May 30, 2009

 

 

Mexico may be an important factor in determining if or when US pork exports will begin to return to levels attained earlier in the year.

 

Even if shipments resume within a few weeks, it may be too little and too late to help boost hog and pork prices much by early summer but could be supportive for prices later on, analysts said.

 

Mexico was the leading international customer by volume for USpork and pork variety meats in the first quarter and accounted for about 28 percent of total pork sales internationally. Shipments ground to a halt, however, after the discovery of AH1N1 flu, originally called swine flu by health officials, in late April. Several deaths in Mexico were linked to the human disease among the many cases found there.

 

The US Meat Export Federation said the director of the Mexican Pork Producers Association, Enrique Avila, was quoted in a Mexican newspaper as saying that pork prices in Mexico fell 30 percent as a consequence of the virus outbreak.

 

Consumers in Mexico and elsewhere incorrectly associated the disease with hogs, and many avoided pork altogether, industry participants and analysts said. Within days of the discovery of the disease, officials with the Mexican pork industry said consumption or pork had fallen by around 80 percent.

 

The Mexican government has been attempting to reassure people that eating properly prepared pork is safe. According to media reports, the Mexican government has been holding well-publicised events with military and civilian service groups served pork dishes.

 

Anecdotal reports from US industry participants and analysts indicate Mexican agricultural officials are making progress in convincing the public that pork is safe to eat and is not the cause of AH1N1 flu.

 

Jim Herlihy, vice president, information services with the US Meat Export Federation, said the organization's team in Mexico has been doing some research which showed that about 88 percent of the people said they were buying pork this week. The USMEF's research also showed most people responding in the poll said that "the chance of getting infected with AH1N1 by eating pork meat was pretty much impossible." The rating was 1.19 on a scale of 1 to 5, with 1 being "impossible to get infected" and 2 being "highly unlikely to get infected," he said.

 

The poll also showed that "people in general are buying almost regular quantities - 5.85 on a scale of 1 to 6, with 6 meaning 'buying pork as usual,'" Herlihy said in an email. In addition, most people said they will resume their regular purchases of pork within one to two weeks.

 

Herlihy also said that the economic downturn in Mexico, however, has caused some backlog of pork purchases in the pipeline. But, "the outlook looks good for sales to return to pre-flu levels in several weeks," he said.

 

Herlihy said that USMEF sent a memo to its membership emphasising that the Mexican newspaper La Prensa had reported earlier this week that pork consumption has reached 80 percent of pre-flu levels. The memo also noted that Mexican officials said "pork consumption continues to improve with each passing day."

 

Meat brokers and analysts said there are no indications so far that Mexico will be back in the market for US in the immediate future. Based on reports of a rebound in consumption in Mexico along with product still backed up in the distribution pipeline, some speculate that it could still take a month or more before meat importers in Mexico begin ordering additional pork. Others are more hopeful that some orders may trickle in sooner.