Mexican pig farming at a crossroads

The Mexican pig industry is at a crossroads. The industry's transformation from a low-tech, fragmented manufacturing sector to a globally competitive pork supplier in just a few decades is commendable. However, in order to meet future market expectations and ensure stable financial results, the sector must continue the process of modernization.

According to Rabobank, the industry has two main options for development. With additional investment, the industry has the opportunity to stabilize production and generate more predictable financial returns if the sector continues to:

accelerate investment in biosecurity and in the skills and capabilities of workers,

consolidate weaker players and move towards further vertical integration, and

increase the cost of carcasses by selling more expensive goods, semi-finished products and increasing exports.

Alternatively, if the appetite for further investment is exhausted, the industry could put its upgrade path on hold, exposing itself to volatility associated with herd health issues and lower margins associated with unstable pork quality.