I just returned from about a week in Mexico, in the Jalisco and Sonora regions (western side of Mexico from the USA south to about the level of Mexico City). Jalisco is the Tequila distilling area and the Agave plants in various stages of development are clearly visible wherever you travel in countryside. Sonora is prodominately cattle country but the isolation especially has led to many larger swine units developing there in the last 30-40 years. As in the USA, Mexican producers have been losing money in large amounts for a period probably six to eight months longer than those in the USA.
The southern and central parts of Mexico largely produce to serve the domestic markets in large cities such as Guadalajara and Mexico City. Much of the Sonora area produces pork both for domestic consumption and a sizeable portion for export. Sonora uses corn from the United States and buys it at west coast prices so their price per bushel is over a dollar higher than in the midwest USA. Many producers have switched to sorghum as a replacement for wheat or corn.
Unless a producer is aligned with a plant that is exporting, the typical way selling is done is on the cash market through intermediaries (like order buyers for cattle). These guys know the plants, prices and where opportunities are and bid hogs to supply those opportunities. Often little feedback is given about quality but poor quality production is bid down by the buyers as it was in the USA before grids were widely in use. Often a range of acceptable weights, such as 105-120kg is given and producers must weigh hogs to hit that range. While leaner hogs are desired, payments based on lean are not usually explicit.
Newer and larger units operate all-in all-out, but the prodominant production is continuous flow, though frequently on separate sites. The hot season is coming in the Sonora (July, August) when temperatures often reach 120F or hotter during the day. Many producers report pigs lose weight in the month of July despite misting and ventilation to reduce heat. I landed in the Sonora last October and the pilot announced the ground temperature was 115F. Producers were encouraged that the cooling down had already begun. Sonora looks like the country where you would expect John Wayne to ride up on a horse out of a classic Western movie.
Many producers are multi-meat or poultry producers, especially in the Jalisco area. It is not unusual to have layers, broilers, hogs and some cattle--all at decent scale. Just like the USA, eggs and milk in Mexico have increased in cost dramatically in the last year which is offsetting the hog loss problems for these producers who are diversified. Much of the dairy production takes place on 70-80 cow farms. The Mexican people are big-time egg consumers, I believe number two in the world in per capita consumption. Regardless of where you travel in Mexico, if you stay away from hotel food, the local food is without question, the best in all of the world.
Speaking of food, while in Ciudad Obregon, I was able to eat again at a steak place called "El Bronco", which some of you may be familiar with. It is a simple restaurant serving mesquite grilled beef including the house specialty which is the filet mignon. It is "unrolled" into a flat piece of meat with some careful knife strokes which facilitates quick grilling. I was singing the praises of the place so high I was invited back into the kitchen to get a first hand look at the preparation. Several years ago, I tried to buy one of the big cast iron serving platters from them (much to the chagrin of my hosts) but was not successful in getting them to give one up.
Fresh mesquite (better than the dried out chunks we can purchase here) is used to fuel the grill and the sensational baste (no marinating) is made from beef kidney fat, rendered out to produce a great tasting finish, preserving moisture during the flash cooking. Now I have to find some beef kidney fat but I don't think any of my supermarkets sell it. Believe me, that will not be a problem. Since the ocean is so close, unbelievable seafood establishments dot the Sonora towns and cities often serving fresh caught scallops, shrimp and octopus raw. Yum.
The biggest question on everybody's mind is the same throughout North America and that is when will feed costs come down or hog prices rise? Grocery store prices for pork are similar to the USA (as opposed to the EU as reported by Mark Greenwood recently). $2.25 -$3.50/lb US is common for most cuts.
Government reports regarding agriculture are not nearly as extensive as they are in the US so Mexican producers look north for information about the North American pork situation. They are very informed on everything from the CME futures prices to the cold storage reports from the USA. Mexico does not have specialized sow killer plants like the USA so getting a handle on how much sow liquidation is actually occuring in Mexico is very difficult. Reports are only anecdotal.
