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Mexican Cattle Supplies Influenced by Drought

30 March 2012
Meat & Livestock Australia

MEXICO - Mexico is in the midst of its worst drought in the last 70 years, with a considerable portion of the northern half of Mexico facing extreme or exceptional drought conditions, writes Meat and Livestock Australia (MLA).

As the dry conditions are expected to persist, Mexican cattle liquidation is anticipated to support domestic beef production, while suppressing beef imports into the market this year.

Mexico’s ministry of agriculture (SAGARPA) has forecast Mexican beef production in 2012 to decline two per cent year-on-year, but remain three per cent above the five-year average, at 1.77 million tonnes cwt. This lower production is expected alongside SAGARPA’s expectations of a near record number of live cattle exports in 2012, at 1.43 million head – mainly feeder cattle for the US.

While much of Mexico is either in a long- or short-term drought, and estimates of cattle losses are uncertain, the Mexican cattle herd (including the beef cow herd), was estimated at 20.1 million head as at 1 January 2012, the lowest since 1963 (USDA).

Beef imports into Mexico in 2011 declined 11 per cent year-on-year, to 186,922 tonnes swt, primarily due to a fall in volumes of chilled beef from the US (down nine per cent) and Canada (down 25 per cent) – the two largest imported beef suppliers in Mexico. Beef imports from Australia also fell 46 per cent in 2011, to 861 tonnes (Steiner Consulting).

In contrast, Mexican beef exports increased 45 per cent in 2011, to 104,431 tonnes swt, as a result of a surge in the chilled trade to the US (up 49 per cent) and frozen shipments to Russia (up 542 per cent). The US and Russia were the two largest export markets for Mexican beef in 2011.

The rise in Mexican beef exports to the US in 2011 was driven by a combination of factors, including increased supplies of Mexican beef, high beef prices in the US, and the relatively stronger US$ against the Mexican peso. Russia, while traditionally sourcing beef from Brazil and Argentina, has increased orders from Mexico (and other suppliers) amid the shortfall in South American supplies in recent years.

Mexican beef exports to Japan in 2011 declined 40 per cent year-on-year, to 16,732 tonnes swt. While Japan was Mexico’s third largest beef export market, Mexico remained a relatively small import supplier in Japan, with volumes accounting for three per cent of total Japanese beef imports in 2011.

TheCattleSite News Desk



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