The National Pork Producers Council continues to press the Mexican government to put off implementing a policy that would prohibit the United States from shipping pork to Mexico via large combo containers — a policy that could have devastating financial implications for the U.S. pork industry.
NPPC met last week in Dallas with Mexican pork industry leaders and the leadership of the Mexican Meat Council. NPPC pushed hard on the combo issue and got commitments from these organizations to raise the issue with Mexican government officials. Combos are large container boxes weighing between 2,000 and 2,200 pounds which allow for bulk shipment.
NPPC was contacted Friday evening by Economia (the Mexican counterpart of USTR) and was told that the new policy would apply only to frozen combos. USDA told NPPC Monday that Mexico has asked FSIS to allow it to review how the U.S. handles combos from Canada as a potential condition of a compromise on frozen combos. While progress has been made, NPPC continues to push hard politically with the transition team, the Congress, and through various means in Mexico City.
If the policy banning the use of combos for all products shipped to Mexico is put in place, it would cause live hog prices to fall by nearly $6 per head, according to Iowa State University economist Dermot Hayes. The U.S. meat industry began shipping products to Mexico in combo bins about 15 years ago at the request of the Mexican meat processing industry.
Today approximately 80 percent of pork, 70 percent of poultry, and 10 percent of beef is shipped in combo containers. The production lines of many important Mexican customers are configured to work only with combos. The new policy would require small boxes to be stacked on pallets.
Mexico is one of the top destinations for U.S. pork exports. From January through October 2008, U.S. pork exports to Mexico totaled 307,056 metric tons valued at $549.6 million, increases respectively of 38 percent and 52 percent over the same period in 2007.