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Mexico has intensified a long-term trend to diversify both imports and exports of red meat as its livestock and red meat industries continue to grow.
According to a recent report from the Foreign Service of the USDA, the United States Department of Agriculture, Mexico’s livestock and red meat industries continue to grow. Helped by Government incentive programs and recent stable grain prices, the country’s cattle herd is being slowly rebuilt, while live cattle exports (primarily to the U.S) are said to have levelled off. The forecast for Mexican cattle production in 2017 has been raised to 7.3 million head, reflecting continued rebuilding of the herd, and the estimate for cattle production in 2016 has also been raised to 7.1 million head.
Established several years ago, the ‘Programa de Fomento Ganadero’, a program to promote the Mexican livestock sector, together with the ‘Programa de Mejoramiento Genético’, a genetic improvement project, are said play an important role in the cattle sector, and are expected to continue providing financial and technical support to cattlemen in 2017. It is estimated that around 99% of Mexico’s live cattle exports are destined for the U.S., in particular for backgrounding and feeding operations. However, these exports are said have slowed as the U.S. gains herd recovery.
“Contrary to the poultry and pork sector where vertical integration has seen a significant uptick in recent years, the cattle/beef sector is integrating at a slower pace”, says the report. Only a few larger companies in northern Mexico are said to have moved in this direction, while medium and small producers continue in their respective silos. “Smaller ranchers struggle with the distance between feedlots and slaughter/processing facilities, which are generally not well integrated, and are owned by various actors”.
For the domestic beef market, price is said to continue to be the main limiting factor to increasing per capita consumption. The estimated consumption of beef has been raised, but only to marginally higher than the revised 2016 consumption estimate. It is expected that high beef prices will keep consumption in check for at least the first half of 2017.
Federally inspected facilities for red meat production are reported to be expanding as the country has intensified a long-term trend to diversify both imports and exports of red meat. The 2017 forecast for Mexican beef exports has been revised to 285,000 tonnes as the country seeks to strengthen its presence in the international market; Mexico is said to aim to increase exports to Japan, South Korea, and the Middle East, among others. Meanwhile, most Mexican beef continues to be principally exported to the U.S.