sell directly to consumers are required to comply with NOM-051(including imported pork and beef meat). Thus, it is important that all U.S companies exporting to Mexico be aware of these changes and make appropriate modifications to the labels of its products. The new regulation is effective on January 1, 2011.

The most important changes to NOM-051 can be found in GAIN Report MX0505 Mexico Revises Food Labeling Regulations.

Trusted Importer Program and inspection of combos
The Secretariat of Agriculture, Livestock, Rural Development, Fishery and Food (SAGARPA) continues developing a plan of modernizing import inspection procedures. As part of this plan, the trusted importer program (UCON) has been implemented. Via this program, import inspection will occur at the TIF establishment where the imported meat is to be processed. According to the National Service of Health, Food Safety, and Food Quality (SENASICA), the UCON program may reduce import inspections at the border by 48 per cent, since that is the volume of meat imported by TIF facilities (additional information about UCON can be found in GAIN Report MX0506 Mexico Announces Reliable Importer Program for Meat and Poultry).

The next step of the plan involves procedures for import inspections for meat shipped in combo bins. A combo bin is a bulk-palletized, octagonal cardboard container used to pack meat and meat products for shipping at a low cost. SENASICA officially advised the border inspection points that the combo import inspection procedures was postponed indefinitely pending publication in the DOF (Federal Register). This publication will contain a new sampling procedure for import inspections, which SENASICA is currently drafting, and may implement in 2011.

It is possible that these new procedures may be similar to the Canadian or U.S import inspections for combo bins. SENASICA has stated that the plan is part of an effort to harmonize import procedures with those of its NAFTA partners, and it will not seek to reduce the volume of meat trade in combo bins.

GOM reviewing regulations
As part of a transparent national plan, SENASICA is examining every interpretation of its regulations. For example, SENASICA has changed its interpretation of NOM-030-ZOO-1995 with respect to imported hog carcasses with feet. As of September 2010, SENASICA has informed trading partners that hog carcasses will only gain entry into Mexico when the feet have been removed.

Livestock Forward Contract Purchases
The Mexican Government (GOM) is promoting forward contracting between cow-calf operators and feeders, and is developing draft guidelines to be used with all forward contracts. This program will be coordinated by SAGARPA's paying agency, Support and Services for Agricultural Trading (ASERCA), and the National Confederation of Cattlemen Organizations (CNOG). The purpose of this program is to assist cow-calf operators and feeders with a tool to establish a forward price for calves.

Guidelines for the sale and distribution of food and drink at primary schools
On June 10, 2010, the Health Secretariat (SALUD) and Educational Secretariat (SEP) sent to the Federal Council for Regulatory Reform (COFEMER) draft proposed guidelines for the sale and distribution of food and drink at primary schools. The objective of the guidelines is to regulate the preparation, distribution and sale of healthy foods and drinks in primary schools and is aimed at reducing obesity and chronic diseases.

These guidelines sparked controversy within the food industry, including among meat and dairy processors. As of July 22, 2010, COFEMER had received 860 comments on the draft from industry sectors, government entities and the public. Some comments are against and others are supportive of the proposed guidelines. COFEMER published on July 22, 2010, its preliminary resolution and suggested SALUD and SEP consider comments submitted to COFEMER regarding these proposed guidelines.

The Mexican Meat Council (COMECARNE) and the Coordinator of the Industrial Council (CCE) are negotiating changes with representatives of the Presidency and the Secretariat of Economy (SE). COMECARNE believes working with these government offices will result in more success than directly negotiating changes with SALUD and SEP. The proposed guidelines, if implemented as proposed, could exert a profound economic impact on the meat sector.

COMECARNE’s members import U.S meat raw materials to produce sausages, hams and other ready-to-eat products, which are sold in schools or used to prepare sandwiches and other products eaten by children at schools. The meat industry has sought changes to the proposed guidelines to ensure meat products are not demonized, thereby resulting in a loss of consumer confidence in processed meat products. The lack of specifics in the guidelines has created uncertainty for the meat industry. For this reason, COMECARNE has created a working group of technical experts to develop a counter-proposal to be presented to SALUD and SEP.

The guidelines were to be implemented at the beginning of the current school year. However, implementation has been postponed until January 2011.

Movement of Animal certificates
As of June 25, 2010, SENASICA began issuing electronic certificates for the movement of animals within Mexico. The electronic certificate replaces the printed certificate which certifies an animal may move between areas within Mexico which have different disease status under Mexican regulations.


Red meat, including pork and beef, continues to be purchased by consumers in traditional butcher shops. However, since more and more women are entering the workforce, consumers were increasing purchases of value-added products before the economic crisis, especially cuts and prepared dishes at supermarkets. For 2010, as the economy grows again, it is expected consumers will increase demand for value-added products.

The US Meat Export Federation (USMEF), a non-profit, industry-sponsored trade organization dedicated to increasing exports of US red meat and meat products in all foreign markets, is active in Mexico. USMEF’s Mexico office has promoted the increase of meat consumption in various large retailers and food service exhibitions.

Further Reading

- You can view the full report by clicking here.

October 2010

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