USDA International Egg and Poultry
12 December 2012
USDA International Egg and Poultry: Mexican Poultry and Egg Sector
The Mexican poultry industry is recovering from the outbreak of highly
pathogenic avian influenza (HPAI) H7N3 that was detected in June
2012. As of November 16, it has been more than 90 days since its
most recent detection of H7N3 commercial egg-layer flocks.
During the outbreak the National Service of Health, Food Safety, and
Food Quality (SENASICA) surveyed 513 farms (271 layers, 200
broilers, and 42 breeders) for the H7N3 virus and detected it only on
44 layer farms in the state of Jalisco. The source of the outbreak was
not definitively determined, but Mexican officials report that the
source likely was wild and/or migratory birds or waterfowl. The
outbreak resulted in the death or culling of around 22.4 million layers
and, according to Mexico’s poultry and egg industry organization
(UNA), reduced national egg production by 15% for calendar year
2012.
Mexico is considered to have the greatest per capita consumption of
eggs in the world and the high level of egg consumption coupled with
the production decrease and HPAI-related market speculation pushed
egg prices higher for all major population centers. UNA reported that
industry members attempted to maintain supplies and dampen the
price spike by reducing or eliminating egg and egg product exports
while also extending egg-layer production cycles to between 125 to
128 weeks. Still, prices more than doubled during the outbreak and
are still hovering more than $0.50 per kilogram (kg) greater than the
same period one year ago whereas US egg prices in dollars per
dozen are virtually unchanged from the same period last year. In
response, Mexico opened its market more broadly to imported eggs.
Most egg imports as a result of the AI outbreak did not get into full
swing until September. US shell egg exports to Mexico totaled
1,998,343 dozen for January-August 2012; in September alone the
US exported 7,890,121 dozen eggs.
Mexican authorities and industry members indicate that egg prices
(both farm-gate and wholesale market) have stabilized albeit at levels
greater than before the outbreak. The pre- and post-incident prices
are considerably different in Mexico while prices in the US are
similar to one year ago. In addition to disrupting the general supply
and demand of Mexico’s egg market, escalating prices pushed
Mexico’s Foreign Trade Commission (COCEX) to refrain from
imposing antidumping duties on imported US-origin CLQs. US
CLQs remain a low-cost protein source for many Mexican consumers
and are much cheaper than their Mexican equivalent CLQ as feed
grain input costs and consumption preferences between the countries
differ significantly.
At the time when COCEX and the International Trade Practices Unit
(UPCI) of the Mexican Secretariat of Economia announced that
antidumping duties would not be imposed, the government bodies
indicated that they would be monitoring prices and could impose
duties when market circumstances dictated. As of November 28, 2012, the Mexican Government has not imposed any duties on
US CLQs, but the issue remains active as the US industry
appealed the decision to the NAFTA Secretariat and the Mexican
industry filed the equivalent of an injunction to overturn the decision
to refrain from imposing duties.
There is a significant markup on CLQ prices at Mexican wholesale
markets over imported chilled or frozen US CLQs and even
US0-based domestic bulk CLQ prices. The Mexican wholesale
markets could both sell imported and domestic origin CLQs; US
industry sources report that these markets carry negligible volumes
of US origin product and that the prices generally reflect Mexicanorigin
product prices.
Imported products are always cheaper than Mexican origin product
by a significant degree and virtually always more expensive than
US domestic recorded CLQ prices. Interestingly, US imported
CLQ prices are often less expensive than even Mexican wholesale
market egg prices.
Source: USDA FAS GAIN Report MX2087; Department of Commerce, US Census Bureau, Foreign Trade Statistics; World Organization for Animal Health (OIE)
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