Mexican households are shifting to processed meats such as ham and sausages due to the loss of purchasing power and the higher prices of beef, pork and chicken. Consumption of processed meats has increased in the last two years despite the price rise of 10 to 16 per cent registered from 2022 to 2023.
Mexico’s total beef imports in January 2023 were 15,360 MT, up 21.8 per cent year-over-year but 10.5 per cent below Dec 2022. Beef imports from Canada totalled 2,110 MT, a considerable rise of 52 per cent from Jan 2022 and up 6.24 per cent from the previous month. Chilled boneless cuts accounted for 61.6 per cent of Mexico’s total imports while variety meats represented 26 per cent of the total volume. Canadian beef export value in January reached US$16.7 million, up 12.7 per cent from Jan 2022.
Food service demand in Mexico for premium beef programs remains strong. Therefore, as the country looks to diversify its food supply to combat high inflation, we expect to see Brazil and Argentina entering this sector with chilled, frozen and aged beef cuts.
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Security costs add up for retail
Meat prices in Mexico (chicken, pork, beef and processed meats) have stabilized. However, additional security measures for safeguarding trucks on the roads are increasing food costs for end consumers. Price rises in proteins such as eggs (up 35.17 per cent) will elevate the basic food basket cost by 25.4 per cent by the end of March. Consumer prices increased 0.56 per cent in Feb 2023, and annual inflation moderated to 7.62 per cent, its lowest level since March 2022. Despite this, annual inflation for food increased 12.66 per cent year-over-year.
Growth expected for food service
Mexican diners are willing to pay more for unique experiences, with average spending tickets up to 2,000 pesos. The food service industry will grow this year with the arrival of new restaurant brands and higher average spending. There will be an increased demand for pork in 2023, derived from the high inflationary situation and lower supply of chicken. As of Feb 28, all food and beverage establishments in Mexico City must comply with new regulations which require merchants to fully disclose the products and prices they offer, to avoid abusive practices against customers.
Brazil and Argentina ramp up
Brazil announced it has 34 plants authorized and ready to export beef to Mexico. Free access from Brazil and Argentina has caused speculation and a drop in beef sales prices in the country. After 10 years of negotiations, the first shipment of Argentinian beef to Mexico with different beef cuts took place. An additional 21 establishments were authorized to export to the Mexican market.
U.S. beef exports to Mexico in January totalled 11,112 MT, followed by Canada (2,110 MT) Nicaragua (1,998 MT) and Australia (120 MT).
