USDA FAS-GAIN Report MX2023-0041 released September 5th quantified broiler production in Mexico for the current year and 2024. Total domestic broiler production will increase by 2.0 percent from 2023 to 3.875 million metric tons (8,525 million lbs.) in 2024. Net imports will amount to 1.020 million metric tons (2,244 million lbs.) representing 21 percent of the total availability of 4.900 million metric tons (10,780 million lbs). Per capita consumption, assuming a population of 127 million, will be 38.5 kg per annum (84.8 lbs.).
Mexico is the largest importer by value and volume from the U.S. During 2022 Mexico imported 664,013 million metric tons (1,461 million lbs.) valued at $766 million, respectively 7 percent and 8 percent lower than in 2021. Over the first seven months of 2023 Mexico ranked first in both volume and value, importing 416,324 million metric tons (0.916 million lbs.) valued at $463.9 million, respectively 14 percent higher in volume and 4 percent in value. Year to date, Mexico has exceeded the value of exports to China. Unit value over the first seven months of 2023 declined by 11.8 percent from $1,263 per metric ton to $1,114 per metric ton compared to an average for all broiler exports for the first seven months of 2023 of $1,296 per metric ton.
The current relationship with the Government of Mexico under President Andres Manuel Lopez Obrador (“AMLO”) is as best confrontational despite the requirements of the USMCA Agreement. The major agricultural issue relates to an ill-conceived ban on GM white corn and the application of glyphosate herbicide that are currently the subject of a USMCA dispute panel.
An election for president will be held in 2024 with the incumbent obliged to retire. The likely successor is Dr. Claudia Sheinbaum, formerly Mayor of Mexico City and the leading contender for the position. Dr. Sheinbaum earned a doctorate in environmental engineering and would be more amenable to a resolution of the GM dispute on the basis of scientific reality. Dr. Sheinbaum, who has the support of AMLO has pledged to continue the Fourth Transformation that combines socialistic policies and retention of fossil fuels. Given her background she would be expected to move Mexico in the direction of more green sources of energy. Her opponent Xochitl Galves, a computer scientist and entrepreneur, served in the PAN administration of Vincente Fox and is currently a serving Senator.
The 2024 election will also select 500 members of the lower house and 128 in the Senate. Based on civic concerns over crime and security, the ruling Morena Party will probably lose seats and may not retain their two-thirds majority. This will place a heavy burden on the incoming Presidenta to govern effectively. Political stability in Mexico has an important influence on the U.S. economy given the move to replace China as a source of manufactured goods. This has benefitted our southern neighbor. Prosperity in Mexico equates to higher protein consumption representing larger exports of corn, soybeans and processed chicken.