US pork exports to Mexico may decline along with peso
Lower US hog prices may offset the drop in the Mexican currency.
USDA analysts warned that the declining value of the Mexican peso in 2017 could hurt US pork and poultry exports, along with other livestock product exports. They made that assessment in January’s “Livestock, Dairy and Poultry Outlook.”
Mexico is the largest destination for US pork, poultry and dairy products by volume. In 2016, Mexico imported 169 million pounds of pork from the US. US pork exports to Mexico increased from 138 million pounds in 2015, a rise of 22.7 percent.
However, the dropping peso could be offset by lower pork and poultry prices in the US, noted the analysts. Hogs are expected to be 15 percent lower in 2017, while broilers are forecast to be two percent less expensive. These lower industry prices may translate to lower prices at retailers and help maintain exports to Mexico, regardless of the value of the peso.
Forecasts for US pork supply
December 2016’s National Agricultural Statistics Service “Quarterly Hogs and Pigs” report recorded the largest national hog population since 1943, at 71.5 million head, up 4 percent from 2015 at the same time. Last years also had the highest recorded breeding productivity. The September to November pig crop had 10.63 pigs per litter, and broke the record set in the previous quarter, June to August.
USDA officials expect that pork production may increase by more than 5 percent in 2017 compared to last year’s production. That abundance may result in hog prices falling 15 percent, on average, throughout the year. As increased production reduces the price of US pork, US pork exports are forecast to hit 5.4 billion pounds, 4 percent higher than shipments in 2016.