CME: 2017 Pork Consumption Forecast to Be Larger Than in 2015

21.03.2017

The latest update from our Ag officials in Mexico contained some interesting insights about that market, reports Steiner Consulting Group, DLR Division, Inc.

To be clear, these are not official numbers from USDA, which means they have not been reviewed and corrected by USDA staff in Washington. It is our opinion that the ag market information for Mexico is more opaque than what we find either in the US or Canada so the updated reports from our embassy staff are always welcome.

Below are some of the highlights from the latest report (you can see the entire report here):

The Mexican pork industry has been expanding in recent years, following the same trajectory we have seen in the US and Canada. Hog inventories at the start of 2017 are estimated at 10.7 million head, almost 8 per cent larger than a year ago.

The Mexican sow herd at the start of the year was projected to be 1.210 million head, +2.5 per cent higher than last year and the largest breeding stock in more than 20 years. The larger breeding herd implies a continued increase in the pig crop, which is projected to be 19.8 million head, +3.1 per cent higher than in 2016.

Despite domestic supply increases, pork consumption in Mexico continues to outpace supply availability, hence the need for increased imports. One reason is that pork and chicken remain significantly cheaper relative to beef (see chart).

Pork consumption in 2017 is forecast at 2.360 million MT (carcass wt), 8.5 per cent larger than it was in 2015. Higher imports have accounted for 65 per cent of the increase in consumption in 2016‐17.



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