MEXICO - As we all know, for the past 24 months, the production costs due to raw material has been growing and growing. The slaughter prices have been very low, generating high economic losses for almost all of the Mexican pig industry, writes Carlos Peralta, President of Genesus Mexico.
"Mexican pig industry desperation from the past, present and future"
Like other regions in the world, slaughter prices are fixed according to supply and demand due the consumer cycles. In countries like Mexico that are primarily Catholic, lent season, saw slaughter prices fall, bottoming out during the Passion Week and Easter Week.
At the end of these religious events (end of March to beginning of May), the slaughter prices begin to increase. This is due to two factors a) Pig consumption increase and b) startup of the rainy season (June – July).
Other important parts of the cycle that negatively affect the slaughter prices happen when the school summer holidays begin. Students reduce their consumption of sandwhiches, we call this the “sandwich effect” because the students stop eating sandwiches at lunch time (July – August).
When the students come back for the next school year, pork consumption increases and slowly slaughter prices recuperate. The same trend continues until the end of the year when the slaughter prices reach the highest point during the year due the Christmas Holiday Season (September – December).
Normally, during the first 45 days of the New Year the slaughter Price remains steady, slowly falling the closer to lent we get.
All of the slaughter Price fluctuations due to the pork cycle are completely independent of the production cost effects.
In general terms, the Mexican pig industry has been in the red, independent of the point in the cycle. The good pig producers have been almost in breakeven point and the others have had big losses per animal slaughtered ($500.00M.N. – USD $ 40.00/head)
What can we do to diminish or avoid these losses?
- The best solution will be the Vertical integration due to contracts signed who guaranteed a minimum slaughter price
- Regional pig producers coordination to sell their pigs at a minimum Price accordingly
- Focus to reduce as much as possible other production cost
- Take care in feed consumption per production stage to increase the F.C.R.
- Have an excellent genetic supplier to optimize the capability of all the facilities and reduce all the unproductive parameters.
|Genesus Global Market Report|
Prices for the week of May 6, 2013
(Liveweight a lb)
|USA (Iowa-Minnesota)||90.04 USD/lb carcass||66.63¢|
|Canada (Ontario)||1.64 CAD/kg carcass||58.62¢|
|Mexico (DF)||20.10 MXN/kg liveweight||74.74¢|
|Brazil (South Region)||2.48 BRL/kg liveweight||55.54¢|
|Russia||70 RUB/kg liveweight||$1.02|
|China||13.37 RMB/kg liveweight||98.68¢|
|Spain||1.326 EUR/kg liveweight||77.53¢|
|Viet Nam||38,500 VND/kg liveweight||83.79¢|
|South Korea||3,553 KRW/kg liveweight||$1.44|
To find out more about Genesus Genetics, please take the time to visit their website at www.genesus.com .