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Mexico Hog Market

04 January 2016
Genesus - The first power in genetics

MEXICO - The Slaughter price in the Mexico City Metropolitan Area during 2015 has had important fluctuations, starting the year with an average slaughter price of $0.8053 USD/Lb ($27.05 Mx/kg), and ending the year with an average slaughter price of $0.5946 USD/Lb ($24.14 Mx/kg). 26.16% price reduction in USD terms, and with an annual average price of $0.6398 USD/Lb ($23.21 Mx/Kg).

Another important point was the average production cost that was at $0.5779 USD/Lb ($20.00 Mx/Kg) during the first half of the year and at $0.5666 USD/Lb ($21.50 Mx/Kg) during the second half. 2% less in USD terms but 7.5% higher in Mexican pesos’ terms.

Line: Price Trend Two Lines: Production Cost/Kg

The main reason affected the production cost increase was related with the Mexican peso devaluation due the need to imported raw material (grains) from different Countries, basically from the US.

If we analyzed these two factors independently, we can observe the industry behavior and instability in the next chart.

The Mexican pig industry reality by region is completely different than the results showed in the average Mexican pig industry. The production cost is almost the same everywhere, but the slaughter price is different in each region of the Country, depending on: Pig production Region, how close or far is the production area located from Mexico City Metropolitan area and the pig meat consumption per capita in the region.

2015 Operating results by geographical Country Zone

As we can observe in the previous chart, we have in Mexico 4 different regions with different margin conditions.

  1. NW Region (Sonora, Sinaloa); basically in this region the pig producers have had big losses during the year due the low slaughter price affected basically to the long distance to Mexico City and low pig meat per capita consumption. In the other hand, this region has the highest integrated pig industry in the Country and they exported high percentage of their pig meat production.
  2. Central Region (Michoacán, Jalisco, Guanajuato and Nuevo Leon); Zone where the margins per slaughter pig were between $11.00 to $17.00 USD. This Region has good pig meat per capita consumption and close to some large metropolitan cities, like Guadalajara, Leon, Morelia, etc.
  3. Mexico City Metropolitan Region (Querétaro, Puebla, Veracruz); In this region the pig producers obtained the highest margins per slaughter pig, achieving between $28.00 to $36.00 USD. This region has a good pig meat per capita consumption and supply pork meat to more than 45 million people (40% of Mexico´s population)
  4. SE Region (Yucatan, Campeche, Quintana Roo and Chiapas) This region has the highest pork meat per capita consumption in the Country, with a total population close to 9 million people. Yucatan industry is almost completely integrated and they have a strong position in the export markets.

In March, the pig industry suffered the worst moment of the year, selling each pound at $0.4895 USD when the production cost was at $ 0.6029 USD, loosing $29.00 USD per slaughter pig.

As we can understand, with the information showed in this article, the pig industry during 2015 has had a terrible negative year in some regions, and also has been a good year in other regions. According with this information anyone could infer the average Country slaughter price situation according with the slaughter prices presented in Guanajuato State (Center), independently the high slaughter prices fluctuations happened in the Country.

Mexico has almost 2 million square kilometers and more than 112 million people with different pig meat consumption by region.

Genesus Mexico wish you a Happy New Year 2016!!!!!!!!!!!

To find out more about Genesus Genetics, please take the time to visit their website at .

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