U.S. Poultry Exports Rebound With Mexican Economy

By Dulce Flores

U.S. poultry meat suppliers continue to benefit from Mexico's economic recovery, with 5 percent of U.S. chicken meat exports and 40 percent of turkey meat exports being sold there. Mexican consumers, taking advantage of increased spending power, are again digesting the benefits of a "chicken in every pot."

Besides U.S. chicken meat, turkey products are finding their way to the Mexican dinner plate. Most popular menu items for this export market: Mechanically deboned meat (MDM), which can be any poultry meat, and turkey thighs.

For 1997, the North American Free Trade Agreement (NAFTA) set duty-free access to the Mexican market at 103,807 metric tons of poultry meat. This amount will increase 3 percent yearly until 2003, when all imports will be duty-free.

Anticipating an upswing in demand for MDM and turkey parts as high as 150,000 tons for 1997, the Mexican government issued duty-free import certificates for 80,000 tons of poultry meats during the first half of the year. MDM accounted for 60 percent of the certificates; turkey thighs, the other 40 percent. These imports are expected to surpass 1996 amounts by almost 9,000 tons.

Adjustments to Import Regulations

The Mexican domestic poultry industry, which is also benefiting from the recovering economy, has complained about imports of fresh poultry temporarily stored in brine. These imports bypass the higher tariffs on fresh poultry meats. To stop these sales, the Mexican government revised the explanatory notes of the Import Tariff Schedule (HS category 0210.90) redefining what constituted poultry in brine.

Recently, the Mexican government agreed to accept multi-language labeling on shipments of U.S. poultry meat. However, shipments must continue to comply with all the Mexican labeling regulations, including the newly enacted NOM-051, which is discussed later in this issue.

Mexican importers are just beginning to take advantage of another facet of the Mexican import regulations--the "temporary imports for subsequent exports" program. Under this law, importers can import ingredients duty-free to be processed and exported to international markets.

Ironically, while the demand for some quota categories, like turkey thighs and MDM, is very high, others go unfilled. The Mexican government practice of auctioning tariff-free import certificates only in Mexico City has effectively penalized some would-be importers and explains some of the unfilled quotas.

Duck importers are asking for the elimination of tariff rate quotas (TRQ's) for duck products. Most of these businesses are distant from Mexico City, and the small tonnage they import doesn't justify the travel expenses incurred to obtain the certificates.

Suppliers Go With Cold Turkey

Turkey parts are the big success story for U.S. suppliers, with the spotlight on turkey thigh meat. With domestic suppliers in Mexico still uncompetitive in this segment, U.S. exporters retain their status as main suppliers of turkey meat products to Mexico.

Overall consumption for turkey in Mexico is increasing slowly, mostly with the processed cold meat products made from turkey meat. Local processors produce franks, hams and other cold meats from the thighs.

Mexico's domestic turkey market supplies the big birds for family Christmas dinners, but little else. Import quotas for whole gobblers go unfilled. Slow domestic production--1997 figures fell over 600 tons from 1996--is expected to continue.

The potential for the Mexican turkey market awaits a promoter's touch. With duty-free import quotas allocated to U.S./Mexico border areas going unfilled, the export of whole turkeys and chickens is an opportunity waiting to happen at the Mexican border.

NAFTA Tariff Rate Quotas (1997)

The 1996 TRQ's for poultry meat added up to 220,980 tons--almost double the originally established quota of 100,838 tons. With 1997 imports on the rise, the Mexican government is again expected to double the year's set allocation of 103,807 tons. However, quotas for whole poultry meat parts and whole turkey go unfilled.

The author is an agricultural specialist with the FAS Office of Agricultural Affairs in Mexico City, Mexico. Tel. (011-525) 211-0042; Fax: (011-525) 208-2115; E-mail: AgMexico_PO@fas.usda.gov.

Last modified: Thursday, October 14, 2004 PM