THE MEXICAN HOG INDUSTRY: MOVING BEYOND 2003

“The Mexican Hog Industry: Moving Beyond 2003”¹
Victor Ochoa and Steven Zahniser

A. Introduction

For many years, Mexican hog producers benefited from favorable prices.
Being among the highest in the world and certainly the highest among the
NAFTA countries, prices usually were large enough to compensate for the
very high costs of hog production in Mexico as well as certain institutional
barriers. Today, however, the Mexican hog industry is facing a diverse set
of economic challenges that threaten the very survival of many producers.
These challenges include:

Competition with cheaper meat alternatives, such as chicken;

Changes in consumer preferences due to public perceptions that health
problems are associated with pork;

Delayed implementation of sound eradication campaigns for Classical
Swine Fever, Aujeszky’s Disease, and other swine diseases; and

The lasting consequences of the recurrent financial crises that Mexico
has suffered over the past 25 years.

Despite the many benefits that NAFTA is bringing to the Mexican economy,
the agreement’s impact on hog prices is leading some Mexican producers to
treat NAFTA as a scapegoat for all the problems that the industry faces. The
purpose of this paper is to show how Mexican hog producers can take
advantage of NAFTA in order to increase their competitiveness. In
particular, lowering feed costs, improving transportation facilities, and
establishing greater control over swine diseases would go a long way
towards increasing the competitiveness of Mexican producers.

¹ Paper prepared for the Policy Disputes Information Consortium’s Ninth Agricultural and Food Policy
Workshop, “Farm Policy Developments and Tensions with NAFTA,” Montreal, Quebec, April 23-26,
2003. Victor Ochoa is Director General of Granjas Carroll, Perote, Veracruz. Steven Zahniser is
agricultural economist at the U.S. Department of Agriculture, Economic Research Service, Washington,
DC. The authors thank William Chambers, Praveen Dixit, Janet Perry, and Leland Southard for their
helpful comments and suggestions. Any opinions in this paper are those of the authors and do not
necessarily reflect the views of the institutions with which they are affiliated.

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