AI Outbreak in Mexico Damages Domestic Poultry Production

COTW Mexico's poultry industry has become one of the most important and strongest animal agricultural sectors in the country and is a significant driving force for feed grain demand, particularly U.S. sorghum and distiller's dried grains with solubles. Poultry in Mexico is by far the largest feed grain consumer, demanding more than 10 million metric tons annually. Compared to other livestock industries, poultry represents 63 percent of the country's total livestock output.


In a normal year, Mexico is the fourth-largest poultry producer in the world. However, due to the outbreak of the highly pathogenic Avian Influenza (AI) during the second half of 2012 and its continued spread in 2013, the Mexican poultry market has suffered a considerable loss in production. Last year, more than 24 million layers died or were sacrificed due to the outbreak. According to the Agricultural and Livestock Information System, poultry exports decreased by 68 percent in 2012 from the previous year, while poultry imports grew 10 percent to compensate for current losses.

The effects of the influenza outbreak in Mexico were felt in the main egg producing area of the country, the state of Jalisco. Jalisco accounts for 55 percent of the country's egg production, generating 1.3 million tons of eggs per year. "Jalisco has the highest concentration of commercial egg laying hens in the world, and they have now lost 24.6 million laying hens valued at $745 million," said U.S. Grains Council Director in Mexico Julio Hernandez.

Mexico exports spent hen products to regions like Japan, Vietnam and Hong Kong, but exports have now halted due to the outbreak. Additionally, Jaime Crivelli, president of the Poultry Producers Association in Mexico, said that freight costs have increased, making exports less attractive to domestic poultry producers.

The country also has the largest per capita consumption of fresh eggs in the world. "Since consumption of eggs and chicken in Mexico has not decreased, Mexico will have to import more eggs and chicken in order to meet demand," noted Hernandez.

Recent reports indicate that the virus continues to spread to other states. Bachoco, a major poultry producer in Mexico, for example, had to eliminate 800,000 heavy breeders, which translates into a deficit of about 112 million chicks per production cycle. Because this is a high number of chicks for one single cycle, imports of fertile eggs to replace them may not be easy to find.

"There is no question this will have an effect on imported feed grain products from the United States," said Hernandez. "What that number will be is purely speculative at this point. What we do know is that the situation is expected to become worse before it gets better."

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