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CME: Mexican Domestic Beef Consumption Remains Fairly Stable

14 February 2020

US - The Mexico office of the USDA Foreign Agriculture Service issued an update last week on the Mexican livestock industry and we thought this is a good time to offer our readers a primer of this important market for the US meat industry, writes Steiner Consulting Group, DLR Division, Inc.

While Mexican domestic beef production has been steadily increasing in recent years, domestic beef consumption remains fairly stable. In part this may be due to the far higher cost of beef relative to other proteins but also because the US consumer is willing/able to pay more for Mexican beef and thus more product is going north of the border.

USDA is currently estimating Mexican beef production for 2020 at 2.065 million MT (4.6 billion lb. cwe), 45k MT or 2.2 percent higher than the previous year. In the last 10 years Mexican beef production has increased by 320k MT (705 million lb.) and yet the amount of Mexican beef going into domestic channels in 2020 is expected to be only marginally higher than what it was back in 2010.

Beef imports into Mexico during the past 10 years have been steadily declining as well and in 2020 US is forecasting imports to be 205k MT vs. 200k MT in 2019 and 296k MT in 2010. On the other hand, beef exports in 2020 are forecast to be 390k MT, up almost 10 percent from the previous year and an almost three fold increase from just 10 years.

Mexico has become an increasingly important imported beef supplier to the US. Last year, beef imports from Mexico were 64 percent higher than those from New Zealand and just 9 percent smaller than Australia. However, the difference is that Mexico tends to ship cheaper cuts that compete with US fed beef rather than the lean grinding beef coming from AU/NZ.

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