Required Report - public distribution

**Date:** 12/05/2005

**GAIN Report Number:** MX5316

MX4313

**Mexico**

**Exporter Guide**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Bruce Zanin

ATO Mexico City

**Prepared by:**

Carlos Zertuche, Lourdes Guzman & Luis Chaez

**Report Highlights:**

The hotel, restaurant and tourism, food processing and retail sectors in
Mexico all present good opportunities for US agricultural exports. In
2004, exports of agricultural, fish and forestry products to Mexico
reached a record nine billion dollars, while imports of same products
from Mexico also achieved a record eight billion dollars. For the first
eight months of 2005, both exports and imports were ahead of the record
2004 figures, at 6.4 billion dollars and 6.1 billion dollars,
respectively.[^1]

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Mexico (MX)

\[MX\]

Section I: Market Overview

> In 2004, the Mexican economy grew at a 4 percent rate (4.4 percent
> according to the Government of Mexico), the strongest growth in many
> years. Growth in 2005 will slow somewhat, but is still expected to be
> around 3.5 percent. Petroleum and remissions from Mexicans in the US
> are the largest foreign exchange earners, followed by tourism and
> direct foreign investment.

Under NAFTA, Mexico has become one of the largest and fastest growing
markets for US agricultural products. NAFTA was fully implemented in
2003 (except for corn, dry beans and some dairy products) resulting in
duty free entry for most US agricultural products. US agricultural fish
and forestry exports have more than doubled since the onset of NAFTA
(from \$4.1 billion in 1993). In addition, Mexico rebounded from the
financial crises of the mid-nineties, and the banking and fiscal reforms
have made for a more robust and stable economy. With the additional
political reform reflected in the election of a president from a new
political party for the first time in 70 years in 2000, Mexico has
proven itself to be a modern stable democracy. The next presidential
election will occur in July 2006. The three main political parties
selected their presidential candidates in November 2005.

Mexico is the United States' second most important trading partner after
Canada. Total trade with Mexico in 2004 was 266.6 billion dollars.
Mexico continued its overall trade surplus with the United States with
total U.S. to Mexico sales equaling 110.8 billion dollars, while total
Mexico to U.S. sales reached 155.8 billion dollars. However, as in past
years, the United States enjoys a trade surplus in exports of
agricultural, fish and forestry products to Mexico. In 2004, these
exports reached a record nine billion dollars, while imports of same
products from Mexico also achieved a record eight billion dollars. For
the first eight months of 2005, both exports and imports were ahead of
the record 2004 figures, at 6.4 billion dollars and 6.1 billion dollars,
respectively.[^2]

> In 2003, The United States had a 75 percent import market share in
> agricultural products, followed by Canada with 6 percent. The market
> share has dropped slightly from 77 percent in 1998 as Mexico has
> aggressively initiated trade agreements with other countries and
> regions. Mexico has negotiated free trade agreements with 32 countries
> on three continents and is currently negotiating agreements with at
> least five countries. Mexico is heavily reliant on the U.S. market
> with 89% of total exports and 86% of agricultural exports going there.

Demographic changes in Mexico bode well for increasing exports. Women
continue to join the workforce in larger numbers, which leads to
increased demand for consumer-ready food products. In 1990,
approximately 30 percent of women were employed; in 1997, this increased
to 39.4 percent, and the most recently reported figure in 2000,
indicates that 44.6 percent of women from the ages of 15-64 are working
outside the home. This figure is generally higher in the eight cities
with populations of over 1 million. As more women work away from home,
buying patterns are shifting towards fast, easily prepared meals. In
addition, 53 percent of Mexico's population is under the age of 25.
These up and coming consumers are more oriented towards US products,
further accelerating the ever increasing demand for US food products in
the market.

> Economic and political stability, the full implementation of NAFTA,
> increasing per capita income, and lack of arable land make Mexico an
> excellent long-term prospect for US agricultural products.

Highlight for sales of US Agricultural Fish and Forestry Products to
Mexico based on figures from January to August 2005:

-   After a dip in 2004 due to the BSE incident in late 2003 and
    subsequent 10-week market closure, exports of red meat have
    rebounded and regained momentum, soaring to \$838 million, 45
    percent higher than the same time in 2004. This acceleration will
    increase when the market reopens for bone-in beef.

-   Similarly, poultry meat and dairy product exports are 44 and 43
    percent higher, respectively, than the same time in 2004. It is
    likely that new export records will be set for both before year's
    end.

-   Bulk exports are down seven percent by value, mainly due to lower
    commodity prices, as export volume is up.

-   The soybean complex -- soybeans, soybean meal and soybean oil --
    continue their strong growth, with export values rising 7, 27 and 72
    percent, respectively, for the period.

-   Finally, forest product exports are up a healthy 11 percent to \$333
    million.

# Advantages and Challenges for US Exporters in Mexico

+---------------------------------+------------------------------------+
| **Advantages**                  | **Challenges**                     |
+---------------------------------+------------------------------------+
| -   The majority of US products | -   Mexico continues to explore    |
|     now enter Mexico            |     and use individual product by  |
|     tariff-free                 |     product policy measures on a   |
|                                 |     few sensitive products to      |
| -   Mexican consumers recognize |     protect the domestic industry, |
|     US brands and labels and    |     such as considering safeguard  |
|     associate US made products  |     and anti-dumping cases         |
|     with high quality and value |                                    |
|                                 | -   Increasing competition from    |
| -   The US has strong           |     Mexican food processing        |
|     reputation for consistency  |     companies                      |
|     in the quality and supply   |                                    |
|     of US products among retail | -   Mexican consumers are very     |
|     chains                      |     price conscious, and imported  |
|                                 |     US processed products in       |
| -   Population in urban centers |     general are 15-40 percent      |
|     is growing and the rate of  |     higher in price                |
|     employment among women is   |                                    |
|     continuing to grow          | -   Transportation and             |
|                                 |     distribution methods inside    |
| -   Proximity to US market      |     Mexico are undeveloped in many |
|     keeps transportation costs  |     regions                        |
|     to Mexico low               |                                    |
|                                 | -   Imported products are subject  |
| -   The Mexican peso continues  |     to often onerous Mexican       |
|     to be relatively stable in  |     quality standards (NOMs) and   |
|     its relation to the US      |     labeling requirements          |
|     dollar, making unexpected   |                                    |
|     price fluctuations less     | -   Phytosanitary and technical    |
|     likely                      |     barriers and labeling          |
|                                 |     requirements can cause border  |
| -   Continued growth in almost  |     crossing problems and delays   |
|     all sectors of the          |     as Mexican import regulations  |
|     processed food industry in  |     can change rapidly and without |
|     Mexico, and increased       |     notice                         |
|     investments from national   |                                    |
|     and international based     | -   Mexico has signed 10 trade     |
|     companies, including from   |     agreements in the last decade  |
|     the US, will raise the need |     covering 60 percent of the     |
|     for inputs                  |     world's GDP, including Europe; |
|                                 |     thus increasing third country  |
| -   The major retailers are     |     competition                    |
|     developing increasingly     |                                    |
|     sophisticated distribution  |                                    |
|     systems, which will provide |                                    |
|     more space and better cold  |                                    |
|     chain technology for        |                                    |
|     high-value imports          |                                    |
+---------------------------------+------------------------------------+

Section II. Exporter Business Tips

###### Business culture

Personal relationships are the primary base of Mexican business
relationships. Mexicans attach great importance to courtesy in all
business endeavors. Many will not want to do business, regardless of the
viability of the project, with someone who does not practice general
courtesy or is considered rude or disrespectful. A warm handshake
combined with conversation about the person's well being, family, or
other similar topics prior to launching into any conversation related to
business is considered a common courtesy. The concept that "time is
money" should be left at the border, and though Mexican businesses are
also conscious of the bottom line, courtesy and diplomacy are more
important values to most Mexicans than getting immediately "down to
business". In the face of a disagreement, Mexicans tend to be skilled at
diplomacy and choose to avoid confrontation and loss of face. In a
potential confrontation they strive to reach a consensus without having
clearly defined winners and losers. These skills of diplomacy are
important when approaching all forms of business in Mexico.

Personally visit your Mexican clients in Mexico. If a Mexican client
visits you in the United States, you are expected to wine and dine him.
You will be accorded similar treatment when visiting Mexico.[^3]

###### Entering the Mexican Market

The best way to understand the Mexican market is to visit the
marketplace and to talk to buyers, retailers, distributors and other
players in order to prepare a more effective entry strategy. US
exporters must do their research not only in terms of typical market
research, but also finding appropriate business contacts and thoroughly
reviewing Mexican import regulations in order to successfully seize
market opportunities and overcome market challenges.

US exporters should consider contacting local distributors/importers as
an important early step in their efforts to establish themselves in the
Mexican market. A good distributor should promote sales and make sure
that the imported products are available at points of sale. It is
essential to maintain close contact with your representative, especially
regarding changes in import procedures and documentation.

An affordable way to investigate the market is to participate in and/or
attend Mexican trade shows, particularly US Pavilions organized at
selected shows. A show can serve as a way to contact local
distributors/sales agents, buyers and businessmen, and to become
familiarized with local competition. In the case of new-to-market
companies, be prepared to provide support for in-store and media
promotions to familiarize consumers with your products. If possible,
develop product information/promotional pamphlets in Spanish.

More information is available on import regulations in the GAINS report
MX5064 that includes information on the processes and procedures for
exporting products across the US-Mexican border. Furthermore, the US
Agricultural Trade Offices (ATO) of the US Embassy with offices in
Mexico City and Monterrey can provide general market and sector specific
information, as well as assist US exporters in identifying trade
contacts and developing their marketing strategies in Mexico.

Section III. Market Sector Structure and Trends

A. Retail Sector

The retail sector continues its incredible growth. Wal-Mart Mexico, the
country's largest retailer, (<http://www.walmartmexico.com.mx/>) had
sales growth of almost 14% for the first 30 weeks of 2005 and is
projecting medium term sales growth of 15%. Also, Wal-Mart added 16 new
stores this year through early August, including 1 Superama, 2 Sam\'s
Clubs, 3 Wal-Mart Supercenters, and 10 Bodegas Aurrera, bringing its
total to 426 stores. Soriana (<http://www1.soriana.com/>) grew sales
just over 13% for the second quarter of the 2005 and is projecting 14%
growth for the year. Through July Soriana opened 14 stores, 9 Mercados,
4 City Clubs and 1 Soriana, bringing its total to 175 stores. In
addition, Soriana has 25 stores under construction. In 2005, Soriana is
entering the ferociously competitive Mexico City market. Comercial
Mexicana ([http://www.comerci.com.mx](http://www.comerci.com.mx/)) has
180 stores, adding 5 stores through June 2005 while closing 4. Its plans
are to build another 12 stores this year. Finally, Chedraui, up until
June a regional chain in southeast Mexico, purchased Carrefour's stores
and converted a number of them to Chedraui supermarkets.

In addition to sales growth, supermarket chains are introducing new
store formats, new sections within stores and are expanding into areas
where they did not previously have presence. For example, Soriana's
Mercado format is modeled on the traditional Mexican market with a
limited selection of staples and low prices. On another front, Waldo's
Mart (<http://waldos.cnet18.uservers.net/content.php?action=index>) has
quietly grown its chain of single-price stores to include 148 units
across the country. Reportedly, Wal-Mart and Gigante are considering a
single-price format. Wal-Mart also is experimenting with specialty
areas, like organic foods within supermarkets. Wal-Mart and Sam's Club
have just opened 'new product' sections in their respective purchasing
departments to introduce products specifically geared to the Mexican
consumer. Finally, there is a concentrated movement of club stores like
Costco, Sam's Club and City Club to open in resort areas and sell to
hotels and restaurants there (thus filling a void as there is no
national supplier of HRI products in Mexico).

Finally, a veritable revolution in purchasing and distribution is
ongoing. Wal-Mart, Soriana, Comercial Mexicana and Gigante have all
introduced distribution centers for fresh and frozen, or dry goods or
both. The latter three supermarkets also have formed a single purchasing
company for dry goods, Sinergia, in an effort to combat the buying power
of Wal-Mart. Consequently, supermarket chains are rapidly reducing
purchases from traditional central markets. In addition, the leading
chains are quickly moving to systems of preferred suppliers and
specialized distributors.

What this means for exporters:

-   Traditional retail sales and marketing chains are changing rapidly.
    Be prepared to make new contacts to keep your products on store
    shelves.

-   Supermarkets are more and more interested in buying directly from
    suppliers, bypassing traditional distributors.

-   If you have been selling into the HRI sector and want to take
    advantage of the club store movement to supply hotels and
    restaurants, you will have to label your products as if they were
    for retail sale.

-   Competition is fierce and retailers are constantly searching for new
    products, so you cannot take the Mexican market for granted. Come
    every year to trade shows or to your distributors with your new
    products, as that is what consumers want.

###### Competition in supplying products to the retail sector

Local producers are the main suppliers of consumer ready products.
Mexico has a relatively strong food processing industry and leading
Mexican brands have well-developed national distribution networks and
are well positioned in the market and enjoy high brand awareness with
consumers. Some of these companies include Grupo Industrial Bimbo (bread
products) considered to have one of the country's best distribution
systems, Nestle (food products in general), Herdez (food products in
general), Sabritas (snack foods) Grupo Industrial Lala (dairy products)
and Jugos del Valle (fruit juices).

There are also several American and multinational producers/importers in
Mexico, including: Campbell's, Bacardi, General Mills, Gerber,
Kellog\'s, Kraft Foods, Procter & Gamble, Frito Lay-Pepsico, Pilgrim\'s
Pride, Purina, and Tyson.

Competition among importers depends on the category. Competition from
Europe has increased as a result of the Mexico-European Union Free Trade
Agreement, although meat and dairy products were excluded from the
treaty. Canada, Australia and New Zealand export notable amounts of meat
and dairy products to Mexico. New Zealand butter, for instance, is well
positioned in Mexico City retailers.

For additional information on the retail sector, please refer to the
GAINS Mexican retail report MX5303

### 

> **B. Food Processing Sector**

In Mexico, food processing is categorized under the Foods, Beverages &
Tobacco division. This division is made up of 13 branches: meat & dairy,
fruits & vegetables, wheat, corn, coffee, sugar, oil and edible fats,
forage, alcoholic beverages, beer & malts, soft drinks, tobacco and
other food products. According to the Business Registry of the Mexican
Secretariat of Economy (SIEM), there are over 8,000 food & beverage
processing companies, generating over half a million jobs, and handling
a range of over 20,000 different products.

Mexico offers very good opportunities for suppliers to the processed
foods sector. The demand for processed foods is increasing, and the
industry is keeping pace; the sector's production value grew by an
average 11.5 percent annually for the last five years. It is worth
mentioning, however, that such growth is increasing at a decreasing
rate; i.e., in 2000 the sector grew 20% from the previous year, whereas
last year's growth was only 8%.

There are several emerging consumer and industry trends that are shaping
the food processing industry. Mexico is the world's largest per-capita
consumer of soft drinks, which is a serious health issue in this age of
healthy eating. An increase in the number of people plagued by diabetes
and obesity, along with an aging population coincides with a market
shortage of items geared towards these groups. Nonetheless, the
consumption of fruit (fresh and prepared), meat products and dairy
(especially yogurt and similar goods) is on the rise. A new class of
Mexican consumers is demanding products that are healthy, convenient and
innovative.

Additionally, companies in the food-processing sector have formed
strategic alliances with foreign companies in search of technology, raw
materials and capital. U.S. suppliers dominate Mexican imports of raw
materials and foreign direct investment for the sector. Between 1999 and
2004, US\$ 3.86 billion in foreign investment flowed into 645 companies
registered in this manufacturing division, out of which 50% received
U.S. capital. Also, Mexico imports from the United States six times as
much of raw material for the industry as it exports, and imports to the
sector grew 23 percent between 2001 and 2003. The figures indicate a
strong and growing dependence upon foreign suppliers to the industry,
and U.S. suppliers are well positioned to take advantage of these
opportunities.

The following imports of raw materials for the food-processing sector
experienced the highest rates of growth from 2004 to 2005:

  ---------------------------------- ------------------------------------
  Tobacco (54%)                      Other animal products (29.2%)

  Live animals (53.3%)               Live plants and flowers (23.3%)

  Meat and seafood preparations      Fisheries and seafood (23%)
  (47%)                              

  Cereal preparations (36.6%)        Vegetables, roots and tubers (19.7%)

  Juice, vegetable extracts (32.8%)  Raw meat (18.2%)

  Coffee, tea and spices (32.7%)     Dairy products, eggs and honey
                                     (17.1%)
  ---------------------------------- ------------------------------------

Market studies have revealed some of the products with the highest
growth potential in this sector. The products listed below follow new
trends in the international markets such as the proliferation of
Mexican-style restaurants, or the market demand for organic food. Others
have potential due to the recognized craftsmanship of Mexican bakers,
brewers and candy makers. Whatever the reason, the production of
processed foods and beverages will certainly demand raw materials from
other countries, and U.S. suppliers have a clear advantage to provide
them.

A. Products available in the Mexican market that have good sales
potential

\- Beef, pork, turkey and chicken meat - Beef cuts boneless

\- Marinated poultry - Mechanically de-boned poultry

\- Bovine, sheep and goat fat - Raw turkey

\- Pizza crust & toppings - Mixed fruit juice

\- Dairy products - Spicy candy

\- Sunflower oil - Wheat flour

\- Yogurt - Breakfast bars

\- Ice cream bars - Soybean and soybean oil

\- Fruit flavored drinks - Mixed and salted nuts

\- Dry soup preparations - Instant soups

\- Concentrates (fruit juice and other - Multi-grain baked goods

beverage concentrates)

B. Products not available in large quantities that have good sales
potential

\- Malt extracts - Spices

\- Meal flakes (i.e. oat, bran & soy) - Potato flakes

\- Cookie dough and baking mix inputs - Natural and artificial spices
and flavorings

\- Sunflower seeds

C. Hotel, Restaurant, Institutional (HRI) Sector

Mexico's hotel, restaurant and institutional food services (HRI) sector
continues to provide export opportunities. During 2004, Mexico recovered
from the worldwide tourism slump receiving a record 20.6 million
international visitors who spent over \$10.7 billion. Tourism's
contribution to the economy during the year reached \$54 billion
representing 7.7 percent of the national GDP.

In 2004, Mexico's Secretary of Tourism, reported 13,060 hotels with
515,904 rooms in Mexico with 43 percent of them being Four and Five star
hotels. According to the National Chamber of the Restaurant Industry
(CANIRAC), Mexico has around 221,000 established restaurants, which
reported sales of \$14 billion in 2004.

> US suppliers continue to enjoy favorable market conditions as Mexican
> consumers become more discerning and American restaurants and hotel
> chains expand operations in Mexico. US products are perceived to be of
> higher quality than those of local producers, especially red meat,
> poultry and dairy products. American products dominate imports with
> the main competition coming from local firms. Of all food products
> consumed in hotels, approximately 15 percent is imported.
>
> Independent distributors continue to be the main suppliers for the HRI
> sector, however, they have been experiencing greater competition from
> large club stores which have been aggressively pursuing their share of
> this market.
>
> The largest growth is seen in tourist destinations such as the Mexican
> Caribbean (Cancun and recently the Mayan Riviera), Huatulco in the
> South and, Los Cabos and Puerto Vallarta on the West Coast. The main
> distribution centers continue to be the large central markets located
> in Mexico City, Monterrey y Guadalajara. However, with the
> modernization of port and airport infrastructure as well as logistic
> centers in many places, cities such as Cancun receive most of its
> imported items directly.
>
> While some hotels and restaurants do import directly, US suppliers
> need to serve the market through an established distributor. Some
> hotels and restaurants, especially those belonging to
> chains/franchises, have centralized controls that limit their
> individual ability to purchase new items, however, they are always
> looking for new products.
>
> The best prospects for US exporters are with the large hotel groups
> and international-class restaurants since smaller establishments use
> fewer processed foods and a limited number of imported goods. Many
> restaurants make purchases of US products directly from club stores,
> particularly for frozen meat, poultry and dairy products.

For additional information on the HRI sector, please refer to the
upcoming Mexico GAINS HRI report to be released in early 2006.

> **Section IV. Best High Value Product Prospects**

US consumer ready product sales continued their climb to record levels
increasing 7 percent to \$3.4 billion in 2004 with record sales across
many product categories: poultry meat, dairy, fresh vegetables,
processed fruit and vegetables, breakfast cereals and mixes, processed
meat and wine and beer. In addition, record sales were registered for
intermediate and bulk products.

US EXPORTS OF CONSUMER READY AND INTERMEDIATE AGRICULTURAL PRODUCTS

(In Thousands of US Dollars; Calendar Year Information)

+-----------------+---------+----------+----------+--------+---------+
| Product         | 2002    | 2003     | 2004     | J      | Jan-Aug |
|                 |         |          |          | an-Aug | 05      |
|                 |         |          |          | 04     |         |
+-----------------+---------+----------+----------+--------+---------+
| Dairy Products  | 201,961 | 251,385  | 387,263  | 2      | 325,925 |
|                 |         |          |          | 28,079 |         |
+-----------------+---------+----------+----------+--------+---------+
| Poultry Meat    | 173,825 | 259,536  | 330,652  | 2      | 288,990 |
|                 |         |          |          | 00,366 |         |
+-----------------+---------+----------+----------+--------+---------+
| Snack Foods     | 157,813 | 179,657  | 190,606  | 1      | 144,310 |
|                 |         |          |          | 11,267 |         |
+-----------------+---------+----------+----------+--------+---------+
| Bfast           | 49,767  | 57,318   | 60,608   | 36,534 | 36,438  |
| cerals/dry      |         |          |          |        |         |
| mixes           |         |          |          |        |         |
+-----------------+---------+----------+----------+--------+---------+
| Processed       | 329,832 | 383,768  | 402,906  | 2      | 253,332 |
| Fruits and      |         |          |          | 52,753 |         |
| Vegetables      |         |          |          |        |         |
+-----------------+---------+----------+----------+--------+---------+
| Wine/beer       | 43,456  | 57,299   | 66,006   | 44,206 | 50,274  |
+-----------------+---------+----------+----------+--------+---------+
| Red Meats       | 1,      | 1        | 1        | 4      | 725,950 |
|                 | 077,403 | ,126,343 | .067,870 | 70,885 |         |
| (fresh/         |         |          |          |        |         |
| chilled/frozen) |         |          |          |        |         |
+-----------------+---------+----------+----------+--------+---------+
| Red Meats       | 89,211  | 157,087  | 91,624   | 53,095 | 60,109  |
|                 |         |          |          |        |         |
| (prep           |         |          |          |        |         |
| ared/preserved) |         |          |          |        |         |
+-----------------+---------+----------+----------+--------+---------+
| Rice            | 103,465 | 140,398  | 182,823  | 1      | 109,282 |
|                 |         |          |          | 29,150 |         |
+-----------------+---------+----------+----------+--------+---------+
| Soybean Meal    | 86,757  | 150,812  | 216,477  | 1      | 184,026 |
|                 |         |          |          | 44,434 |         |
+-----------------+---------+----------+----------+--------+---------+
| Wheat flour     | 5,700   | 9,998    | 7,846    | 5,089  | 5,540   |
+-----------------+---------+----------+----------+--------+---------+
| Forest products | 384,301 | 396,817  | 458,614  | 3      | 333,294 |
|                 |         |          |          | 00,852 |         |
+-----------------+---------+----------+----------+--------+---------+

\*Indicates the percent growth shown in the first six months of 2004 as
compared to the same period in 2003.

\*\*The large decrease in sales of fresh/chilled frozen red meats and
the small increase in prepared/preserved red meats were due to the BSE
case in the United States and subsequent import ban. US red meat sales
to Mexico are an excellent long-term prospect.

**Section V. Key Contacts and Further Information**

The primary mission of the US Agricultural Trade Office (ATO) in Mexico
City is to assist in the market development and promotion of US food and
agricultural products in the Mexican market. There are a wide variety of
activities and services that the ATO, along with other private sector
representatives called "cooperators," make available to help develop US
agricultural interests in Mexico. If you have any questions or comments
regarding this report or need assistance exporting US food and beverage
products to Mexico, please contact the ATOs in Mexico City or Monterrey.

The ATO Mexico City has changed its location along with the nine
cooperators that were formerly co-located at the Jaime Balmes address.
The addresses below are updated and should be used for all contacts.

**US Agricultural Trade Office**, **Mexico City**

Bruce Zanin, Director

Liverpool No. 31

Col. Juares

11510 Mexico, DF

Tel: (011-5255) 5080-2000 Ext. 4371

Tel: (011-5255) 5140-2600

Email: atomexico@usda.gov

**US Agricultural Trade Office, Monterrey, Mexico**

Dan Martinez, Director

Oficinas en el Parque Torrell

Blvd. Diaz Ordaz No. 140, Piso 7

Col. Santa Maria, 64650

Monterrey, Nuevo Leon

Tel: (011-5281) 8333-5289

Fax: (011-5281) 8333-1248

Email: atomonterrey@usda.gov

# Cooperators

AMERICAN FOREST & PAPER ASSOCIATION

Claudia Villagomez, Director

Sierra Candela \# 111- 507

Col. Lomas de Chapultepec

11000 Mexico, D.F.

Tel: (011-5255) 2626-1838

Fax: (011-5255) 2623-1853

Email: cvillagomez@prodigy.net.mx

AMERICAN HARDWOOD EXPORT COUNCIL

Luis Zertuche, Director

Sierra Candela \# 111- 507

Col. Lomas de Chapultepec

11000 Mexico, D.F.

Tel: (011-5255) 2623-1850

Fax: (011-5255) 2623-1853

Email: luiszertuche@prodigy.net.mx

AMERICAN SOFTWOODS AND AMERICAN PLYWOOD ASSOCIATION

Fernanda Vale Garza, Director

Sierra Candela \# 111- 507

Col. Lomas de Chapultepec

11000 Mexico, D.F.

Tel: (011-5255) 2623-1833

Fax: (011-5255) 2623-1834

Email: fvale@softwood.org

CALIFORNIA WINE INSTITUTE

Jessika P. Gonzales, Director

Sur 75 \# 4415

Col. Viaductor Piedad

08200, Mexico, D.F.

Tel/Fax: (011-5255) 5538-3390

Email: jessygonzalez@yahoo.com

COTTON INCORPORATED

Jaime Flores Cornejo

Av. Insurgentes Sur #1605-9C

03900 México, D.F.

Tel: (011-5255) 5663-4020

Fax: (011-5255) 5663-4023

Email: JFlores@cottoninc.com

GRUPO PM SA DE CV

Luis Moreno, Director

Mercurio 24, Col. Jardines de Cuernavaca

62580 Cuernavaca, Morelos

Tel: (011-52) (777) 316-7370

Fax: (011-52) (777) 316-7369

Email gruopopm@grupopm.com

NATIONAL COTTONSEED PRODUCTS ASSOCIATION

Ricardo Silva, Representative

Paseo de las Eglantinas 4157

Fracc. Parques de la Canada

25020 Saltillo, Coahuila

Tel/Fax: (011-52-844) 489-3285

Email: ricsilva@infosel.net.mx

MARKETING SOLUTIONS

Raul Caballero, Director

San Juan de Los Lagos #52, S. Monica

54050 Naucalpan, Edo. de Mexico

Tel: (011-5255) 5362-7407

Fax: (011-5255) 5362-6724

Email: raul@marketingsolutionsfirm.com

NATIONAL RENDERERS ASSOCIATION

German Davalos, Director

Sierra Candela \# 111- 501

Col. Lomas de Chapultepec

11000 Mexico, D.F.

Tel: (011-5255) 5980-6080

Fax: (011-5255) 5980-6081

Email: nramex@nralatinamerica.org

NATIONAL SUNFLOWER ASSOCIATION

Jose Luis Escamilla, Representative

Jose Ma. Rico #212-702

Col. Del Valle

03100 Mexico, D.F.

Tel: (011-5255) 5524-8273/5524-8192

Fax: (011-5255) 5534-8997

Email: escgrain@avantel.net, rivercat@compuserve.com.mx

US DAIRY EXPORT COUNCIL

Larry Solberg, Director

Av. Lindavista #25 Depto. 405

Col.Lindavista

07050 Mexico, D.F.

Tel & Fax: (011-5255) 5119-0475/76 /77

Email: rafernandez@marcatel.com.mx

US GRAINS COUNCIL

Ricardo Celma, Director

Jaime Balmes \# 8 - 602

Col. Los Morales Polanco

11510 Mexico, D.F.

Tel: (011-5255) 5282-0973/0974/0977/0244

Fax: (011-5255) 5282-0968, 5282-0969

Email: mexico@grains.org.mx

US MEAT EXPORT FEDERATION

Gilberto Lozano, Director

Jaime Balmes \# 8 - 602

Col. Los Morales Polanco

11510 Mexico, D.F.

Tel: (011-5255) 5281-6100

Fax: (011-5255) 5281-6013

Email: mexico@usmef.org

US POULTRY & EGG EXPORT COUNCIL

Jose Luis Cruz, Director

Oficinas en el Parque Torrell

Blvd. Diaz Ordaz No. 140, Piso 7

Col. Santa Maria, 64650

Monterrey, Nuevo Leon

Tel: (011-5281) 8333-7582

Fax: (011-5281) 8333-1248

Email: luispo@prodigy.net.mx

Alma Lilia de Leon, Deputy Director

Sierra Candela \# 111- 509

Col. Lomas de Chapultepec

11000 Mexico, D.F..

Tel: (011-5255) 5980-6090

Fax: (011-5255) 5980-6085

Email: aliliadeleon@prodigy.net.mx

US SOYBEAN EXPORT COUNCIL

Mark Andersen, Director

Guadalajara World Trade Center

Av. Mariano Otero \# 1249

Col. Rinconada del Bosque

44530, Guadalajara, Jal.

Tel: (011-5233) 5000-0990

Fax: (011-5233) 5000-0999

Email: usamex@soyamex.com.mx

US WHEAT ASSOCIATES

####### Mitch Skalicky, Director

**Temporary Address:**

Paseo de Tamarindos No. 400-A

Piso 5 (Fifth Floor)

Colonia Bosques de las Lomas

Mexico City, D.F. 05120

Tel: (52-55) 5091-4413

(52-55) 5091-4414

(52-55) 5091-4415

Fax (52-55) 5091-4310

Email: mskalicky@uswheat.org

WASHINGTON STATE APPLE COMMISSION

Juan Carlos Moreira Martin

Hda. Coyotillos #128 Juriquilla

76230, Queretaro, Qro.

Tel: (011-442) 234-1989

Email: moreira@prodigy.net.mx.

Appendix I. Statistics

A. Key Trade and Demographic Information

  ----------------------------------------- -----------------------------
  Agricultural Imports from All Countries   \$11,800 million
  (1)                                       

  US Market Share (1)                       73 percent

  Consumer Food Imports from All Countries  \$5,713 million
  (1)                                       

  US Market Share (1)                       70 percent

  Edible Fishery Imports from All Countries \$206 million
  (1)                                       

  US Market Share (1)                       27 percent

  Total Population/Annual Growth Rate       105.36 million/ 1.1 percent

  Urban Population (Urbanization 75%)       78.80 million

  Number of Metropolitan Areas (3)          8

  Size of the Middle Class (4)              31 percent of total
                                            population

  Per Capita Gross Domestic Product         \$6,758

  Unemployment Rate                         3.6 percent

  Percent of Female Population Employed (5) 45 percent

  Exchange Rate                             US\$1 = \$10.5 Mexican Peso
                                            (12/05)
  ----------------------------------------- -----------------------------

*Footnotes*

\(1\) United Nations Statistical Data

\(2\) Figures based on growth of 1.1 percent from 104.21 million 2003
figure

\(3\) Population in excess of 1,000,000; in order from largest: Mexico
City, Guadalajara, Monterrey, Puebla, Leon, Toluca, Ciudad Juarez,
Tijuana

\(4\) This measurement is from 1996, measuring the percent of the
population in the middle two income brackets, no more recent income
bracket information has been published

\(5\) Calculated using total number of women 15 --64 years old:
30,255,456 and total number of women employed: 13,490,915, Source INEGI
2000

**B. Mexican Imports**

# Mexican Imports from the United States and the World

(In Millions of USD)

<table>
<colgroup>
<col style="width: 31%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 8%" />
<col style="width: 6%" />
</colgroup>
<tbody>
<tr class="odd">
<td></td>
<td colspan="3"><strong>Imports from the world</strong></td>
<td colspan="3"><strong>Imports from the US</strong></td>
<td colspan="3"><strong>US Market Share</strong></td>
</tr>
<tr class="even">
<td></td>
<td><strong><u>2001</u></strong></td>
<td><strong><u>2002</u></strong></td>
<td><strong><u>2003</u></strong></td>
<td><strong><u>2001</u></strong></td>
<td><strong><u>2002</u></strong></td>
<td><strong><u>2003</u></strong></td>
<td><strong><u>2001</u></strong></td>
<td><strong><u>2002</u></strong></td>
<td><strong><u>2003</u></strong></td>
</tr>
<tr class="odd">
<td><h2 id="consumer-oriented-ag-total">Consumer Oriented Ag
Total</h2></td>
<td>5659</td>
<td>5438</td>
<td>5713</td>
<td>3851</td>
<td>3795</td>
<td>4016</td>
<td>68</td>
<td>70</td>
<td>70</td>
</tr>
<tr class="even">
<td>Snack Foods (Excl. Nuts)</td>
<td>296</td>
<td>284</td>
<td>312</td>
<td>165</td>
<td>167</td>
<td>181</td>
<td>56</td>
<td>59</td>
<td>58</td>
</tr>
<tr class="odd">
<td>Breakfast Cereals &amp; Pancake Mix</td>
<td>36</td>
<td>43</td>
<td>44</td>
<td>34</td>
<td>41</td>
<td>42</td>
<td>93</td>
<td>96</td>
<td>94</td>
</tr>
<tr class="even">
<td>Red Meats, Fresh/Chilled/Frozen</td>
<td>1515</td>
<td>1586</td>
<td>1507</td>
<td>1156</td>
<td>1250</td>
<td>1227</td>
<td>76</td>
<td>79</td>
<td>81</td>
</tr>
<tr class="odd">
<td>Red Meats, Prepared/Preserved</td>
<td>192</td>
<td>173</td>
<td>161</td>
<td>177</td>
<td>154</td>
<td>136</td>
<td>93</td>
<td>89</td>
<td>85</td>
</tr>
<tr class="even">
<td>Poultry Meat</td>
<td>300</td>
<td>246</td>
<td>351</td>
<td>280</td>
<td>233</td>
<td>340</td>
<td>93</td>
<td>95</td>
<td>97</td>
</tr>
<tr class="odd">
<td>Dairy Products (Excl. Cheese)</td>
<td>737</td>
<td>546</td>
<td>610</td>
<td>232</td>
<td>171</td>
<td>234</td>
<td>31</td>
<td>31</td>
<td>38</td>
</tr>
<tr class="even">
<td>Cheese</td>
<td>191</td>
<td>179</td>
<td>190</td>
<td>69</td>
<td>67</td>
<td>76</td>
<td>36</td>
<td>37</td>
<td>40</td>
</tr>
<tr class="odd">
<td>Eggs &amp; Products</td>
<td>24</td>
<td>29</td>
<td>33</td>
<td>23</td>
<td>27</td>
<td>32</td>
<td>93</td>
<td>91</td>
<td>98</td>
</tr>
<tr class="even">
<td>Fresh Fruit</td>
<td>481</td>
<td>411</td>
<td>416</td>
<td>349</td>
<td>295</td>
<td>285</td>
<td>73</td>
<td>72</td>
<td>68</td>
</tr>
<tr class="odd">
<td>Fresh Vegetables</td>
<td>119</td>
<td>121</td>
<td>115</td>
<td>104</td>
<td>101</td>
<td>96</td>
<td>88</td>
<td>83</td>
<td>83</td>
</tr>
<tr class="even">
<td>Processed Fruit &amp; Vegetables</td>
<td>354</td>
<td>365</td>
<td>431</td>
<td>231</td>
<td>238</td>
<td>280</td>
<td>65</td>
<td>65</td>
<td>65</td>
</tr>
<tr class="odd">
<td>Fruit &amp; Vegetable Juices</td>
<td>42</td>
<td>31</td>
<td>29</td>
<td>34</td>
<td>24</td>
<td>19</td>
<td>81</td>
<td>78</td>
<td>63</td>
</tr>
<tr class="even">
<td>Tree Nuts</td>
<td>59</td>
<td>49</td>
<td>62</td>
<td>50</td>
<td>43</td>
<td>56</td>
<td>85</td>
<td>87</td>
<td>90</td>
</tr>
<tr class="odd">
<td>Wine &amp; Beer</td>
<td>113</td>
<td>125</td>
<td>144</td>
<td>46</td>
<td>54</td>
<td>61</td>
<td>41</td>
<td>44</td>
<td>43</td>
</tr>
<tr class="even">
<td>Nursery Products &amp; Cut Flowers</td>
<td>51</td>
<td>49</td>
<td>57</td>
<td>33</td>
<td>29</td>
<td>33</td>
<td>65</td>
<td>59</td>
<td>57</td>
</tr>
<tr class="odd">
<td>Pet Foods (Dog &amp; Cat Food)</td>
<td>118</td>
<td>113</td>
<td>111</td>
<td>114</td>
<td>105</td>
<td>107</td>
<td>97</td>
<td>94</td>
<td>97</td>
</tr>
<tr class="even">
<td>Other Consumer-Oriented Products</td>
<td>1031</td>
<td>1086</td>
<td>1141</td>
<td>753</td>
<td>795</td>
<td>811</td>
<td>73</td>
<td>73</td>
<td>71</td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><h2 id="fish-and-seafood-products">Fish and Seafood
Products</h2></td>
<td><strong>156</strong></td>
<td><strong>167</strong></td>
<td><strong>206</strong></td>
<td><strong>53</strong></td>
<td><strong>53</strong></td>
<td><strong>56</strong></td>
<td><strong>34</strong></td>
<td><strong>31</strong></td>
<td><strong>27</strong></td>
</tr>
<tr class="odd">
<td>Salmon</td>
<td>8</td>
<td>6</td>
<td>5</td>
<td>2</td>
<td>1</td>
<td>1</td>
<td>19</td>
<td>21</td>
<td>26</td>
</tr>
<tr class="even">
<td>Surimi</td>
<td>3</td>
<td>2</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>39</td>
<td>48</td>
<td>33</td>
</tr>
<tr class="odd">
<td>Crustaceans</td>
<td>47</td>
<td>53</td>
<td>56</td>
<td>17</td>
<td>16</td>
<td>15</td>
<td>36</td>
<td>30</td>
<td>28</td>
</tr>
<tr class="even">
<td>Groundfish &amp; Flatfish</td>
<td>35</td>
<td>49</td>
<td>74</td>
<td>9</td>
<td>11</td>
<td>15</td>
<td>27</td>
<td>22</td>
<td>20</td>
</tr>
<tr class="odd">
<td>Molluscs</td>
<td>8</td>
<td>7</td>
<td>12</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>34</td>
<td>39</td>
<td>28</td>
</tr>
<tr class="even">
<td>Other Fishery Products</td>
<td>56</td>
<td>50</td>
<td>58</td>
<td>22</td>
<td>21</td>
<td>21</td>
<td>39</td>
<td>41</td>
<td>36</td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><h2 id="agricultural-products-total">Agricultural Products
Total</h2></td>
<td><strong>11627</strong></td>
<td><strong>11495</strong></td>
<td><strong>11800</strong></td>
<td><strong>8606</strong></td>
<td><strong>8635</strong></td>
<td><strong>8623</strong></td>
<td><strong>74</strong></td>
<td><strong>75</strong></td>
<td><strong>73</strong></td>
</tr>
<tr class="odd">
<td><h4 id="ag-fish-forestry-total">Ag Fish &amp; Forestry Total
</h4></td>
<td><strong>12698</strong></td>
<td><strong>12613</strong></td>
<td><strong>12995</strong></td>
<td><strong>9170</strong></td>
<td><strong>9200</strong></td>
<td><strong>9168</strong></td>
<td><strong>72</strong></td>
<td><strong>73</strong></td>
<td><strong>71</strong></td>
</tr>
</tbody>
</table>

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

**C. Mexican imports from Major Suppliers**

# 

# Mexican Imports from Top 15 Suppliers of Consumer Foods and Edible Fishery Products

(In Thousands of USD)

+----------+------+------+-------+---+----------+------+------+-----+
| ## CO    |      |      |       |   | ##       |      |      |     |
| NSUMER-O |      |      |       |   |  FISH &  |      |      |     |
| RIENTED  |      |      |       |   | SEAFOOD  |      |      |     |
| PRODUCTS |      |      |       |   | PRODUCTS |      |      |     |
+----------+------+------+-------+---+----------+------+------+-----+
|          | **   | **   | **    |   |          | **   | **   | *   |
|          | [200 | [200 | [2003 |   |          | [200 | [200 | *[2 |
|          | 1]{. | 2]{. | ]{.un |   |          | 1]{. | 2]{. | 003 |
|          | unde | unde | derli |   |          | unde | unde | ]{. |
|          | rlin | rlin | ne}** |   |          | rlin | rlin | und |
|          | e}** | e}** |       |   |          | e}** | e}** | erl |
|          |      |      |       |   |          |      |      | ine |
|          |      |      |       |   |          |      |      | }** |
+----------+------+------+-------+---+----------+------+------+-----+
| **United | **3  | **3  | *     |   | **United | *    | *    | **5 |
| States** | 8511 | 7946 | *4016 |   | States** | *533 | *525 | 642 |
|          | 91** | 90** | 133** |   |          | 78** | 97** | 3** |
+----------+------+------+-------+---+----------+------+------+-----+
| Chile    | 27   | 26   | 3     |   | China    | 7130 | 1    | 29  |
|          | 2211 | 8410 | 03182 |   | (Peoples |      | 3982 | 136 |
|          |      |      |       |   | Republic |      |      |     |
|          |      |      |       |   | of)      |      |      |     |
+----------+------+------+-------+---+----------+------+------+-----+
| Canada   | 37   | 35   | 2     |   | Chile    | 1    | 1    | 19  |
|          | 3673 | 1270 | 71343 |   |          | 6540 | 5731 | 981 |
+----------+------+------+-------+---+----------+------+------+-----+
| New      | 24   | 22   | 2     |   | Costa    | 6850 | 7829 | 11  |
| Zealand  | 6516 | 6596 | 56932 |   | Rica     |      |      | 232 |
+----------+------+------+-------+---+----------+------+------+-----+
| Spain    | 6    | 6    | 80584 |   | V        | 8490 | 8938 | 10  |
|          | 5042 | 9728 |       |   | enezuela |      |      | 591 |
+----------+------+------+-------+---+----------+------+------+-----+
| A        | 9    | 9    | 80362 |   | Canada   | 6535 | 8166 | 10  |
| ustralia | 5987 | 3334 |       |   |          |      |      | 575 |
+----------+------+------+-------+---+----------+------+------+-----+
| A        | 8    | 5    | 73263 |   | Norway   | 7005 | 7641 | 8   |
| rgentina | 8441 | 1134 |       |   |          |      |      | 190 |
+----------+------+------+-------+---+----------+------+------+-----+
| Germany  | 6    | 5    | 66806 |   | Spain    | 8901 | 1    | 7   |
|          | 7099 | 4133 |       |   |          |      | 0711 | 706 |
+----------+------+------+-------+---+----------+------+------+-----+
| Net      | 6    | 6    | 66552 |   | Taiwan   | 4418 | 6136 | 6   |
| herlands | 6386 | 8563 |       |   | (Es      |      |      | 030 |
|          |      |      |       |   | timated) |      |      |     |
+----------+------+------+-------+---+----------+------+------+-----+
| Ireland  | 3    | 4    | 49606 |   | Ecuador  | 8755 | 6688 | 5   |
|          | 7085 | 7135 |       |   |          |      |      | 784 |
+----------+------+------+-------+---+----------+------+------+-----+
| France   | 4    | 3    | 44431 |   | Thailand | 1472 | 3773 | 5   |
|          | 1890 | 5994 |       |   |          |      |      | 243 |
+----------+------+------+-------+---+----------+------+------+-----+
| Uruguay  | 4    | 3    | 44380 |   | India    | 4282 | 3674 | 3   |
|          | 6464 | 9374 |       |   |          |      |      | 683 |
+----------+------+------+-------+---+----------+------+------+-----+
| Poland   | 9    | 3    | 36375 |   | A        | 1970 | 1588 | 3   |
|          | 6166 | 6829 |       |   | rgentina |      |      | 040 |
+----------+------+------+-------+---+----------+------+------+-----+
| Denmark  | 2    | 2    | 31434 |   | Colombia | 1521 | 2727 | 2   |
|          | 4503 | 5222 |       |   |          |      |      | 757 |
+----------+------+------+-------+---+----------+------+------+-----+
| Belgium  | 3    | 3    | 30510 |   | Phi      | 1216 | 1461 | 2   |
|          | 3989 | 2679 |       |   | lippines |      |      | 715 |
+----------+------+------+-------+---+----------+------+------+-----+
| Other    | 25   | 24   | 2     |   | Other    | 1    | 1    | 22  |
|          | 2175 | 2602 | 51022 |   |          | 7840 | 5779 | 598 |
+----------+------+------+-------+---+----------+------+------+-----+
|          |      |      |       |   |          |      |      |     |
+----------+------+------+-------+---+----------+------+------+-----+
| *        | **5  | **5  | 57    |   | *        | **   | **   | *   |
| *World** | 6588 | 4376 | 12915 |   | *World** | 1563 | 1674 | *20 |
|          | 18** | 93** |       |   |          | 03** | 21** | 568 |
|          |      |      |       |   |          |      |      | 4** |
+----------+------+------+-------+---+----------+------+------+-----+

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

**D.** **Charts comparing composition by product category for US sales
of agricultural, fish and forestry products**

Product segment's share of Mexico's \$8.49 billion market for

US agricultural, fish and forestry products 2004

# ![](media/image2.wmf)

![](media/image3.wmf)Product segment's share of Mexico's \$6.1 billion
market for

US agricultural, fish and forestry products 1999

[^1]: U.S. Department of Commerce, Bureau of the Census

[^2]: U.S. Department of Commerce, Bureau of the Census

[^3]: The reference for this section is a book by Eva Kras, [Management
    in Two Cultures]{.underline} , Intercultural Press, Inc, 1995, which
    provides an excellent comparison of the business cultures in the US
    and Mexico.