Background Banner

Defending U.S. Pork's Hard-Fought Market Share in Mexico

Published: Jun 11, 2018
00:00 / 00:00

You may download the audio file here





In response to U.S. duties on imports of steel and aluminum, Mexico has imposed a 10 percent retaliatory duty on all chilled and frozen pork cuts imported from the United States, as well as a 15 percent duty on sausages and a 20 percent duty on some prepared hams. The 10 percent duty rate on pork cuts will be in effect until July 5, at which point the rate is set to increase to 20 percent. Mexico’s Ministry of Economy also opened a 350,000 metric ton duty-free quota that is aimed at attracting pork cuts from other sources, including the European Union. (Canada and Chile also have pork plants eligible to ship to Mexico, but these products already enter duty-free under NAFTA and the Chile-Mexico Free Trade Agreement.)

U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom says that despite these obstacles, the U.S. pork industry will vigorously defend its share of Mexico's growing pork market and continue to pursue new opportunities for U.S. pork products in Mexico. He notes that Mexico's per capita pork consumption has increased rapidly in recent years, thanks in part to the strong business relationships between U.S. suppliers and Mexican importers, processors, retailers and restaurant operators.

Mexico is the largest volume destination for U.S. pork exports. Through April, U.S. pork and pork variety meat exports to Mexico are on a record pace, totaling 282,675 metric tons valued at more than $500 million.

More details on Mexico's retaliatory duties and the duty-free quota are available in this USDA GAIN Report.

If you have questions, please email Joe Schuele or call 303-226-7309.

TRANSCRIPT:

Joe Schuele: Mexico is the largest volume market for U.S. pork and exports are on pace for another record in 2018. Retaliatory import duties and a duty-free quota for other suppliers could get in the way of that, but in this U.S. Meat Export Federation report, President and CEO Dan Halstrom says the U.S. industry won't give up pork market share in Mexico without a fight:

Dan Halstrom: Effective June 5, it was announced that U.S. pork would receive an inbound duty into Mexico of 10 percent. In July it was up to 20 percent and most of the muscle meat cuts, primarily hams and picnics, going to Mexico would be impacted. It's obvious that with the establishment of a duty-free quota for the supply sources outside the U.S., this will obviously be an advantage for Europe and some other places. That being said we have a wonderful, longstanding relationship with Mexico. We've had the vast majority of the pork imports over the years. A lot of that has to do with not only with NAFTA and the zero duty, a lot has to do with the supply structure that has been set up specifically the ability to export fresh raw material for further processing down in Mexico. So we are going as an industry to do everything we can to maintain that relationship and grow it. There's a lot of goodwill built up over the years and the U.S. industry, packers, exporters etc., are not going to give that up easily.

Joe Schuele: Halstrom explains some of the factors that have made U.S. pork such a success in Mexico:

Dan Halstrom: You know our quality, our consistency, our price competitiveness — we're seeing more acceptability within Mexico and growing demand with the growing middle class. Per capita consumption is growing at a dramatic rate, especially the last six or seven years, so I think this is a testament to the fact that not only are they comfortable with our products, but they demand our products.

Joe Schuele: For more information, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.

###


The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations.