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Mexico hog expansion could hurt U.S. pork exports

Mexico is expanding its hog herd, and a market analyst says it could significantly impact demand for U.S. pork.

Steve Meyer, vice president of pork analysis for EMI Analytics, says Mexico is taking steps to grow its breeding herd by nearly 20 percent.

“They can’t feed hogs as cheaply as we can because we have an advantage on the feed side.  But, they have a free trade agreement with Japan.  So that allows them to ship high-value product to Japan, keep their lower-value product at home perhaps.  And that means they would compete with us in Japan and Mexico.”

Mexico was the top destination for U.S. pork in 2016, followed by Japan.

Meyer says President-elect Trump’s criticism of the North American Free Trade Agreement is another potential headwind for exports.

“My concern is more with the Mexican domestic supply situation, then if you add any trade things on top of that (it) would just add to those.  So I think we’ve got some challenges with Mexico regardless.”

Brownfield spoke to Meyer at Minnesota Pork Congress in Minneapolis Wednesday.