Mexican broiler production continues to increase and is being driven on the supply side by the industry being rationalized by vertical-integration and driven, on the demand side, by stronger consumer demand, according to this week’s “International Egg and Poultry Review” from USDA’s Agricultural Marketing Service.Mexican broiler production is expected to reach 2.9 million metric tons according to a recent estimate revised upwards from USDA’s Foreign Agricultural Service (FAS). The rise is attributed to the growing prevalence and importance of increased industrial and commercial integration to satisfy domestic consumers with better and more affordable products (for example, ready-to-cook, marinated products), and the industry’s establishing additional retail points of sale.
Despite the forecast in production increases, Mexico’s broiler industry will have to contend with high grain prices, increased competition for feed from the pork and beef sectors, and the worst drought on record in 70 years affecting 19 of 31 states. Vertical integration will help offset some of the negative effects of high grain prices. It is estimated that feed costs represent between 75-80 percent of total production costs. In 2011, average feed costs ranged from 13 to 18.2 pesos per kilogram (US $0.47 to $0.66 per pound).
Broiler meat consumption in 2012 is projected slightly higher than FAS previously estimated as consumer demand remains strong. Broiler meat continues to be one of the most affordable proteins, especially dark meat (that is, chicken leg quarters), behind eggs for low-income consumers. Generally, households with higher incomes prefer higher value cuts and value-added products. Domestic broiler meat prices have increased 20 percent in the first quarter of 2012, along with pork and beef prices. As a result, poultry meat consumption is expected to remain stable.
Broiler meat was marketed as follows in 2011: 31 percent live chickens, 24 percent for roasting purposes, 20 percent for distribution in public markets, 15 percent marketed in chain stores, 7 percent sold as cuts, and 3 percent marketed as value-added products. It is estimated that broiler meat sales will follow a similar trend in 2012 with the exception of live chicken sales climbing to 33 percent, the report said.
Imports of broiler meat are forecast for Mexico to be slightly higher in 2012 (630,000 tons) as increased domestic production is not expected to fulfill domestic consumption. Mexico continues to aggressively market broiler meat exports to other markets primarily located in Asia and Central America, especially high value processed products and lower value broiler cuts.
In a related export news, USDA’s export forecast for Mexico for 2010, 2011, and 2012 were revised downward to reflect the removal of certain chicken parts not considered broiler meat manifesting in Mexico’s export trade statistics. In particular, Mexican trade data have been reduced for exports to Vietnam, Hong Kong, and other Asian markets that most likely included chicken paws. Unofficial forecasts predict 2012 broiler exports to be 9,000 tons.
