USDA forecasts higher chicken meat production, consumption, and imports in 2022 as Mexico’s economy recovers and chicken meat for processing and the HRI channel grows, according to USDA’s latest GAIN report.
Since 2008, Mexico expanded domestic poultry production and imports, lowering relative retail prices, and boosting consumption. As household food expenditures rise, processed chicken meat products remain the most affordable and versatile source of animal protein for Mexican consumers. Chicken meat accounts for nearly 60 percent of total muscle meat demand in Mexico. The United States remains Mexico’s leading provider of chicken due in part to the expiration of third-country tariff-rate quotas benefiting Brazil and Chile in 2019.
International and domestic animal processors value Mexico’s poultry market and are competing to expand their presence in Mexico in terms of overall volume, distribution at Points-of-Sale, and broad coverage of product offerings. In 2009, JBS gained a majority stake in Pilgrim’s Pride, Mexico’s second-largest poultry processor. In 2015, Pilgrim’s Pride acquired Tyson Foods’ business operations in Mexico. In 2021, JBS offered to extend its stake from 80 percent to full ownership of Pilgrim’s Pride. In 2021, Pilgrim’s Pride also announced that it will launch a research and development complex in southern Mexico to further develop value-added product lines for prepared foods targeting retail and HRI distribution channels. Separately, Cargill and Continental Grain recently announced the acquisition of Sanderson Farms, a U.S. poultry producer which generated about four percent of its net sales to U.S. distributors who exported Sanderson Farms’ products to Mexico.
Post forecasts chicken consumption to reach 4.767 billion MT RTC in 2022, up about two percent from 2021. USDA assumes this forecast based on the following reasons:
- Chicken offers value to families facing high inflation and an uncertain economic outlook;
- Increase in domestic demand as the Mexican economy is likely to recover by 3.5 percent in 2022, after a downturn of around six percent estimated in 2021;
- Retail grocery demand remains strong even after stay-at-home orders lapsed;
- Continued growth among Quick Service Restaurants (QSR) offering chicken menu items;
- Chicken meat for processing into processed meat such as cold cuts, ready-to-eat frozen foods, and convenience products is growing; and
- Food service demand is improving as the economy slowly reopens; boneless breast prices have moved higher in response to strong QSR demand.
