Import of meat and rise in production costs put pressure on pig farmers

Queretaro, Qro. The constant increase in production costs, as well as the importation of meat, are components that put pressure on livestock producers, mainly affecting pig farmers, a sector that is going through a critical situation, stated the president of the Regional Livestock Union of Querétaro (UGRQ), Alejandro Ugalde Tinoco.

This problem is deepened by the disparity between production costs and the prices at which cattle are marketed; while pig farmers are paid between 29 and 30 pesos per kilogram of pork, the cost of production is around 38 pesos per kilo and the price to the public is around 130 pesos.

Therefore, the sector is fighting for the establishment of a price regulatory body, in which federal agencies have an influence, to reduce the gap that persists between the payment received by the producer and the final price of the product.

For approximately five years – he explained – ranchers have suffered a constant increase in production costs, pressured to a great extent by increases in inputs such as oilseeds, since soybean paste alone is around 12,000 pesos per ton, an increase 60% compared to the 7,500 pesos they paid four or five years ago.

Although grain prices have decreased, the annual reduction is only 6.2%, because currently a ton costs about 7,500 pesos, while last year it was around 8,000 pesos.

“All livestock producers need these inputs to be able to generate our product. (…) Today it hits a lot on pigs. Today (Wednesday) there will be a massive demonstration outside the Ministry of Economy, in Mexico City, where we want to expose precisely the beating they are doing against pork production in the country, they are devastating it, “he said.

Livestock producers report an average increase of 40 to 45% in production costs, compared to 2019. In that pre-pandemic year, he added, pig farmers sold a kilo of meat between 32 and 33 pesos, higher than the current 29 pesos.

Added to this environment is the impact that imports of meat are generating on Mexican producers, mainly from Brazil and Argentina, and which, he said, is entering the country to be sold at low cost.

Pork imports, he stressed, are causing supply to exceed demand, resulting in a dispute between producers to place their merchandise.

“In Mexico we have a deficit in pork production, but we can provide at least 55 to 60% (of the demand), but more than 60% of the meat is coming in, this is what is outdated, there is more supply Due to the demand that the product is having, we producers are fighting here with a price that is well below the cost of production”, he added.

Faced with this scenario, it is expected that production units will begin to close due to the lack of liquidity they are suffering.

“All this is being absorbed by the producer and most likely we are going to start to see farms that start to close due to lack of liquidity and losses that they are experiencing,” he said.

The president of the UGRQ specified that pig farmers are in the most critical situation, although there are other sectors that also report drops in their profit margin.

In the first two months of the year, Queretaro produced 4,575.9 tons of pork, in carcass meat, placing itself as the ninth producer; The ten main producers are Jalisco, Sonora, Puebla, Yucatán, Veracruz, Guanajuato, Michoacán, Chiapas, Querétaro and San Luis Potosí, according to information from the Ministry of Agriculture and Rural Development (Sader).

kg