Canadian beef exports to Mexico grew substantially last year in volume and value.
Canadian beef exports to Mexico from January to November were 58 per cent higher than last year, with an accumulated volume of 18,807 MT. Value grew by 107 per cent to USD$141.2 million. For November Canadian beef export volume went up 15.2 per cent to 1,634 MT, valued at USD$13.81 million. Canadian chilled muscle volume exports showed an increase of 54.25 per cent to 14,347 MT, compared to last year’s volume of 9,301 MT, while value totaled USD$120.12 million compared to USD$70.92 million in 2020.
Rising meat prices are stimulating demand for lower-cost proteins in Mexico’s domestic market. In 2021, the average price of meat exports from Mexico rose by 23.7 per cent, and imports by 32.8 per cent. Mexico’s total beef imports to Nov 2021 were up 13 per cent in volume (157,701 MT) from same period 2020 and up 49 per cent in value to US$1.12 billion. As a consequence of the international price increases and high levels of inflation in most of the world, Mexico’s expense on imported beef and meat proteins soared 57.5 per cent compared to 2020 levels.
According to the Mexican Meat Council, per capita consumption of beef in Mexico for 2021 pointed to a slight decrease year-over-year, declining from 15.1 kilos to 14.8 kilos. In November, Mexico imports from Australia were down 32 per cent from October. Beef imports from the U.S in the same month totaled 10,970 MT valued at USD$90.7 million. Chilled muscle cuts accounted for 63.48 per cent of the U.S imported beef products (6,964 MT) while offals and variety meats represented 30.15 per cent (3,308 MT) of the total imported volume. Nicaragua continued to be a major supplier to the Mexican market in November, exporting 2,235 MT of beef with a value of USD$12.2 million. Beef imports from New Zealand made a slight comeback in November with 10 MT.
Read Also
Key supply and demand factors in the U.S. beef market
Beef market analyst Steve Kay outlines the fundamentals driving the U.S. beef market, including cow herd size, weather, disease threats, imports and demand.
Value, Volume, Price and Market Share % of Beef Imports from Major Suppliers (Nov. 2021, YTD)
High prices breed suspicion in retail
Producers in the sector suspect that prices in supermarkets and self-service stores are not due to inflationary pressures. Pork and beef producers suspect that meat traders have been taking advantage of historic levels of inflation for months in order to artificially raise consumer prices to obtain even higher profit margins. According to the Ministry of Economy, although prices have risen, it does not justify the drastic escalation applied towards consumer prices.
In only one year, the price of domestic Mexican beef increased by 37 per cent, representing a rise of more than 55 pesos (USD$2.70) per kg. Year-over-year, all beef cuts registered an average price increase of 19 per cent. Inside skirt registered the highest rise, followed by brisket, ribs, sirloin and inside rounds, ranging from MX $100 (USD$4.91) to more than $600 pesos (USD$29.45) per kg depending on the cut.
During the first half of December 2021 alone, prices for beef and pork rose another 15 per cent and 12.1 per cent respectively. The high inflation rate has affected consumers’ pockets for months, especially those with a carnivorous tendency.
Omicron and inflation expected in foodservice
Experts warned that the rise in infections around the world from the Omicron variant will also hit Mexico. This will affect supply chains and the food and restaurant industry. The fourth COVID wave will most likely be seen in the first quarter of 2022, with red pandemic traffic lights in major cities and tourist destinations.
After Christmas holidays, Mexicans will face the steepest downturn in January spending vs the previous month in 21 years. Analysts estimated that inflation will remain above seven per cent for January and February 2022, which has not happened since 2001. Most foresee that inflation will begin to moderate slowly throughout the year, but will remain above four per cent.
Consumption and spending in hotels in November grew by 2.8 per cent, while consumption in restaurants increased 3.1 per cent compared to 2020. Going forward, restaurant consumption may be reduced in the first quarter of 2022, given the general increase in prices.
