October 25, 2021

Rabobank: Continual modernisation key to Mexican swine industry meeting market expectations

Mexico's swine industry is at a crossroads, although the industry's transformation from a low-tech, fragmented production sector into a globally competitive pork supplier in just a few decades is remarkable, Rabobank said.

In order to meet future market expectations and provide consistent financial results, the sector must continue its modernisation process.

The industry has two main options as it looks to the future, according to Rabobank. Through additional investments, it has an opportunity to stabilise production and generate more predictable financial returns if it proceeds to:

    - Accelerate investments in biosecurity and worker skills and capabilities;

    - Consolidate weaker players and move toward further vertical integration;

    - Raise carcass values through sales of higher value, convenience products and growth in exports.

Alternatively, if the appetite for further investment has been exhausted, Mexico's swine industry can suspend its modernization pathway, leaving itself exposed to the volatility that has been associated with herd health challenges and the tighter margins associated with inconsistent pork quality, Rabobank said.

- Rabobank