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June 13, 2018

Brazilian Pork could benefit from U.S. and Mexico Dispute

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

With the trade dispute escalating between the United States and Mexico, Brazilian pork producers feel that this offers an opportunity for Brazil to increase the trade between the two countries.

According to the president of the National Agriculture Confederation of Brazil (CNA), they have been trying to open up the Mexican market to Brazilian pork for a number of years. They got close last year to having Mexico approve Brazilian pork imports and they feel that they cannot afford to miss this opportunity to finally open up the Mexican market to Brazilian pork.

Mexico is the third largest importer of pork and the United States is the major supplier to Mexico. According to the USDA, Mexico is the 9th largest pork producer with a production of 1.43 million tons. In 2017, Mexico imported 1.1 million tons of pork with 638,000 tons originating in the U.S. Domestic production in Mexico has been increasing at a rate of 3.5% per year while imports have been increasing at a rate of 6% per year.

Brazil is the fourth largest producer and exporter of pork and according to the technical director of the National Commission for Poultry and Hogs at CAN, 44% of the pork consumed in Mexico is imported. If Mexico goes ahead with a 20% tariff on some U.S. pork products, Brazilian pork producers see it as an excellent opportunity to open the door to Brazilian pork.

Shortly after the U.S. government announced their intension to renegotiate NAFTA, Mexico sent a delegation of veterinarians and government officials to Brazil to inspect meat processing facilities in preparation for establishing phytosanitary agreements between the two countries.

Brazil and Mexico already had agreements in place to import corn from Brazil and Brazil has significantly increased their corn exports to Mexico.