January 28, 2008

Mexico grants pork industry US$87 million in loans to counter dearer feed

Mexican hog breeders will receive new credit worth US$87 million in a "special support program" aimed at countering higher feed costs amid soaring international grain prices, the Agriculture Ministry said Friday (January 25, 2008).

The ministry said in a report that the new program will offer credit support of 50 pesos (US$4.60) per pig for up to 450 pigs per farmer, or a maximum support of 22,500 pesos (US$2,065) per farmer.

The credit will be offered during the next six months with backing from the government through the Rural Financing authority at a symbolically low interest rate. The credit programme, which targets Mexico's estimated 40,000 small and medium-sized hog breeders, will allow the farmers to improve their cost balance in a market that during the past year has suffered from steep rises in grains prices, the ministry said in the report.

The Rural Financing authority will also seek improved pricing tools for hog breeders by aiding consolidated grains purchases by pork industry and producer associations.

Mexico imports most of the grains needed for animal feed from the US, with imports reaching up to 15 million tonnes a year of mostly yellow corn, but also sorghum and soy.