Required Report - public distribution

**Date:** 3/1/2008

**GAIN Report Number:** MX8013

MX0000

**Mexico**

**Poultry and Products**

**Semi Annual Report**

**2008**

**Approved by:**

![](media/image1.wmf)Suzanne E. Heinen

U.S. Embassy

**Prepared by:**

Gabriel Hernandez and Jeff Nawn

**Report Highlights:**

Mexico's overall production and consumption of chicken meat increased
slightly in CY 2007. In terms of volume, U.S. exports of chicken meat to
Mexico were down by roughly 11 percent in CY 2007, reflecting greater
demand for the U.S.'s exportable supply from markets such as Russia and
China, as well as greater domestic production capacity. However, due to
higher global prices, the value of U.S. chicken exports to Mexico
increased by nearly seven percent in CY 2007.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Mexico City \[MX1\]

\[MX\]

Table of Contents

[PS&D Table 3](#psd-table)

[SECTION I. SITUATION AND OUTLOOK 3](#section-i.-situation-and-outlook)

[CHICKEN MEAT 3](#chicken-meat)

[PRODUCTION 3](#production)

[CONSUMPTION 4](#consumption)

[TRADE 5](#trade)

[REGULATIONS FOR POULTRY AND POULTRY PRODUCTS EXPORTS
6](#regulations-for-poultry-and-poultry-products-exports)

[POLICY 6](#policy)

[MARKETING 7](#marketing)

[SECTION II. STATISTICAL TABLES 8](#section-ii.-statistical-tables)

[BROILERS WET MARKET PRICES 8](#broilers-wet-market-prices)

[CHICKEN LEG QUARTER WHOLESALE PRICES
8](#chicken-leg-quarter-wholesale-prices)

[MEXICAN IMPORTS FOR SELECTED POULTRY PRODUCTS Jan-Oct 2007
9](#mexican-imports-for-selected-poultry-products-jan-oct-2007)

# PS&D Table

  --------------- ------------ ---------- ----------- ---------- ---------- -------------- ---------- ---------- -----------
  **PSD Table**                                                                                                  

  **Country**     **Mexico**                                                                                     

  **Commodity**   **Poultry,                                                (MIL                                 
                  Meat,                                                     HEAD)(1000                           
                  Broiler**                                                 MT)(PERCENT)                         

                  2006 Revised                        2007                                 2008                  
                                                      Estimate                             Forecast              

                  USDA\        Post\      Post\       USDA\      Post\      Post\          USDA\      Post\      Post\
                  Official     Estimate   Estimate\   Official   Estimate   Estimate\      Official   Estimate   Estimate\
                                          New                               New                                  New

  **Market Year   01/2006                             01/2007                              01/2008               
  Begin**                                                                                                        

  Inventory       0            0          0           0          0          0              0          0          0
  (Reference)                                                                                                    

  Slaughter       0            0          0           0          0          0              0          0          0
  (Reference)                                                                                                    

  Beginning       0            0          0           0          0          0              0          0          0
  Stocks                                                                                                         

  Production      2,592        2,592      2,592       2,656      2,656      2,730          2,722      2,722      2,825

  Whole, Imports  0            0          0           0          0          0              0          0          0

  Parts, Imports  430          430        430         415        415        400            425        425        400

  Intra-EU        0            0          0           0          0          0              0          0          0
  Imports                                                                                                        

  Other Imports   0            0          0           0          0          0              0          0          0

  Total Imports   430          430        430         415        415        400            425        425        400

  Total Supply    3,022        3,022      3,022       3,071      3,071      3,130          3,147      3,147      3,225

  Whole, Exports  0            0          0           0          0          0              0          0          0

  Parts, Exports  1            1          6           1          1          9              1          0          12

  Intra EU        0            0          0           0          0          0              0          0          0
  Exports                                                                                                        

  Other Exports   0            0          0           0          0          0              0          0          0

  Total Exports   1            1          6           1          1          9              1          0          12

  Human           3,021        3,021      3,016       3,070      3,070      3,121          3,146      3,147      3,213
  Consumption                                                                                                    

  Other Use,      0            0          0           0          0          0              0          0          0
  Losses                                                                                                         

  Total Dom.      3,021        3,021      3,016       3,070      3,070      3,121          3,146      3,147      3,213
  Consumption                                                                                                    

  Total Use       3,022        3,022      3,022       3,071      3,071      3,130          3,147      3,147      3,225

  Ending Stocks   0            0          0           0          0          0              0          0          0

  Total           3,022        3,022      3,022       3,071      3,071      3,130          3,147      3,147      3,225
  Distribution                                                                                                   
  --------------- ------------ ---------- ----------- ---------- ---------- -------------- ---------- ---------- -----------

*Not official USDA data*

# SECTION I. SITUATION AND OUTLOOK

# CHICKEN MEAT

## PRODUCTION

## 

Mexico's chicken meat production forecast for MY 2008 (Jan-Dec) was
revised upward by 3.8 percent from the previous forecast to 2.8 MMT.
Production had been underestimated because rapid changes in the global
feed grain market have significantly driven up consumer demand for
chicken meat, as a substitute for more expensive protein sources, such
as red meats. Additionally, rapidly growing incomes in third-country
markets such as China and Russia, and the resulting sharp increase in
demand for chicken meat, have actually dampened imports from the United
States, thus allowing domestic producers to supply the growing domestic
demand. Furthermore, structural changes within the Mexican poultry
production chain, namely consolidation and greater vertical integration,
have also contributed to the increase in Mexican chicken production.

Between January 1, 2003, and December 31, 2007, Mexico and the United
States maintained a voluntary safeguard agreement for chicken leg
quarters (CLQs). This safeguard provided short term trade protection to
producers in Mexico, allowing the industry to invest in modern
technology and more efficient production practices.

Mexican producers have effectively taken advantage of their comparative
strengths, such as being able to deliver fresh poultry, and
understanding the unique characteristics of their consumers' tastes and
preferences. This year the poultry industry will also benefit from the
elimination of tariff rate quotas (TRQs) for U.S. corn. This policy
change will allow the domestic industry to source feed grains from the
best supplier, U.S. or domestic, at any given moment. However, because
of higher global grain prices, the total costs of production within the
Mexican poultry industry will likely experience a marginal increase,
resulting in more moderate growth compared to years past. The MY 2007
production estimate has been adjusted slightly upward based on final
industry data. MY 2006 remains unchanged.

According to the Mexican Poultry Producers Association (UNA), MY 2006
feed consumption is estimated at 13.4 MMT, (8.4 MMT of feed grains, 2.7
MMT of oilseeds and protein meals, and 2.3 MMT of other raw materials).
Preliminary UNA estimates indicate that feed consumption grew 2.2
percent in MY 2007 and is expected to grow by roughly the same
percentage in MY 2008. Feed costs in Mexico represent 55 to 60 percent
of the total cost of production. Poultry producers continue to be major
users of imported feedstuffs from the United States. Producers indicate
that 60 percent of their imports are comprised of sorghum and yellow
corn, 23 percent from oilseeds and protein meals, and 17 percent from
other products such as safflower, orthophosphate, calcium, and
methionine. However, in 2008 the percentage of imported corn and sorghum
could change depending on international grain and oilseed prices.
Historically, Mexico has been a white corn producer and only a small
percentage of its corn production has been utilized as animal feed,
which has compelled the poultry industry to import grain from the United
States. The surge in international corn prices starting in the fall of
2006 led to increases at the retail level for poultry and egg prices at
the beginning of 2007. These price hikes are expected to continue
throughout 2008. In addition to higher grain prices, higher prices for
electricity, packing materials, and transportation costs continue to add
to production costs.

Industry consolidation and investment in infrastructure are expected to
continue, at a slower but steady pace, in the medium-term. In an effort
to cope with high input prices, large and medium-size companies will
likely merge into cooperatives and associations, integrating small
producers into their productive process as contract producers.

## CONSUMPTION

Chicken producers continue to enjoy favorable demand for their products.
Chicken meat consumption for MY 2008 is forecast to increase by 2.1
percent due to several factors, including population growth, the
affordability of chicken relative to other meats, effective marketing
campaigns, increased usage in processed food products, and improved
product quality. Increased consumer concerns about cholesterol and other
health issues are also creating more marketing opportunities for chicken
meat. Supermarkets continue displaying imported poultry meat, including
CLQs, along with domestic produce.

The MY 2007 domestic consumption estimate was revised upward from
previous estimates, due to an increase in demand for value-added
products, reflecting a population that is broadening its consumption
patterns. MY 2006 consumption was revised downward to reflect recently
update official export figures for value-added products.

The average price for CLQs in Mexico City in CY 2007 was U.S. \$0.98/lb.
Wholesale CLQ prices in Mexico City fluctuated throughout CY 2007, the
lowest point having been in March, when CLQs sold for about U.S.
\$0.75/lb. CLQ prices peaked in May at roughly U.S. \$1.38/lb. Broilers
sold in wet markets at prices ranging from U.S. \$0.87 to \$1.24 per
pound. The average broiler price in 2007 was U.S. \$ 1.01. The UNA
estimates that the average per capita consumption for chicken increased
to 57.15 lb. in 2007, slightly higher than the original estimate of
55.66 lb per capita. In light of the expected economic deceleration in
Mexico, combined with high international corn prices, per capita
consumption for 2008 is forecast to show similar levels to those of
2007. However poultry meat will continue to be cheaper compared to other
protein sources, and is more affordable for low and medium-income
households.

Consumers continue to prefer fresh whole chickens to chicken cuts.
However, purchases of chicken cuts are increasing slowly, mainly in
supermarkets servicing higher-income consumers. Consumption of white
meat, CLQs and value-added products continue to increase.

## TRADE

Chicken and turkey meat are the primary poultry products imported by
Mexico. The processing industry imports most mechanically separated
poultry, chicken and turkey (MSC & MST), and poultry cuts as inputs for
the domestic sausage and cold-cut industries. Imports of chicken cuts,
mainly leg quarters, and mechanically separated chicken (MSC) for MY
2008 are forecast to decrease, despite the greater demand from the
processing industry. This decline in imports is mainly attributed to
high international chicken prices, which have diverted much of the U.S.
exportable supply to third-country markets such as China and Russia, as
well as greater domestic production. Imports of chicken meat for MY 2007
were revised downward from previous estimates to reflect lower demand
from the processing industry, but also due to the effect of higher corn
prices. MY 2006 import data remains unchanged. The United States is the
main supplier of chicken meat to Mexico. However, Chile's presence in
the poultry market is expected to continue to increase as importers seek
to hedge their risk by diversifying their supply channels.

Industry numbers indicate that CLQs imported under the poultry safeguard
fulfilled the 104,060 MT tariff-rate-quota (TRQ) limit for MY 2007.
According to industry trade data, imported CLQs under H.T.S. 0207.13.03
& 0207.14.04 were 112,918 MT as of November 2007. According to official
data, the CLQ TRQ for MY 2006 was 100 percent filled.

In recent years, the Mexican export trend of value-added products has
been increasing due to the "export culture" that the industry and
government of Mexico are developing in the sector (See Policy section).
Specifically, the export of value-added products (mainly sausages) has
been increasing due to the availability of raw material and a more
sophisticated and efficient infrastructure. The Mexican export figures
of MSC for MY 2006 and MY 2007, as well as the forecast for MY 2008 were
revised upward.

The following table summarizes some of the regulations that are
currently being implemented by the Mexican government for imports of
live poultry and poultry meat from the United States.

##  REGULATIONS FOR POULTRY AND POULTRY PRODUCTS EXPORTS

+------------------+----------------+---+----------+-----------+--------+
| **ITEM**         | **RAW POULTRY  | * |          | **TABLE,  | **LIVE |
|                  | FOR RETAIL &   | * |          | SPF AND   | B      |
|                  | FOR FURTHER    | F |          | HATCHING  | IRDS** |
|                  | PROCESSING**   | U |          | EGGS**    |        |
|                  |                | L |          |           |        |
|                  |                | L |          |           |        |
|                  |                | Y |          |           |        |
|                  |                | C |          |           |        |
|                  |                | O |          |           |        |
|                  |                | O |          |           |        |
|                  |                | K |          |           |        |
|                  |                | E |          |           |        |
|                  |                | D |          |           |        |
|                  |                | P |          |           |        |
|                  |                | O |          |           |        |
|                  |                | U |          |           |        |
|                  |                | L |          |           |        |
|                  |                | T |          |           |        |
|                  |                | R |          |           |        |
|                  |                | Y |          |           |        |
|                  |                | M |          |           |        |
|                  |                | E |          |           |        |
|                  |                | A |          |           |        |
|                  |                | T |          |           |        |
|                  |                | A |          |           |        |
|                  |                | N |          |           |        |
|                  |                | D |          |           |        |
|                  |                | E |          |           |        |
|                  |                | G |          |           |        |
|                  |                | G |          |           |        |
|                  |                | P |          |           |        |
|                  |                | R |          |           |        |
|                  |                | O |          |           |        |
|                  |                | D |          |           |        |
|                  |                | U |          |           |        |
|                  |                | C |          |           |        |
|                  |                | T |          |           |        |
|                  |                | S |          |           |        |
|                  |                | * |          |           |        |
|                  |                | * |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Export Status    | YES            |   | YES      | YES       | YES    |
| All U.S. States  |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Required         | YES            |   | NO       | YES       | YES    |
| Language On      |                |   |          |           |        |
| Cleaning And     |                |   |          |           |        |
| Disinfection Of  |                |   |          |           |        |
| Trucks           |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Required Sealing | NO             |   | NO       | NO        | YES    |
| Of Trucks At     |                |   |          |           |        |
| Point Of Origin  |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Required         | YES            |   | NO       |           |        |
| Language that    |                |   |          |           |        |
| Product is Fit   |                |   |          |           |        |
| for Human        |                |   |          |           |        |
| Consumption and  |                |   |          |           |        |
| Freely Marketed  |                |   |          |           |        |
| in the U.S.      |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Agar Gel or      |                |   | NO       |           |        |
| ELISA Test       |                |   |          |           |        |
| Required         |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| Certification    | YES            |   | YES      | YES       | YES    |
| Requirements On  |                |   |          |           |        |
| END              |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+
| The boxes of     |                |   |          |           |        |
| table eggs as    |                |   |          |           |        |
| well as SPF eggs |                |   |          |           |        |
| must show the    |                |   |          |           |        |
| stamp of the     |                |   |          |           |        |
| competent        |                |   |          |           |        |
| authority.       |                |   |          |           |        |
|                  |                |   |          |           |        |
| SPF, hatching    |                |   |          |           |        |
| eggs and live    |                |   |          |           |        |
| birds should be  |                |   |          |           |        |
| freely marketed  |                |   |          |           |        |
| in the U.S.      |                |   |          |           |        |
|                  |                |   |          |           |        |
| When a plant and |                |   |          |           |        |
| farm/flock is    |                |   |          |           |        |
| registered under |                |   |          |           |        |
| the National     |                |   |          |           |        |
| Poultry          |                |   |          |           |        |
| Improvement      |                |   |          |           |        |
| Plant (NPIP),    |                |   |          |           |        |
| the Agar Gel or  |                |   |          |           |        |
| ELISA test will  |                |   |          |           |        |
| not be required; |                |   |          |           |        |
| otherwise the    |                |   |          |           |        |
| tests will be    |                |   |          |           |        |
| required by      |                |   |          |           |        |
| SAGARPA.         |                |   |          |           |        |
|                  |                |   |          |           |        |
| END statement    |                |   |          |           |        |
| for meat, meat   |                |   |          |           |        |
| products and by  |                |   |          |           |        |
| products. -      |                |   |          |           |        |
| "That the        |                |   |          |           |        |
| product comes    |                |   |          |           |        |
| from flocks that |                |   |          |           |        |
| have a           |                |   |          |           |        |
| monitoring       |                |   |          |           |        |
| program of 70    |                |   |          |           |        |
| birds that began |                |   |          |           |        |
| after 12 days of |                |   |          |           |        |
| age, using viral |                |   |          |           |        |
| isolation tests  |                |   |          |           |        |
| and              |                |   |          |           |        |
| identification   |                |   |          |           |        |
| of velogenic     |                |   |          |           |        |
| strains through  |                |   |          |           |        |
| a test that      |                |   |          |           |        |
| indicates        |                |   |          |           |        |
| intracerebral    |                |   |          |           |        |
| pathogenicity in |                |   |          |           |        |
| chicks of one    |                |   |          |           |        |
| day of age and   |                |   |          |           |        |
| that is carried  |                |   |          |           |        |
| out for each lot |                |   |          |           |        |
| that is          |                |   |          |           |        |
| delivered for    |                |   |          |           |        |
| slaughter,       |                |   |          |           |        |
| obtaining        |                |   |          |           |        |
| negative results |                |   |          |           |        |
| for Velogenic    |                |   |          |           |        |
| Newcastle        |                |   |          |           |        |
| disease, or that |                |   |          |           |        |
| comes from a     |                |   |          |           |        |
| country free of  |                |   |          |           |        |
| Velogenic        |                |   |          |           |        |
| Newcastle        |                |   |          |           |        |
| Disease. "       |                |   |          |           |        |
|                  |                |   |          |           |        |
| For additional   |                |   |          |           |        |
| information      |                |   |          |           |        |
| regarding        |                |   |          |           |        |
| poultry meat and |                |   |          |           |        |
| egg products     |                |   |          |           |        |
| exports to       |                |   |          |           |        |
| Mexico see the   |                |   |          |           |        |
| web page         |                |   |          |           |        |
| USDA/FSIS/Export |                |   |          |           |        |
| Library at       |                |   |          |           |        |
| [http            |                |   |          |           |        |
| ://www.fsis.usda |                |   |          |           |        |
| .gov](http://www |                |   |          |           |        |
| .fsis.usda.gov/) |                |   |          |           |        |
| (Export          |                |   |          |           |        |
| Requirements for |                |   |          |           |        |
| meat and poultry |                |   |          |           |        |
| products).       |                |   |          |           |        |
+------------------+----------------+---+----------+-----------+--------+

## POLICY

In light of the recent surge in corn prices, the Mexican government
(GOM) is looking for the appropriate mechanism to support poultry
producers. To this end, the Mexican Ministry of Agriculture (SAGARPA) is
working in conjunction with UNA to develop a program to arm the sector
with the tools that it needs to become more competitive in the global
marketplace. Among the most important issues being discussed is the
creation and promotion of "Good Manufacturing Practices" for the poultry
industry. This will allow domestic producers to produce value-added
products not only for foreign markets, but also for domestic retailers,
a market that domestic produces are often excluded from for lack of
sanitary controls and federal designations. SAGARPA is also working on
the development and promulgation of an "export culture" among producers.
The objective of such a program would be to educate producers about the
benefits of finding and supplying foreign market niches, particularly
for value-added poultry products, such as sausages, ready-to-cook
products and cold meats.

Recently SAGARPA announced a series of government support programs
intended to help the livestock sector cope with high international corn
prices. The "Extraordinary Program" establishes that under the "Forward
Contracts" and the "Anticipated Purchases" programs, poultry producers
sourcing domestic crops will be granted a subsidy of \$200 pesos per MT.
The eligible crops are: yellow and white corn and sorghum from the
Tamaulipas, Baja California, Sinaloa and Sonora states.

As previously reported, the SAGARPA import requirements are outlined in
the Zoosanitary Import Requirement Sheets (HRZ) by type of products.
Currently raw poultry imports are to comply with one of two options
regarding AI testing: a) a negative result on 59 samples to AGID or
ELISA tests or; b) that the flock/farm of origin is registered in the
U.S. National Poultry Improvement Plan (NPIP). SAGARPA and USDA agreed
that the NPIP would be deemed as an equivalent program to the regulation
NOM-044-ZOO-1995 "National Campaign against Avian Influenza" that was
modified and implemented on August 14, 2006.

## MARKETING

Generic advertising campaigns continue to be successful at increasing
domestic consumption of poultry products in Mexico. Currently, most
poultry meat in Mexico is sold as whole birds. The local industry
supplies and delivers whole birds through wholesale public and wet
markets overnight to the major cities. Mexico's supermarket segment is
growing rapidly, accounting for about 40 percent of overall food sales
in Mexico. As the industry expands, the share of poultry sold via
supermarkets continues to grow as consumers become more accepting of
poultry cuts and other poultry products. The Mexico office of the U.S.
Poultry and Egg Export Council (USAPEEC) has actively promoted poultry
products and processed products in various large retail and food service
exhibitions. USAPEEC will continue to support marketing strategies
within the NEPP (NAFTA Egg and Poultry Partnership), which promotes the
exchange of information and technical expertise between both the U.S.
and Mexican poultry industries.

# SECTION II. STATISTICAL TABLES

## BROILERS WET MARKET PRICES

## 

+-----------------+--------------+--------------+-------+-------------+
| **[Broilers Wet |              |              |       |             |
| Market Prices,  |              |              |       |             |
| Mexico City     |              |              |       |             |
| Pesos/kilogram  |              |              |       |             |
| ]{.smallcaps}** |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| ##              | 2005         | 2006         | 2007  | \% Change   |
| ###### **[Month |              |              |       | 06/07       |
| ]{.smallcaps}** |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Janua          | 21.63        | 23.04        | 27.00 | 17.18       |
| ry]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Februa         | 22.38        | 22.50        | 24.50 | 8.88        |
| ry]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Mar            | 22.50        | 22.73        | 21.00 | (7.61)      |
| ch]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Apr            | 22.83        | 19.25        | 21.22 | 10.23       |
| il]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [M              | 23.00        | 26.50        | 22.96 | (13.35)     |
| ay]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Ju             | 22.00        | 19.00        | 26.13 | 37.53       |
| ne]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Ju             | 22.67        | 20.33        | 22.50 | 10.67       |
| ly]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Augu           | 22.17        | 20.58        | 23.91 | 16.18       |
| st]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Septemb        | 21.38        | 21.50        | 24.86 | 15.63       |
| er]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Octob          | 20.25        | 21.25        | 25.67 | 20.80       |
| er]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Novemb         | 21.75        | 20.48        | 30.06 | 46.78       |
| er]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Decemb         | 19.00        | 23.58        | 24.42 | 3.56        |
| er]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Annual         | 21.80        | 21.73        | 24.52 | 12.84       |
| Av              |              |              |       |             |
| g.]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+
| [Whole chicken  |              |              |       |             |
| including       |              |              |       |             |
| off             |              |              |       |             |
| al]{.smallcaps} |              |              |       |             |
+-----------------+--------------+--------------+-------+-------------+

[Source:]{.smallcaps} [National poultry association, una.]{.smallcaps}

## CHICKEN LEG QUARTER WHOLESALE PRICES

+---------------+------------+------------+------------+--------------+
| **[Chicken    |            |            |            |              |
| Leg Quarter   |            |            |            |              |
| Wholesale     |            |            |            |              |
| Prices,       |            |            |            |              |
| Mexico        |            |            |            |              |
| City]{        |            |            |            |              |
| .smallcaps}** |            |            |            |              |
|               |            |            |            |              |
| **[Pes        |            |            |            |              |
| os/kilogram]{ |            |            |            |              |
| .smallcaps}** |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [Month        | 2006       | 2007       | 2008       | \% Change    |
| ]{.smallcaps} |            |            |            | 07/08        |
+---------------+------------+------------+------------+--------------+
| [January      | 17.00      | 21.06      | 22.05      | 4.7          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [February     | 17.96      | 20.61      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [March        | 18.91      | 18.23      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [April        | 18.30      | 19.99      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [May          | 20.87      | 25.07      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [June         | 24.66      | 23.81      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [July         | 18.57      | 23.99      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [August       | 22.42      | 24.78      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [September    | 20.05      | 23.65      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [October      | 20.00      | 20.50      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [November     | 21.66      | 23.79      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| [December     | 24.50      | 24.46      | N/A        | N/A          |
| ]{.smallcaps} |            |            |            |              |
+---------------+------------+------------+------------+--------------+
| **[Annual     | **20.41**  | **22.49**  | N/A        | N/A          |
| Avg.]{        |            |            |            |              |
| .smallcaps}** |            |            |            |              |
+---------------+------------+------------+------------+--------------+

[Source: National information market service, (SNIIM)]{.smallcaps}

[2006 Exchange Rate Avg.: U.S. \$1.00 = 10.90 pesos]{.smallcaps}

[2007 Exchange Rate Avg.: U.S. \$1.00 = 10.95 pesos]{.smallcaps}

[Exchange Rate January 2008: U.S. \$1.00 = 10.44 pesos]{.smallcaps}

## MEXICAN IMPORTS FOR SELECTED POULTRY PRODUCTS Jan-Oct 2007

## 

  ---------------------------------------------------------------------------------------
  **[H.S. Tariff          **[Description & Country of                 **[Volume
  Number]{.smallcaps}**   Origin]{.smallcaps}**                       MT]{.smallcaps}**
  ----------------------- ------------------------------------------- -------------------
  0105.11.01              Day old chicks, which do not need feeding   
                          during transport                            

                          U.S. & SUBTOTAL (Thousand head)             1,944

  0105.11.02              Breeding stock, layer-type with selected    
                          breed certificate when imports are no more  
                          of 15,000 heads in each operation           

                                                                      

                          U.S. & SUBTOTAL (Thousand head)             646

  0105.11.99              Other                                       

                          U.S. & SUBTOTAL                             112

  0105.19.99              Other (Chickens)                            

                          U.S. & SUBTOTAL (Thousand head)             4,750

  0207.11.01              Other fresh or chilled whole poultry        

                          U.S. & SUBTOTAL                             9,575

  0207.12.01              Other frozen whole poultry                  

                          U.S. & SUBTOTAL                             1,433

  0207.25.01              Whole frozen turkey                         

                          U.S.                                        5,946

                          CHILE                                       1,526

                          OTHER                                       0

                          SUBTOTAL                                    7,472

  0207.33.01              Whole ducks, geese & guineas frozen         

                          U.S. & SUBTOTAL                             829

  0207.26.01              Mechanically deboned turkey meat            

                          U.S. & SUBTOTAL                             8,239

  0207.26.99              Fresh & chilled turkey parts                

                          U.S. & SUBTOTAL                             96,372

  0207.13.01              Mechanically deboned chicken meat fresh or  
                          Chilled                                     

                          U.S. & SUBTOTAL                             101,953

  0207.14.01              Mechanically deboned chicken meat frozen    

                          U.S.                                        41,533

                          CHILE                                       2,613

                          SUBTOTAL                                    44,146

  0207.13.99              Fresh & chilled chicken parts               

                          U.S. & SUBTOTAL                             6,008

  0207.14.99              Frozen poultry parts                        

                          U.S.                                        11,973

                          OTHER                                       6,521

                          SUBTOTAL                                    18,494

  0207.13.03              Chicken Leg Quarter, Fresh/chilled          

                          U.S.                                        51,577

                          OTHER                                       254

                          SUBTOTAL                                    51,831

  0207.14.04              Chicken Leg Quarter, Frozen                 

                          U.S.                                        53,640

                          OTHER                                       223

                          SUBTOTAL                                    53,863

  0207.27.01              Mechanically deboned turkey meat, frozen    

                          U.S.                                        8,406

                          OTHER                                       1,424

                          SUBTOTAL                                    9,830

  0207.27.99              Frozen turkey parts                         

                          U.S.                                        30,263

                          OTHER                                       4,893

                          SUBTOTAL                                    35,156

  0207.36.99              Duck, geese or guineas cuts, frozen         

                          U.S. & SUBTOTAL                             54

  0207.14.02 & 0207.36.01 Poultry livers                              

                          U.S. & SUBTOTAL                             3

  0407.00.01              Table eggs, fresh, including hatching eggs  

                          U.S. & SUBTOTAL                             2,477

  1601.00.01              Sausages of broiler or turkey               

                          U.S.                                        16,264

                          OTHER                                       24

                          SUBTOTAL                                    16,288

  1602.31.01              Processed meat (Turkey)                     

                          U.S.                                        2,653

                          OTHER                                       230

                          SUBTOTAL                                    2,883

  1602.32.01              Prepared or preserved chicken meat or offal 

                          U.S.                                        8,149

                          OTHER                                       251

                          SUBTOTAL                                    8,400

  1602.39.99              Other processed poultry meat                

                          U.S.                                        14

                          FRANCE                                      15

                          OTHER                                       3

                          SUBTOTAL                                    32

  0207.13.02              Chicken carcasses                           

                          U.S. & SUBTOTAL                             16,420

  0207.14.03              Chicken carcasses                           

                          U.S. & SUBTOTAL                             84

  0207.26.02              Turkey carcasses                            

                          U.S. & SUBTOTAL                             0

  0207.27.03              Turkey carcasses                            

                          U.S. & SUBTOTAL                             0
  ---------------------------------------------------------------------------------------

[Source: Global Trade Information Services, Inc. "World Trade Atlas"
Mexico Edition, October 2007.]{.smallcaps}

#