THE MEXICAN HOG INDUSTRY: MOVING BEYOND 2003

cost (table 6). When rail alone is used, transportation accounts for 22
percent of the total cost, compared with 17 percent when an ocean-rail
combination is used.

Table 6 -- Comparison of Grain Transport Costs, Ocean-Rail Versus Rail

Mexican hog producers already have benefited from substantial
improvements to the Port of Veracruz. In 1998, the Port was dredged to a
depth of 36 feet, and work is underway to dredge the port to about 40 feet
from the harbor entrance to the grain terminals (Hall, 2002). Today, the Port
accounts for almost 70 percent of all sea trade in Mexico.

However, the Port of Veracruz is only convenient for producers in East-
Central Mexico. Ports such as Coatzacoalcos (also in the State of Veracruz)
and Progreso (near the city of Merida, Yucatan) provide additional
alternatives to producers along the Gulf of Mexico, but these facilities need
significant improvements. Government actions to improve existing port
facilities and to extend these efforts to the Pacific Coast are required to
increase the competitiveness of Mexican hog producers.

(3) Use Alternative Feed Ingredients. In countries that are not competitive
grain producers, hog producers have succeeded through the use of
alternative feed ingredients, such as byproducts from brewing and baking.
For instance, the feed costs of German and French hog producers are
comparable to those in Canada and the United States (table 5). Neither
Germany nor France is as competitive as Canada and the United States in
terms of grain production, but by using other feed options, each has
successfully replaced corn and sorghum from the diets of its hogs. The use
of alternative feed ingredients also has clear environmental benefits, as it
puts materials that would otherwise be garbage to productive use.

In Mexico, hog producers have experienced savings in feed costs close to
$6.00 per metric ton, just through the use of rice polish, wheat bran, tapioca,

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