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Wednesday, December 13, 2017
 Mexico Dairy Industry Looking Toward Growth  

Mexico’s dairy production and consumption will rise in 2015, with an increased focus on domestic production forcing U.S. exporters to shift focus, according to a report,“Mexico: Dairy and Products Annual”  from the U.S. Foreign Agricultural Service.

 

The Mexican dairy sector will again increase production in 2015, with annual production forecast at 11.71 million metric tons (MMT), up slightly from 2014. The increase is based on expectations for relatively low feed and forage prices, domestic herd recovery, continued implementation of better production practices among vertically integrated producers, and improved genetics from better yielding milk cows. The availability of grain at attractive prices, water availability for use in confinement establishments, and pasture availability has allowed producers to again consider expanding production.


In 2014, Liconsa, Mexico’s producer/consumer support intensified its program to source more product domestically, increasing price paid to producers and contributing to higher production levels.
Currently, milk production in Mexico occurs in two scenarios, according to the report. The northern and central areas host mainly high-end technology and integrated producers, while southern Mexico bases milk production on pastured cattle. Both will continue benefiting from recovered water reservoirs and water tables in key producing areas.
 
Consumption factors
The industry forecasts sustained consumption of added-value products for middle and upper income consumers. Milk, cheese, and most dairy products consumption will continue to rise, but expectations for dry whole milk powder consumption – and subsequent imports – are expected to decline.


Aligned with production growth, the 2015 total fluid milk consumption forecast (domestic and factory use) is 11.74 MMT, also up slightly on 2014.


Industry contacts indicate that total consumption of fluid milk is comprised of both fresh and ultra high temperature (UHT) milk. Northern Mexico consumes mostly fresh milk, mirroring the U.S. pattern, while UHT milk is widely consumed in the central region of Mexico. Given the lack of proper means to maintain drinkable fluid milk, consumers in southern Mexico prefer the consumption of powdered milk and UHT, keeping fresh milk consumption in check.


Fresh pasteurized milk consumption accounts for about 56% of fluid milk disappearance, while 44% is UHT milk. Due to energy/refrigeration costs, many retail establishments do not have large dairy cases for fluid milk, keeping short supplies on hand and receiving shipments several times per week.

 

Among other highlights contained in the report:

  • Fiscal reform that taxes high-calorie content products (including ice cream, condensed milk and novelties) might affect some dairy products, both domestic and imported.
  • Lala and Alpura, the top producers of fluid milk and dairy products, are competing to launch more innovative products, with more specific segmentation to gain market share.
  • Mexico’s dairy industry continues responding to increased demand for specialized products, such as lactose-free, high-calcium, and even reduced-fat fluid milk products. Consequently, specialized dairy products continue gaining domestic market share and greater volumes of fluid milk are being directed to processing use. 
  • Consumers are more conscious of what they buy and eat, and are willing to pay more for better quality dairy products. In 2014, yogurt and lactose-free milk are the two fastest growing categories. Consumers are switching to other prepared and processed dairy products such as probiotic and drinkable yogurts. Flavored milk and Greek yogurt are gaining share among mid-upper-income sector consumers.
  • Spreadable processed cheese had the fastest growth in 2013 with 18% in retail volume terms; the most popular being cream cheese. Soft cheese remains the most popular kind of cheese in Mexico.
  • 2015 cheese imports are forecast to be flat, as milk availability will allow for increased domestic production and substitute for additional imports.
  • The U.S. remains the dominant supplier of dairy products to the Mexico market, capturing 75% market share representing a volume of around 480,000 MT. In 2013, the U.S. dairy products exported to Mexico with the most growth were: cheeses (+35%), whey protein (+21%), yogurt (+81%), butter (+78%), evaporated milk (+13%) and ice cream (+3%).
  • Mexican cheese manufacturers are enticed to expand into foreign markets, supported by increased fluid milk production.

To see the full report click here
 

Source: USDA / Foreign Agricultural Service

 


Posted on Thursday, October 23, 2014 (Archive on Thursday, October 30, 2014)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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