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USDA International Egg and Poultry

15 February 2012

International Egg and Poultry Review: MexicoInternational Egg and Poultry Review: Mexico

Mexico is experiencing the worst drought on record in 70 years of recording.
USDA International Egg and Poultry

About 19 of its 31 states have been affected, however the hardest hit have been Coahuila, Chihuahua, Durango, San Luis Potosi, and Zacatecas. President Felipe Calderon signed a “Decree for Actions to Mitigate the Drought that Several Entities are Experiencing” in January 2012 providing about $2.4 billion dollars in aid to ensure drinking water and basic food requirements effective January 25, 2012. The effects of the drought have been compounded with recent freezing temperatures. The weather pattern responsible, also known as La Nina, has affected leading grain producers and exporters Argentina and Brazil, as well as Paraguay and Uruguay. Likewise severe drought conditions have affected the southern US. Significant losses for both grain and livestock production are anticipated.

January 19, 2012 Mexico’s Secretariat of Economy (SE) issued a preliminary determination of its antidumping investigation on fresh, chilled, or frozen US chicken leg quarters (HS0207.13.03 and HS0207.14.04) exported to Mexico. Sufficient evidence was found to indicate dumping conditions existed on US imports of chicken leg quarters. SE announced the investigation would continue without the imposition of any provisional compensatory duties as both parties declared interest in a conciliatory process. However SE revealed the price discrimination margins for some producer/exporter businesses to be between 62.90% and 129.77%. Other exporting businesses will be applied to the same residual price discrimination margin of 129.77% as there was insufficient information to calculate specific dumping margins. The SE-UPCI (International Commercial Practices Unit) has until March 1, 2012 to gather sufficient data and submit its final resolution. In the meantime, the conciliatory process will continue parallel to the SE-UPCI. The investigation was conducted in response to a petition submitted July 2, 2010 to UPCI by Bachoco, Patsa, and Buenaventura. Despite the investigation and severe drought, Mexico has become one of the US’s largest and fastest growing trading partners, especially for poultry. Based on data, total US broiler meat exports to Mexico have increased 88.9% since 2007 and 23.7% since 2009. Whereas exports of leg quarters to Mexico under HS0207.140.010 have increased 210.2% since 2007 and 38.7% since 2009.

Recently, Mexico declared itself as free of Exotic Newcastle Disease and OIE reports the incidents as being resolved. The outbreak was reported on some broiler farms in the states of Jalisco and Aguascalientes in November 2011. About 900,000 birds were destroyed and the appropriate measures taken. No new incidents have been reported. On another note, Mexico lifted its import ban on live poultry, poultry products, and by-products from Polk County, Missouri in December 2011. The ban had been in place since April 2011 after reports of low pathogenic avian influenza (H7N3).

SENASICA, Mexico’s National Service of Health, Food Safety, and Food Quality, issued new Letterhead Certificates to accompany imports of raw poultry (fresh), poultry offal (other than organs), raw poultry offal (organs), thermally processed poultry, poultry edible fats, processed egg products, poultry dried meat, and poultry bacon effective December 15, 2011. The new certificates are in compliance with the zoosanitary requirements of the new HRZ system (MCRZI).

Source: USDA FAS/OIE/News Wires

National Mechanically Separated Chicken

Prices for all fat contents trended steady to weak. Supplies are moderate to heavy. Schedules normal. Domestic demand is light to moderate at best. Export demand is moderate. Frozen 15-20% MSC continues to capture most buyer interest, especially into export channels; however many suppliers are noting more resistance to current asking prices. The spot marketplace is sluggish and reflective of more tradit ional seasonal patterns. Higher priced finished goods continue to get resistance and pushback from retail levels, resulting in fewer orders, larger inventories of finished goods, reduced contractual supply needs, and more spot availability of MSC and frames. Suppliers reacted utilizing a variety of options. Some expect the marketplace to remain slow with some slight uptick in demand before the start of Lent in coming weeks. Industry maintains a close eye on things waiting to see when and where it will settle. Market activity slow to moderate. Raw material supplies moderate. Spot frames traded between 10.5-16 cents FOB.

National Young Turkey Parts

The market on bulk parts was steady. Demand and offerings were light to moderate. The market on white meat is steady to weak. Demand was light to moderate. Offerings were moderate to heavy. Thigh meat market was steady. Demand and offerings was light to moderate. Trading for all parts was slow to moderate with improved interest from export destinations noted. For domestic: fresh breast trim 114 cents, frozen hen breast meat 197 cents, plant grade breast 20 lbs. up 170 cents, fresh full-cut wings 68 cents, fresh tom necks 47 cents and fresh tails 49-50 cents. For export: fresh tom drums 72 cents and frozen tom necks 51 cents delivered to border.

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