Mexico combats food inflation; U.S. red meat may see competition
Big question is whether Brazil will gain access for beef and pork, which Mexico currently bans due to foot-and-mouth disease.
The Government of Mexico recently issued a decree reflecting an agreement with a number of private companies aimed at reducing prices for basic foods, including some pork and beef cuts. The decree includes an effort to attract additional suppliers to the Mexican market, building on a decision earlier this year to suspend duties on most imports of pork, beef and poultry.
Mexico currently bans or restricts meat imports from certain countries based on animal health regulations and food safety standards. Erin Borror, U.S. Meat Export Federation vice president for economic analysis, explains that the decree initially raised serious concerns that these guidelines might be eased.
“Back in May, Mexico had announced they were eliminating all import duties for eligible suppliers on some products and that included beef and pork. But the latest decree takes a very interesting twist, again, aiming to reduce the inflationary impact on consumers looking, specifically at a basket of goods, which does include some beef and pork products, and one of the creative pieces appears to be an effort to allow imports from additional supplying countries,” Borror says. “Initially that raised a lot of concerns. Our immediate concern was ensuring that the Mexican authorities were still going to strictly enforce all animal health and food safety requirements. Our trade obviously goes both directions and you can’t have any risk introduced.”
While it now appears Mexico will continue to enforce these regulations, additional suppliers could still enter the market under certain conditions. Specifically, Borror discusses the potential impact of Brazilian pork and beef, which Mexico currently bans due to foot-and-mouth disease.
“Then the question turns to well, what can be the added competition in the market? Mexico does allow imports from a handful of European countries. Those are all countries that do not have African swine fever,” Borror says. “So really, the big question is whether Brazil will gain access for beef and pork. The fact that Brazil is not eligible goes back to foot and mouth disease. We allow, here in the U.S., imports from certain states in Brazil that have either FMD free or FMD free with vaccination status. If Mexico takes a similar track, then it would introduce more competition into the market, especially again, because at least for now, they’d be duty free.”
The USDA Foreign Agricultural Service recently issued a GAIN Report that includes an unofficial translation of the decree, which entered into force Oct. 20.
Source: U.S. Meat Export Federation, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.