Mexico

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EU-Mexico talks underway for agreement on organic trade

European Commission and Mexico to start negotiations on a bilateral agreement on trade in organic products

The European Commission and government of Mexico have started negotiations towards a bilateral agreement on trade in organic products.

A commission press release said both sides aim to “swiftly conclude” an agreement that would foster expansion of the market for organic farmers, reduce the burden for companies and supply more organic products for consumers.

Mexico’s Secretary of Agriculture José Calzada and EU Commissioner for Agriculture and Rural Development Phil Hogan met in Mexico City on February 10 to launch negotiations, “with a view to acknowledging the equivalence of each other’s organic legislation and control systems.” Hogan is visiting Mexico from 10 to 12 February 2016, accompanied by a delegation of 35 European businesses representing a wide range of the European Union’s agri-food sector.

According to the statement, organic farming is going through a period of expansion in Mexico. In 2014, the total area planted with organic crops amounted to 24.5 thousand ha, producing 104.4 thousand tons of organic products, valued at 1,062 million pesos. Tomatoes, coffee, strawberries and raspberries stand out as the leaders in value generation among organic crops.

In the EU, the organic sector has been rapidly developing in recent years, with a total area of 10.3 million ha cultivated as organic in 2014, up from 6.4 million ha in 2005. The EU market for organic products amounts to some 40% of the world market – second only to the US (43%).
 

 source: http://ec.europa.eu/agriculture/newsroom/259_en.htm

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Ongoing strong growth in Mexican avocado Industry

The world leader in avocado production, Michoacán accounts for 80% of Mexico’s avocado production but the state of Jalisco – Mexico’s second-largest producer with 6% of total Mexican production – is growing at a faster rate than other states.

Mexico’s Hass avocado production is forecast to come in at 1.6 million tons in marketing year (MY) 2015/16, up from the estimated 2014/15 total of 1.5 million, and 1.4 million tons in 2013/14. And exports will rise to about 750,000 tons in 2015/16 (July/June), predicts the USDA GAIN’s Mexico Avocado Annual Report.

Production

The USDA Post’s avocado production forecast for 2015/16 of 1.6 million tons is based on official estimates and reflects the fact that Michoacán has enjoyed good weather, though rainfall and hail in March “somewhat affected maturity levels of the fruit.”
“Sources indicate that the good implementation of phytosanitary pest control programs has helped boost production,” the report says.

Production growing fast in state of Jalisco

The world leader in avocado production, Michoacán accounts for 80% of Mexico’s avocado production but the state of Jalisco – Mexico’s second-largest producer with 6% of total Mexican production – is growing at a faster rate than other states.

Total area planted is forecast to rise 6.2% to 186,926 ha in 2015/16 “as growers in different states in Mexico are interested in increasing area due to good domestic and international demand for Mexican Hass avocados.”

Due to plant health concerns, Michoacán is currently the only state in Mexico authorised to export Hass avocados to the US.

Varieties

Due to its longer shelf life and demand for the variety in foreign markets, most Mexican states grow the Hass variety. Other varieties planted in Mexico at smaller scales are Fuerte, Criollo, Bacon, Pinkerton, Gwen, and Reed.

Export growth

Despite international prices being lower than expected in September/October 2015, exports were slightly higher compared to the same period in 2014/15. According to Global Trade Atlas (GTA), exports for 2014/15 are estimated at 736,421 tons; however, data from the Secretariat of Economy (SE) in Mexico estimate exports at 847,070 tons.

In general, exports have been increasing due to a good international demand and year-round market access to all 50 US states.

According to GTA, avocado exports to the US for 2014/15 were 584,252 tons (SE data indicates 693,342 tons, very close to the industry estimates), and for MY 2013/14 exports to the US were 436,578 tons (SE data indicates 516,084 tons).

The vast majority of the export business is managed directly by packers, many of whom have significant U.S. investments. Growers in Michoacán generally sell their fruit on the spot market to a packer in terms of pesos per kilo.

Industry representatives indicate that processed avocado (guacamole) exports are approximately 170,000 tons, and that these products are sold to the US, Europe, the Middle East, and Asia, GAIN says.

Export markets

The US is the top export market for Mexico, consuming 79% of total exports. Japan and Canada are strategic market niches where Japan has about 9% of the market and Canada about 6%. About 37 packers in Michoacán are eligible to export Mexican avocados to the US. Mexico has been exporting avocados to 21 countries; other top markets besides those listed above include Costa Rica, El Salvador, Honduras, and France. As Mexico has increased trade with China over the past few years, avocado exports to that country increased from 1,825 tons in 2013/14 to 7,869 tons in 2014/15.

New avocado niche: avocado oil for cosmetics

Fresh avocado exports continue to drive producer profitability despite the fact that new market niches are developing (for example, the extraction and export of avocado oil for the cosmetic industry). The cosmetic industry has not taken full advantage of this demand segment as there is a consumer perception that avocado byproducts are expensive. A small amount of avocado oil is also sold for food use.

source: GAIN Report Number: MX5050 Mexico Avocado Annual Report

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Report on the benefits of berry imports in US

Off-season berry purchases in the US are still small relative to in-season domestic production, indicating the potential for off-season supply has only been partially tapped.

What is the value to US consumers of the recent increase in the availability of fresh berries in winter? And how large would the consumer benefits be if these berries were available at in-season (spring) prices during the off-season (winter) in the United States?

These were questions examined in the report ‘Measuring the Impacts of Off-Season Berry Imports’ published last month by the USDA’s Economic Research Service.

“Findings suggest that additional supplies of these fruits from domestic off-season and foreign producers are especially valuable to consumers because they occur in winter months, when domestic fruit production is relatively low, consumers’ choices are fewer than during spring, and prices are high,” the report says.

“Findings also suggest that consumers would benefit from further reductions in seasonal production cycles. However, consumers receive larger benefits from making off-season berries available (having some berries rather than none) than from increasing supplies to the extent that off-season prices fall to in-season levels.”

The report says that the factor driving these consumer benefits is prices falling over the winter months—the difference between choke prices and market prices in the weeks in which Chile exports fruit. “On average, these declines range from 49% (blackberries) to 69% (strawberries).” (Chile exports strawberries, raspberries, blackberries, and blueberries during fall and winter. Mexico has also become a major supplier of berry crops to the US during winter but the study used Chile’s export season as a benchmark.)

The report says consumers would reap ever bigger ‘welfare’ gains should winter prices fall the level of spring ones, “which might occur if other countries began supplying the U.S. market or if there are advances in technology (either through improvements in domestic storage or shipping).”

Off-season berry purchases in the US are still small relative to in-season domestic production, indicating the potential for off-season supply has only been partially tapped. “Further advances in plant breeding or storage technology might make off-season supply quantitatively similar to in-season supply. Additionally, technological changes might reduce the cost of interhemispheric shipping, eliminating seasonality in the quantity of produce available.” the report also says.

Other interesting information in the report includes:

  • Per capita availability of fresh fruit is increasing in the US, rising from 106.50 pounds in 1980 to 131.04 pounds in 2012.
  • The berry share of fresh fruit availability increased 3.75 times (to 9.50 pounds by 2012).
  • Until the early 2000s, berries were unavailable to most U.S. consumers outside of their short domestic production seasons.
  • In 2012, fresh berries (strawberries, blueberries, raspberries, and blackberries) accounted for 16% of the retail spend on fresh fruit.
  • Highest monthly shipment numbers occur in June for blackberries, blueberries, and raspberries.
  • Shipments of strawberries are highest in May each year.
  • Retail strawberry prices in late December have been twice that of prices in May in recent years.

source: ‘Measuring the Impacts of Off-Season Berry Imports‘ by Carlos Arnade and Fred Kuchler, Economic Research Report No. (ERR-197) 35 pp, October 2015

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C.H. Robinson marks 25 years of business in Mexico

The strategic importance of being located in Mexico is underlined by C.H. Robinson’s celebration this month of a quarter of a century of business operations there.

The strategic importance of being located in Mexico is underlined by C.H. Robinson’s celebration this month of a quarter of a century of business operations there.

The company said in a press release that over the years, trade between the US and Mexico has become increasingly important. “Mexico continues to play a vital role across global supply chains due to the country’s business culture, educated workforce, and proximity to the United States,” it said in a press release.

A global provider of multimodal logistics services, fresh produce sourcing, and information services, C.H. Robinson also said its presence in Mexico “is bolstered by global freight forwarding and over a century of fresh produce expertise.”

Director of the Mexico region, Mike Burkhart, said customers rely on the company’s “experience and cultural knowledge, confidence, and unmatched expertise to accelerate their success in Mexico.”

“We look forward many more years of collaborating with our customers and deepening our value proposition in this growing region,” he said.

C.H. Robinson has more than 200 bilingual employees in 10 offices in Mexico and along the border between the US and Mexico. Founded in 1905, it now provides services to 46,000 customers globally through a network of more than 280 offices and has about 11,000 employees worldwide, working with 66,000 transportation providers. Its revenue last year was $13.5 billion.

 

Mexico map with flag image by Jaimiko (public domain), via Wikimedia Commons

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Mexico expects stronger avocado exports in 2014/2015

640px-Hass_avocado_-white_background

 

Modest growth will bring Mexico’s Hass avocado production to 1.5 million tons for the 2014/2015 marketing year (MY), according to the USDA’s Foreign Agricultural Service (FAS).

Growers estimate the country’s avocado exports will also increase, to about 700,000 tons, though this could end up being higher as world prices are expected to be lower, FAS said in its recent Mexico Avocado Annual report.

Mexico exports avocados to 21 countries but its top markets are the US (accounting for the vast majority), Japan, Canada, Costa Rica, El Salvador, Honduras, and France.

 

 

Michoacán grows most of Mexico’s ‘green gold’

The state of Michoacán, in western Mexico, is the world leader in avocado production, growing 85% of Mexico’s avocado crop. Most avocado production in this avocado belt takes place in small orchards of just 5–10ha.

The vast majority of the export business is managed directly by packers, many of whom have significant US investment. Growers in Michoacán generally sell their fruit on the spot market to a packer in terms of pesos/kg.

Overall yields in Mexico for MY 2014/15 are forecast between 8.9–9.1 MT/ha but yields  of 15–20 MT/ha are expected in the state of Jalisco, which is

planting at higher tree densities and using advanced management technologies.

Due to plant health concerns, Michoacán is currently the only state in Mexico authorized to export Hass avocados to the US. USDA /APHIS registration of authorized pest-free municipalities is required for producers to export to the US.

 

State of Michoacán within Mexico

 

 

Attractive prices for consumers in 2014/15

Export prices were higher than expected in 2014/15. In March 2014, two-layer cartons of Hass 48s from Mexico were reported at prices of $36.25-38.25, up from $31.25-32.25 at the same time in 2013. Prices were higher because California could not supply avocados at the time, and Mexico had some shipping issues.

“Prices for MY 2014/15 began at lower levels and are expected to remain attractive for consumers as the domestic crop is expected to be good,” FAS said.

 

 

 

Click here to read the Mexico Avocado Annual report by FAS

Click here to see photo source
Click here to see source of map showing Michoacán

 

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Far East focus for Mexico berries

For Mexican soft fruit association Aneberries, 2014 has become a crucially important year in its development as the group seeks to gain access to China

For a great many companies in the fresh produce sector, China has assumed something of the allure of a Holy Grail of export destinations, with a potential market of 1.35 billion people an enticing prospect for any producer, even excepting the huge distances often involved. This is no less the case for Mexico’s soft fruit growers, where national association Aneberries – whose members account for around 75% of total berry annual export volumes – has for some time been actively seeking entry to the Chinese market. The only problem is the lack of an export protocol for soft fruit between the Latin American nation and China, meaning that – as is the case with many other sectors – exports can only be achieved through Hong Kong, in other words, not officially. However, all that could be about to change with the visit of inspectors from China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) to Mexico’s berry production heartland in the states of Jalisco and Michoacán. During the visit, which took place between 24 February and 3 March, AQSIQ officials toured a total of nine berry production sites and three packhouses, with a particular focus on blackberries and raspberries. In a hugely heartening statement for the Mexican berry sector through Mexico’s department of agriculture (Sagarpa), AQSIQ Safety Division official Feng Chunguang said that a phytosanitary agreement for exports of both products could realistically be completed before the end of 2014. If this is achieved, Mexico also hopes to achieve access for blueberries in 2015. If all goes to plan, the expectation is that Mexican president Peña Nieto will sign an agreement to enable access for blackberries to China during a scheduled visit to the country in October, explains Aneberries president Mario Andrade.
SM