Despite disease issues, the 2015 Mexican pork production forecast is 1.290 MMT CWE, which is higher than the 2014 estimate due to lower feed costs, the continued incorporation of new breeding lines, better farm management techniques. This overview is from the USDA’s Global Agricultural Information Network (GAIN).
“The 2014 production estimate is revised marginally lower, mainly due to the aftereffects of Porcine Epidemic Diarrhea (PED) in Mexico…Currently, industry members are expected to strengthen and expand the productivity of nearly 5,600 farms to be able to take advantage of expected better margins, with lower feed costs and expected increases in domestic prices. They will also seek to meet anticipated demand for pork cut exports for the Japanese and Korean markets as well as the potential opening of the Chinese market.
Porcine Epidemic Diarrhea (PED) virus Still Present
The report stated that according to private and official sources, PEDv hit some of the major producing areas of the country in 2013. Even though PEDv is not a reportable disease, Mexico reported in late May that the virus was identified in 17 out of 19 producer states. “Currently, commercial farms in
Mexico are implementing improved biosecurity measures to control the spread of the disease,” stated the report. “Virus control efforts to date are one of the leading causes for Post to project its loss forecast for 2015 lower than the loss estimate for 2014. Current year loss was revised slightly upward, given that improved biosecurity measures not yet fully implemented in all major farms.”
Improved production practices, an increase in the national breeding herd, and continued improvements in biosecurity measures to control the prevalence and spread of the virus, support the move to increased production in the mid-long term.
Better Genetics, Attractive Grain Prices Allow for Heavier Weights
“Post is forecasting slightly higher pork meat production in 2015, as swine operations will carry animals to heavier weights and continue to introduce better genetics,” states the GAIN report. “These sources report that swine are usually held in feedlot operations for around 50 days, but given the PEDv presence in affected areas, operators are extending this period 7 additional days in order to gain the desired market weight. It is not clear how successful this strategy will be, as the producers have stated a goal of sending hogs to market at 130kg to help support production.”
Packers, however, don’t know if producers can meet this level, according to the report. Despite the recent trend of low international grain prices caused by expectations of increased world production of sorghum and corn, feed remains the greatest component of pork production costs. As previously reported by GAIN, feed (corn and sorghum) represents approximately 64 percent of the production cost.
Pork Gains Acceptance among Mexican Consumers
The GAIN report says retailers are trying to hold prices unchanged to attract more consumers, despite increased costs for biosecurity and animal health measures, according to industry sources. Nevertheless, pork prices have risen since mid-year, particularly since pork is still more attractive for the low-medium income consumers compared to other animal protein.
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