16 June 2023

2 minute read

By: Fernando Ortiz

North America

Last week we attended the World Pork Expo, as we do every year. However, in this year's version, the almost total absence of Mexican pig producers was notorious. Mexico, like its neighboring colleagues, the United States and Canada, has not escaped the price crisis in the domestic market of its pork industry, and we believe that this has been the main reason why many independent producers did not attend the international event in Des Moines, Iowa.

Even though the price has managed to recover slowly thanks to the fact that fewer, lighter hogs are reported on the market, a revival in domestic demand and a registered contraction of 33% in the volume of fresh pork imported from the US in the last week. We have also been informed of liquidation of sows in Mexico, because of the losses in the business and as an alternative factor to a potential push to the rise of the tide in the future market price index for hogs.

The national weighted average price increases by 7.50% liveweight weekly, with $0.85/lb., while the carcass price remains at $1.23/lb.

Mexico Last 6 Months Prices

• Minimum $0.60 USD/lb
• Maximum $1.37 USD/lb
• Average $1.00 USD/lb

Sonora and Prop 12

Sonora is the second largest pork producing state in Mexico, with 308,499 MT surpassed only by Jalisco, which in 2022 generated 399,562 MT. Sonora is also a pork exporting state to Japan and the US.

Pork producers from the state of Sonora expressed that because of the ratification of California Proposition 12, Mexican pork exports to the United States could be harmed, since their swine production system does not comply with the guidelines of the new regulation. This situation would have a negative impact on the economy of the state, since around 10,000 tons of pork are available annually for the US, only from Sonora, which results in an income of more than 43 million dollars.

This situation could also lead to a greater supply of pork in the domestic market, to redirect the product that will not be marketed in California, causing an oversupply and financial losses for producers, accentuating the crisis that the sector is already experiencing.

Sources

With information from the Market Consulting Group, Porcicultura.com and other sources