2014: Good, Bad & Ugly News

May farm grain prices forecasted were: 1. corn at $3,870Mx/Ton ($292 USD), 2. Sorghum $3,260 Mx/Ton ($246 USD) and 3. Soybean meal $8,440 Mx/Ton ($637 USD). The life slaughter price for Mexico City metropolitan area is $28.86 Mx/Kg ($2.18 USD/Kg). Mx:USD exchange rate during the last week was $13.24 Mx:1.00 USD. Average production cost during the last 30 days was $ 18.50 Mx/Kg, obtaining $10.36 Mx/Kg as profits/Kg or $1,200 Mx per slaughter pig (more than $90.00 USD), maintaining the same profits as they had before the Holy Season.

The Mexican Pig Producers Council (MPPC) had a meeting with Senators and members of the Secretary of Economy who are in charge of the Livestock Commission. The main topic was related with the approved of new Free trade agreements and the risks the Country would have with the introduction of new PED viruses due the scarcity of hogs in the slaughter plants. The pig producers guarantee the supply of hogs according with the Country needs?

The General Coordinator of livestock of the Secretary of Agriculture mentioned the damages caused by PEDv will be less than 3 per cent of the Mexican production and this situation will not affected the Mexican pork meat supply.

According with non-official figures and due to sanitary issues, such as PEDv in North America, a severe contraction in hog supplies is expected.

The Mexican macroeconomic environment expected to recover gradually in 2014 after a slow GDP in 2013 of 1.1 per cent. The original GDP fixed by the government was of 3.9 per cent, but the last growth forecast for the Private sector was in 3.09 per cent, almost 21 per cent below government original budged with expectations to achieve less than 2.9 per cent at the end of the year. That means Mexico is in Economic Recession.

Despite all changes made during 2013 in the Mexican Constitution, but those have not been implemented yet because the secondary legislation has not been approved and the Mexican Peso becomes the most tradable and liquid currency of all emerging markets. The Mexican Peso exchange rate against USD could finish 2014 at 12.8 Mx/USD, 3.75 per cent re-evaluation compared with May 2014.

During the 2nd Half of 2013, PEDv affected basically States located in the Northwest and Central Mexico. We do not know the new states that will be affected by PEDv. Due the trend of this problem, will be almost impossible to predict the economic impact of this disease at the end of this year, but by the end of this year, and considering a base case scenario hog slaughter will decline between 8 to 10 per cent of the total hogs slaughtered during this year.

Meat imports needs during 2014 are expected to grow between 12 - 13 per cent compared with 2013, it means close to 100K extra metric tons, but the main problem will come from the meat contraction in the USA due the same PEDv problem suffered by them.

The Statistics National Institute presented the average total expenses as percentages of total income during 2012 were: 22.6 per cent-Meats; 19.2 per cent–Cereals; 11.4 per cent-milk and sub products; 11.1 per cent-vegetables; 9.7 per cent-Different kind of beverages; 8.9 per cent-Other meals; 4.4 per cent-fruits; 4.2 per cent-eggs; 2.3 per cent-fish & seafood and 6.3 per cent-others.

Related with the pork meat consumption preferences during 2013, 72 per cent preferred National meat, 2.3 per cent imported meat and 25.5& indistinct.

Related with the place to buy the pork meat, 45.8 per cent buy in Super market chains and 54.2 per cent in public markets.

The Farm and Food Discovery Center (Manitoba University) presented in 2013 a reference related with weekly food expenses in a Mexican family (Morelos State) of $172 USD.