Mexico offers U.S. pork producers a lot more than sunshine and tequila. There’s a customer base for U.S. pork, too.
Last year, the United States exported 218 million metric tons of pork to Mexico. The U.S. Meat Export Federation expects a 10 percent increase or more this year.
This positive trend favors the United States, but much work is needed to change Mexican consumers’ perception of pork. “Pork is probably the preferred meat in terms of taste and flavor,” says Homero Recio, USMEF’s western hemisphere vice president. “However, many consumers believe it is bad for you.”
A common phrase in Mexico is: “You’re as bad as pork meat.” Hence, there is a need to work on pork’s image.
Some consumers believe that pork is dangerous. Recio notes that trichinosis and cystacircossis are still problems in the Mexican pork industry. About two-thirds of Mexican pork producers have modern facilities, but the other one-third are still considered backyard farmers where pigs are fed table scraps and root in the trash.
Incorrect cooking procedures still haunt Mexican consumers’ taste buds. “Consumers still want it well done, then a little more for good measure,” says Gilberto Lozano, USMEF’s director general, Mexico.
The definition of pork is another issue for Mexican consumers. For example, tenderloin, loins and smoked pork loins are considered pork in Mexico. However, two popular dishes, carnitas and tacos al pastor, are not considered pork.
Carnitas are made by deep frying a whole side of pork, including the ham, shoulder and ribs. Tacos al pastor is popular in many taco shops in Mexico. It’s made from the shoulder, cut thin and marinated in episota, then prepared like a gyro. Added in the tacos are pineapple, onion and cilantro. This is one way to have fresh pork in Mexico.
Pork Education 101
Educating Mexican consumers is a USMEF priority.
For starters, USMEF conducted surveys with Mexican consumers about their perceptions of U.S. pork. Overall, consumers felt hogs in the United States are well taken care of, which is a bridge to safe pork. They view U.S. production as a technological system where producers are concerned about animal welfare and produce a clean product. “This all plays well in Mexican consumers’ minds,” says Homero.
The National Pork Board is taking a similar approach in the United States with its El Cerdo es Bueno (Pork is Good) campaign. That’s because Mexican consumers living here still carry the same mindset that they did in their home country.
A second target area for USMEF is using nutritionists and health professionals to present a new pork campaign to Mexican schoolchildren. With families being the centerpiece of Mexican culture, it’s important to show mothers that pork is a healthful and safe protein for their children. The program includes developing mascots for a play that talks about healthful pork, having chefs and nutritionists visit schools to talk about pork and make pork dishes to sample.
Keying on schoolchildren is important since 45 percent of Mexico’s population is younger than 20 years old; 60 percent is younger than 30 years. This young generation can still be influenced about pork’s quality and safety. Also, this group has a much higher income potential than their parents and grandparents.
A third area of USMEF’s focus is the retail sector. “U.S. pork has a great future here, especially in the supermarkets,” says Recio. “U.S. pork retail sales in Mexico can still increase by 25 percent to 30 percent.”
Keep in mind that most Mexican consumers still consider fresh meat to be slaughtered the morning that it’s taken to the butcher shop or wet market for sale. They perceive that meat isn’t fresh if it’s been chilled.
“Up to 60 percent of consumers won’t buy meat at a grocery store because they have little confidence in its freshness and safety,” says Recio. “We’re conducting programs in hygiene and food safety to promote consumer confidence in retail stores.”
Paperwork Headaches and Red Tape
Besides consumer perception, there are other issues that need to be addressed to expand export opportunities. One involves a major issue of the North American Free Trade Agreement signed in 1993, which eliminated tariff quotas and snap-back duties for exports, but has challenged Mexican producers.
Many contend that U.S. pork is sold to Mexico at unfair prices. USMEF officials don’t agree with that assessment, but it hasn’t stopped the Mexican government from filing anti-dumping charges against the United States for various exports.
Lozano says the Mexican government feels pressure from local producers to manage trade between the United States and Mexico.
A Mexican government official acknowledges the U.S. industry’s ability to produce products at a lower price, but says it’s suffocating Mexican pork producers. He says that Mexico has lost half of its medium-sized pork producers.
Lozano adds that unlike the United States, Mexico is not free from classical swine fever but that central and eastern Mexico are in the eradication phase. “Mexican producers have to work hard to reach their goals at home so that they are disease free and can export to the United States,” he adds. “This is important because we also see that Mexican pork producers are an important market for U.S. soybean meal in the pig diet.” These are all issues that need to be worked out between the two countries.
One option is more standardization of the federal inspections systems in the United States and Mexico, but there plenty of obstacles to overcome in this area.
A step in the right direction occurred last fall when the American Meat Institute, the USA Poultry and Egg Export council, USMEF, ANETIF (Mexico’s federal inspection agengy) and Mexican processor organizations signed an agreement to work toward assuring that cross-border trade continues without interruption by harmonizing systems, standards and procedures between the two countries. This includes helping bring plants up to standards, electronic-document transfers and training. Since that time, Mexico has introduced a system similar to the Hazard Analysis and Critical Control Points used in the United States to keep the process moving forward.
When U.S. products arrive at the border, Sargapa officials (Mexico’s counterpart to USDA) re-inspect the products and check the paperwork. However, that’s where the problems occur.
“Most of the hang-ups with Mexico not accepting U.S. products is paperwork. It’s not a problem with the product,” says Walter Roesch, beef regional manager, Northern Mexico, USMEF. Less than 2 percent of all shipments are rejected due to unresolved paperwork problems.
These include such things as, signatures of USDA veterinarians not matching those on file with Sargapa. Someone may have signed the papers too quickly or it’s merely sloppy handwriting. Other holdups include lot numbers on the boxes that don’t match the paperwork or there are misspellings on the paperwork.
There’s also a shortage of inspectors for both countries, which can delay the border process. What’s more, most U.S. inspectors don’t speak Spanish and vice versa, making communication difficult. Mexico now has 25 inspectors that are learning English.
Exports Poised to Expand
Even with the challenges, U.S. pork sales in Mexico have the potential to grow. Nuevo Laredo and Columbia are the main ports for U.S. meat heading to Mexico. On average, 1,500 loads of meat go through these ports each week.
“There’s a lot of potential,” says Roesch. “Things are almost back to normal since the BSE and avian flu outbreaks. So far, we haven’t had any problems with pork.”
He says that Mexican producers need to find ways to send more value-added products to the United States to balance out trade, before it can grow further.
This trend is already starting, as U.S. pork packers are investing in Mexican packing operations. Smithfield Foods purchased shares in Norson, and is now exporting pork to the United States. Others include Sara Lee, Tyson and Pilgrim’s Pride. In addition, PIC provides seedstock genetics to pork producers in the Yucatan.
Another U.S. packer, Excel, exports about 60 loads of pork per month to Mexico, with one load equaling 40,000 pounds of meat, according to Juan Hernandez, regional meat consultant for the company.
“I see big opportunities in Mexico,” says Hernandez. “We have a great relationship with Mexican meat processors, and we’re trying to adapt products to Mexican demand. For example, Mexican consumers want bigger spareribs and bigger hams. We try to meet those needs.”
Excel’s top export product is ham, followed by picnics, offal, Boston Butts and bellies. He says the worst enemy in terms of export competition is the Asian market because it produces better margins than the Mexican market. Currently, Excel’s top clients are in Mexico City: Dipcen, Sigma and Le Viande.
Hernandez says U.S. packers will need to look at joint ventures with Mexican companies, either farming operations or packers, to make progress in the market.
Mexican wholesalers and distributors do prefer American brands to local brands, he notes. One niche market that Excel is looking to tap involves premium programs, such as their Tenderchoice line. It’s a tough market to crack because right now consumers are willing to spend more for premium beef than for pork.
Mexico does offer tremendous opportunities to grow U.S. pork exports, but it won’t happen on it’s own. The U.S. pork industry needs to promote its products in order for the borders to open up further, otherwise another country will do it.
Editor’s Note: The author visited Mexico on a trip sponsored by the U.S. Meat Export Federation and the U.S. Soybean Association.