Mexico is among the three largest pork importers in the world, relying on imports to meet nearly 50% of the country’s demand. Close to 90% of Mexico’s pork imports come from the US.
Mexico’s imports of US pork set records for both volume (1.1 million mt, up +14%) and value ($2.35 billion, up +15%) in 2023. While pork muscle cuts accounted for more than 85% of the export volume to Mexico, pork variety meats posted impressive gains in 2023, climbing +28% to 159,508 mt, valued at $302 million (up +34%), according to the U.S. Meat Export Federation (USMEF).
US pork exports to Mexico in December alone climbed +17% year-over-year to 105,451 mt, breaking the previous monthly record (October 2023) by 5%. That strong pace has continued in 2024 with January pork exports to Mexico up +6% and the second largest on record, trailing only December 2023.
Mexico recently issued a decree extending zero-duty treatment of certain food imports – including pork – from all eligible suppliers through the end of 2024. US products, however, are already zero duty through NAFTA and USMCA, so the policy, in place since May of 2022, has mostly benefited other suppliers, such as the EU and Brazil. Interestingly, the US share of Mexico’s pork imports has still continued to climb.
When Mexico first announced its duty-free effort in 2022, followed by its approval of Brazil’s pork later that year, there were not surprisingly some concerns that US exports would suffer. According to USMEF, Mexico’s pork duty exemption mainly benefited the EU and Brazil due to existing US trade agreements.
Shipments from a handful of inaugural Brazilian pork plants began in February of 2023 and had worked up to around 5,000 metric tons a month. However, late last year a court ruling resulted in a temporary suspension of Brazil pork. The case stemmed from a petition by the Mexican Swine Breeders Association that raised phytosanitary concerns. Previously, Mexico had long-standing bans on both beef and pork imports from Brazil due to concerns over foot-and-mouth disease (FMD) in the country.
USMEF says that while Brazilian pork made some inroads into the Mexican market, it was difficult for the country to compete with US supplies head-on. That’s because 90% of US exports are chilled.
“For the U.S., we obviously have tremendous advantages given our proximity and long history in the market, specifically our ability to ship fresh, chilled, bone-in hams and shoulders into Mexico,” explains Erin Borror, U.S. Meat Export Federation (USMEF) vice president of economic analysis. “So our share of total exports of pork to Mexico actually increased from the prior two years to 84%.” Borror adds that Brazil products were mainly taking market share from Canada and Europe.
That’s good news for US pork producers as Mexico’s ban on Brazilian pork is expected to be lifted sometime this year. Brazil, already the fourth largest global pork producer, is also expected to continue growing its pork industry with pork production in 2024 forecast to grow +5%. Brazil producers also benefit from having one of the lowest costs of pork production.
At the same time, new environmental policies in the European Union are expected to impact regional pork production and reduce growth of the bloc’s exports. USDA projects that in 2024, EU pork exports will be down -25% compared to 2019. USDA expects EU production will continue to suffer under regulatory burdens, noting that “EU veterinary medicine regulations as well as forthcoming animal welfare legislation have created uncertainty for producers, disincentivized investment, and increased production costs.”
Bottom line, even with competition from Brazil possibly resuming, the US is well positioned to remain the dominant pork supplier to Mexico. What’s more, US exports overall could gain market share due to pressures on the EU’s pork industry. USDA’s long-term projections see US pork exports climbing +34% from an expected 6.95 billion pounds in 2024 to a projected 9.34 billion pounds by 2033. By 2026, U.S. pork exports are expected to surpass the previous record of 7.28 billion pounds set in 2020, when import demand in China spiked at the height of China’s African swine fever epidemic. (Sources: USDA, National Hog Farmer, Pig Progress)
