Mexico Market Report

Mexico and most of worldwide emergent countries estimated their currency stability after the final FED announcement related with the new interest rates policy, but unfortunately this announcement was just temporary until the end of this fiscal year.

The Mexican Peso/USD exchange rate buying directly in Banks close Nov 6th. 2015 at $17.15 Mx/USD.

The Central Bank of Mexico didn’t make any adjustment to the interest rates. The Mexican Peso has had 28.27% devaluation since January 2014 against the American currency.

The inflation rate has been of 6.7% during the same period, existing 22 percentile points difference between these two concepts (See next Chart) and we don´t know yet what exactly are going to be the negative consequences in the Mexican economy and basically in the pig industry sector.

The trend and macroeconomics assumptions continue indicating the Mexican Peso would close 2015 below $17.00 Mx. per USD. Do you believe this assumptions?

The cost of production in the pig industry has been maintained almost constant in spite of the exchange rate fluctuations. We can mention the production cost per pound fluctuate between $0.5253 to $0.5516.

Current Liveweight Price in some Mexican Regions

(USD per pound and Mexican Pesos per Kg.(November 6th. 2015)

In the previous chart you can observe a slaughter price difference between the highest (Puebla) and lowest (Sonora) prices of $0.1182 USD/Lb ($4.50 Mx/Kg).

Actually in the metropolitan area of Mexico City, the National slaughter price was $0.6041 USD/Lb ($23.00 Mx/Kg) and for the Imported animals in Missouri USA at $0.3850 USD/Lb. ($14.34 Mx/Kg), but the same product in Mexico City at $0.5287 USD/Lb ($20.13 Mx/Kg), so the difference between them is $0.0754 USD/Lb ($2.87 Mx/Kg) or 12.48% lower the imported slaughter pig vs. the national pig.

During last week´s the slaughter price has presented a decreasing trend in Mexican Peso and in USD as a consequence of the lower slaughter prices in the US and Canada.

The pig industry economic situation has been very though during the last weeks owing to the actual slaughter prices. The pig producers in the Country have had variable results related with the region where they are located or where they sell their production and also related with their own production cost.

Profits/Losses per slaughter pig at 255 Lbs (115 Kg)

The results showed in the previous chart are considered as direct results with an average production cost per pound of $0.5384 USD ($20.50 Mx/Kg).

It was celebrated from October 28th. To 31st. in the Riviera Nayarita, Nuevo Vallarta the IV Country Pork Producers Confederation National Congress (OPORPA). This Congress had more than 800 pig producers’ attendant, where were discussed a lot of interesting talks related with the main issues in the industry. Congratulations to the organizers and staff who made an excellent event.

Trans Pacific Partnership (TPP)

• Mexico will extend duty exemption to more Countries tan those who signed a previous Trade Agreement.
• The TPP members are: Brunei, Chile, New Zeeland, Singapore, Australia, Canada, Japan, Malesia, Mexico, Peru, USA and Vietnam (12).

Economic Projections 2015

• The Mexican GDP growth Expectations from the International Monetary Fund observed a new general reduction to 2.3%
• World Bank: 2.35%
• Mexican Government (IRS) 2.4%
• Mexican Central Bank: 2.15%
• Private Sector Specialist: 2.29%

World Health Organization (WHO)

• Presented a release where say red meat and processed meat predispose appearance of colon cancer.
• General disagreement from all different sectors related with the meat industry related WHO release.
• The Latin-American Animal Protein Council (COLAPA) supported red meat nutritional benefits, they considered claims related with red meat and processed meat as carcinogens or red meat as a factor to catch cancer are out of order.

Genesus México We continue with great success the delivery of semen doses from our new A.I. Stud in partnership with Semen Cardona México, were you can ask for semen from two maternal lines (Yorkshire-Genesus and Landrace-Genesus) and Genesus terminal Line (Duroc-Genesus).

The pig producers who started to use in their farms Genesus semen are experiencing the genetic improvement offered by Genesus.