Monthly Mexico Meat Market Report

Transcription

1 Monthly Mexico Meat Market Report Supply and Price Situation for Domestic and Traded Beef June 21, 2018 Prepared for Meat and Livestock Australia Steiner Consul ng Group, Manchester, NH, U.S.A

2 table of contents market update trade summary - total mexico beef imports beef imports from australia total mexico beef exports mexican beef trade deficit imports of mexican feeder cattle 15 mexican economy - exchange rates economic indicators inflation.. 20 pricing summary - feeder steer prices - export to u.s mexican beef trim and cut prices supply summary - beef supply, exports and use cattle inventory.. 32

3 Page 3 Monthly update NAFTA nego a ons have been put on the backburner un l the summer, according to Chrys a Freeland, Canadian Foreign Affairs Minister a er speaking with Robert Lighthizer, US Trade Representa ve. However, given the recent escala on in the US and China trade war, it seems NAFTA nego a ons are far from reaching a gradual conclusion. According to a recent Reuters ar cle, Mexican authori es are contempla ng tariffs on US grains as a countermeasure to any new US tariffs. This would significantly impact the Mexican livestock industry, possibly taking some of the steam out of Mexican beef produc on which has been steadily increasing for the past three years. Mexican authori es are already in talks with Brazil and Argen na for alterna ve sources of grains. Mexican beef exports in April were up roughly 5% compared to the same me last year. Exports to Asia were up, with South Korea, Japan and Hong Kong buying 375%, 40% and 72% more beef than the same me last year. Exports to the US were flat, sugges ng hesitancy in expanding beef trade at the moment. Share of Mexico Beef Imports NAFTA members + Australia, April 2018 Australia 0% Japan 7% Canada 9% Other 9% USA 82% Share of Mexico Beef Exports USA, Japan and South Korea, April 2018 South Korea 3% Other 8% Beef Imports were higher in April, climbing 11% over the same me last year. Beef imports from Commonwealth countries was mixed, with Canadian beef down 6%, Australian beef down 25% and New Zealand beef (all frozen cuts) up 133% over the same me last year. A empts to expand South American beef trade have so far brought li le results, with Nicaragua shipping 3,901 MT, 26% higher than last year. Uruguay is down 87%. Mexico Beef Production Source: SAGARPA 180,000 Mexican beef produc on con nues to chug along at an 175,000 average of 2.7% higher than last year. In May, 2018, 170,000 Mexico produced nearly 160,000 MT of beef, compared 165,000 to 150,000 MT in 2014, represen ng a 6% increase over 4 160,000 years. However, with US grains firmly in the crosshairs of Mexican authori es, this consistent increase in Mexican 155,000 beef may finally reach its end. 150,000 USA 82% NAFTA setback has nega vely impacted the peso. The result has been a surge in Mexico shipments of feeder ca le to the US during May and early June. 145, , Year Average Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Prepared by: Steiner Consulting Group

4 June 2018 Mexico Monthly Meat Market Report Page 4 Trade Summary

5 Page YTD 2018 YTD Jan - Apr Jan - Apr Vol. Ch. % Ch. Apr-17 Apr-18 Vol. Ch. % Ch. Fresh/Chill MT MT MT MT MT MT MT MT MT United States 118,963 95,607 99,150 30,389 35,247 4,857 16% 7,697 10,526 2,829 37% Canada 18,360 14,891 13,526 4,360 3,993 (367) -8% 1,254 1,044 (210) -17% Australia % (0) 0% New Zealand N/A N/A Honduras N/A N/A Costa Rica N/A N/A Uruguay (132) -87% 42 9 (33) -79% Chile N/A N/A Nicaragua 172 4,093 6,657 2,962 3, % 715 1, % Panama N/A N/A Other % % Total 137, , ,660 37,885 42,946 5,061 13% 9,730 12,693 2,963 30% Frozen United States 4,569 5,089 10,151 3,255 2,355 (900) -28% (305) -42% Canada % % Australia 1, (94) -52% (55) -75% New Zealand % % Honduras N/A N/A Costa Rica N/A N/A Uruguay N/A N/A Chile N/A N/A Nicaragua % % Panama N/A N/A Other (0) -44% 0 0 (0) -100% Total 6,803 7,839 11,751 3,762 3,129 (633) -17% (278) -30% Fresh/Chilled & Frozen Mexico Beef Imports Shipped Wt. Basis (Metric Ton), Annual and Monthly United States 123, , ,301 33,644 37,602 3,958 12% 8,417 10,941 2,524 30% Canada 18,668 15,452 14,161 4,485 4,229 (256) -6% 1,272 1,120 (152) -12% Australia 1, (51) -25% (55) -58% New Zealand % % Honduras N/A N/A Costa Rica N/A N/A Uruguay (132) -87% 42 9 (33) -79% Chile N/A N/A Nicaragua 304 5,040 7,115 3,092 3, % 775 1, % Panama N/A N/A Other % % Total 144, , ,411 41,647 46,075 4,428 11% 10,649 13,335 2,686 25%

6 June 2018 Mexico Monthly Meat Market Report Page 6 MT 30,000 Mexico Beef Imports from US and Canada Shipped Wt. Basis (MT), Monthly 2001 to ,000 20,000 15,000 USA 10,000 5,000 Canada

7 Page 7 MT, swt 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 Mexican Fresh, Chilled & Frozen Beef Imports Year-to-Date 2018 vs % 2017 YTD 2018 YTD 11% 5, % -25% 133% United States Canada Australia New Zealand Total 100% 90% 80% 70% 60% Mexican Beef Imports by Country Share of Total Imports (% as February 2018) Canada Canada 9.4% Australia 0.3% Other 7.8% 50% 40% 30% United States United States 82.5% 20% 10% 0% Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

8 Page 8 Share of Mexican Beef Imports 2017 vs. 2018, Year-to-Date Fresh/Chilled Imports YTD, 2017 Fresh/Chilled Imports YTD, 2018 United States 80% 37,885 MT Canada 12% Nicaragua 8% United States 82% 42,946 MT Canada 9% Nicaragua 9% Frozen Imports YTD, 2017 Frozen Imports YTD, 2018 United States 87% 3,762 MT Nicaragua 3% Other shares of frozen includes Chile and Nicaragua makes up 3.5% Canada 3% Fresh vs Frozen Beef Imports, 2017 YTD New Zealand 2% United States 75% 3,129 MT Other shares of frozen include Australia and Chile and makes up 2.8% Canada 8% New Zealand 5% Nicaragua 9% Fresh vs Frozen Beef Imports, 2018 YTD Fresh/Chill 91.0% 41,647 MT Frozen 9.0% Fresh/Chill 93.2% 46,075 MT Frozen 6.8%

9 Page 9 MT, swt 160 Australian Beef Exports to Mexico Metric Tons, Shipped Weight Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Average Year Avg 2018 vs vs 5 Yr Avg Ja n N/A 83% Feb Ma r % 236% Apr N/A 13% Ma y % 80% Jun Jul Aug Sep Oct Nov Dec

10 Page YTD 2018 YTD Jan - Apr Jan - Apr Vol. Ch. % Ch. Apr-17 Apr-18 Vol. Ch. % Ch. Fresh/Chill MT MT MT MT MT MT MT MT MT United States 106, , ,018 53,383 53,327 (56) 0% 11,780 10,701 (1,079) -9% Japan 2,918 2,767 2, % % South Korea N/A N/A Puerto Rico N/A N/A Costa Rica N/A N/A Panama N/A N/A Angola N/A N/A Russia N/A N/A Hong Kong N/A N/A Vietnam N/A N/A Other , , % % Total 110, , ,746 54,459 55, % 11,979 11,278 (701) -6% Frozen United States 8,066 12,080 14,611 5,028 4,833 (195) -4% 1,114 1, % Japan 9,896 7,451 5,086 2,031 2, % % South Korea , ,351 1, % % Puerto Rico N/A N/A Costa Rica N/A N/A Panama % N/A Angola N/A N/A Russia N/A N/A Hong Kong 7,344 3,711 3,513 1,429 2,456 1,027 72% % Vietnam N/A N/A Other (312) -63% (58) -74% Total 26,986 24,361 26,243 9,305 11,650 2,345 25% 2,312 3,463 1,150 50% Fresh/Chilled & Frozen Mexico Beef Exports Shipped Wt. Basis (Metric Ton), Annual and Monthly United States 114, , ,629 58,412 58,160 (252) 0% 12,894 12,097 (797) -6% Japan 12,814 10,218 7,396 2,642 3,642 1,000 38% 771 1, % South Korea , ,351 1, % % Puerto Rico N/A N/A Costa Rica N/A N/A Panama % N/A Angola N/A N/A Russia N/A N/A Hong Kong 7,344 3,727 3,513 1,429 2,456 1,027 72% % Vietnam N/A N/A Other 1,108 1,210 2, , % % Total 137, , ,989 63,764 66,945 3,180 5% 14,292 14, %

11 Page 11 MT, swt 80,000 70,000 60,000 0% Mexican Fresh, Chilled & Frozen Beef Exports Year-to-Date, 2018 vs YTD 2018 YTD 5% 50,000 40,000 30,000 20,000 10,000-38% 373% N/A United States Japan South Korea Russia Total 100% 90% 80% Mexican Beef Exports by Country Share of Total Imports (% as February 2018 Other South Korea Russia S. Korea 2.1% Other 4.2% Japan 5.0% 70% 60% 50% Japan United States 88.8% 40% 30% United States 20% 10% 0% /1/2000 /1/2000 /1/2001 /1/2001 /1/2002 /1/2002 /1/2003 /1/2003 /1/2004 /1/2004 /1/2005 /1/2005 /1/2006 /1/2006 /1/2007 /1/2007 /1/2008 /1/2008 /1/2009 /1/2009 /1/2010 /1/2010 /1/2011 /1/2011 /1/2012 /1/2012 /1/2013 /1/2013 /1/2014 /1/2014 /1/2015 /1/2015 /1/2016 /1/2016 /1/2017 /1/2017 /1/2018

12 Page 12 Shares of Mexican Beef Exports 2017 vs. 2018, Year-to-Date Fresh/Chilled Exports YTD, 2017 Fresh/Chilled Exports YTD, 2018 United States 98% 54,459 MT United States 96% 55,295 MT Japan 2% Frozen Exports YTD, 2017 Japan 22% Japan 1% Other 2% Frozen Exports YTD, 2018 Japan 24% South Korea 12% United States 54% United States 9,305 MT Other Hong Kong 15% United States 41% 11,650 MT Hong Kong 21% Other shares of frozen includes Panama, South Korea, and Vietnam and makes up 8.8% Fresh vs Frozen Beef Exports, 2017 YTD Fresh/Chill 85% Other shares of frozen include Costa Rica, Panama and other and make up 2.2% Fresh vs Frozen Beef Exports, 2018 YTD Fresh/Chill 83% Frozen 15% 63,764 MT Frozen 17% 66,945 MT

13 Page 13 MT 10,000 Mexico Beef Trade Deficit/Surplus with the US Net Beef Trade, Exports minus Imports (MT) 5,000 - (5,000) (10,000) (15,000) (20,000) (25,000) (30,000) Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

14 Page 14 Imports Of Mexican Feeder Cattle As % Of US Cattle Placements US Monthly Imports, USDA Male Calves Female Calves Total Feeders...head.. US 5-State Placements Placements head.. Total Feeders as % US Total Placements Total Feeders as % 5-State Placements Jan-15 65,541 13,765 79,306 1, % 16% Feb-15 88,922 13, ,611 1, % 26% Mar ,368 15, ,482 1, % 22% Apr-15 82,353 11,856 94,209 1, % 19% May-15 95,388 13, ,075 1, % 18% Jun-15 93,814 12, ,479 1, % 22% Jul-15 81,528 9,368 90,896 1, % 19% Aug-15 60,653 6,670 67,323 1, % 14% Sep-15 73,111 6,038 79,149 1, % 14% Oct-15 91,742 12, ,160 2, % 18% Nov-15 82,519 11,841 94,360 1, % 22% Dec-15 93,412 8, ,027 1, % 24% Jan-16 48,256 4,225 52,481 1, % 11% Feb-16 77,032 6,592 83,624 1, % 17% Mar ,486 15, ,520 1, % 24% Apr ,279 12, ,437 1, % 20% May-16 57,200 4,724 61,924 1, % 9% Jun-16 56,736 4,288 61,024 1, % 12% Jul-16 37,400 4,255 41,655 1, % 9% Aug-16 42,237 3,225 45,462 1, % 9% Sep-16 39,260 3,854 43,114 1, % 9% Oct-16 48,678 3,456 52,134 2, % 9% Nov-16 99,722 13, ,952 1, % 22% Dec ,091 12, ,602 1, % 26% Jan-17 75,095 11,900 86,995 1, % 18% Feb ,700 16, ,042 1, % 27% Mar ,436 22, ,415 2, % 22% Apr-17 79,178 13,500 92,678 1, % 15% May-17 90,654 12, ,596 2, % 13% Jun-17 61,417 15,326 76,743 1, % 13% Jul-17 59,588 11,955 71,543 1, % 15% Aug-17 37,962 7,175 45,137 1, % 9% Sep-17 39,818 6,084 45,902 2, % 8% Oct-17 70,516 13,041 83,557 2, % 13% Nov ,343 34, ,044 2, % 23% Dec ,844 27, ,264 1, % 27% Jan-18 61,667 9,703 71,370 1, % 13% Feb-18 92,477 18, ,537 1, % 22% Mar ,588 22, ,157 1, % 20% Apr-18 86,635 17, ,656 1, % 20% May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec states: California, Arizona, New Mexico, Texas and Oklahoma

15 Page 15 Imports Of Mexican Feeder Cattle As % of Southern Placements as % of Placements in 5 States (CA, AZ, NM, TX and OK) 40% 35% 30% 25% 20% 15% 10% 5% 0% as % of All US Placements 14% 12% 10% 8% 6% 4% 2% 0%

16 June 2018 Mexico Monthly Meat Market Report Page 16 Mexican Economy

17 Page % 1.50% 1.00% 0.50% 0.00% -0.50% -1.00% -1.50% -2.00% -2.50% -3.00% -3.50% Appreciation/Depreciation of Mexican Peso vs. US $ and Canadian $, % Ch Since Jan 2, 2009 MXN vs. CAD MXN vs. USD More imports Fewer exports Fewer imports More exports USD per 1 MXN US Dollar to 1 Mexican Peso 0.03 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 CND per 1 MXN 0.10 Canadian Dollar to 1 Mexican Peso NZD per 1 MXN 0.11 New Zealand Dollar to 1 Mexican Peso Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 AUD per 1 MXN 0.12 Australian Dollar to 1 Mexican Peso RUB per 1 MXN 5.00 Russian Ruble to 1 Mexican Peso Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 KRW per 1 MXN 110 South Korean Won to 1 Mexican Peso JPY per 1 MXN 10 Japanese Yen to 1 Mexican Peso Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 5 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

18 Page Real GDP, Annual Growth Annual % Ch Inflation, general Annual % Ch Inflation, food Annual % Ch Exchange Rate MXN per USD Unemployment Rate % Interest Rate, target % Consumer Confidence Index = Industrial Production Annual % Ch Sources: IMF, Bank of Mexico, OECD, Moody's/Economy.com 1. Moody's/Economy.com forecasts, latest update 8/17/2017 Economic Indicators: Mexico % Ch GDP Growth: Annual % Change Mexico, U.S. and Canada Comparison Fcst Mexico U.S. Canada

19 Page 19 Y/Y % Ch 12.0% Inflation in Mexico: CPI 2017, 2016 and 5 Yr Avg 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Yr Avg ( ) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Nov % Nov % 5-Yr Avg 3.50% Y/Y % Ch 12.0% Inflation in Mexico: Food CPI 2016, 2015 and 5 Yr Avg 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Yr Avg ( ) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Nov % Nov % 5-Yr Avg 5.37% Source: INEGI

20 Page Base 2011 Avg. = 100 Mexico Price Inflation in Main Protein Groups Reindexed with 2011 Avg. = 100 Beef Chicken Pork Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct Mexico Consumer Price Inflation - All Meat Products Source: INEGI Y/Y % Ch 15% Mexico Consumer Price Inflation - Beef Source: INEGI Y/Y % Ch 15% 10% 10% 5% 5% 0% 0% -5% -5% -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg. ( ) -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg ( ) Mexico Consumer Price Inflation - Pork Source: INEGI Y/Y % Ch 15% Mexico Consumer Price Inflation - Chicken Source: INEGI Y/Y % Ch 15% 10% 10% 5% 5% 0% 0% -5% -5% -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg ( ) Source: INEGI -10% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Avg ( )

21 June 2018 Mexico Monthly Meat Market Report Page 21 Pricing Summary

22 Page Feeder Steer Feeder Heifers lbs y/y% ch lbs y/y% ch lbs y/y% ch lbs y/y% ch US$/cwt US$/cwt US$/cwt US$/cwt Jan % % % % Feb % % % % Mar % % % % Apr % % % % May % % % % Jun % % % % Jul % % % % Aug % % % % Sep % % % % Oct % % % % Nov % % % % Dec % % % % % % % % Jan % % % % Feb % % % % Mar % % % % Apr % % % % May % % % % Jun % % % % Jul % % % % Aug % % % % Sep % % % % Oct % % % % Nov % % % % Dec % % % % % % % % Jan % % % % Feb % % % % Mar % % % % Apr % % % % May % % % % Jun % % % % Jul % % % % Aug % % % % Sep % % % % Oct % % % % Nov % % % % Dec % % % % % % % % Jan % % % % Feb % % % % Mar % % % % Apr % % % % May % % % % Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec YTD *Price uses Medium and Large 1& 2 Feeder Steers and Fed Heifers; shipments to New Mexico and Texas Feeder Steer ( lbs) Prices: Shipments from Mexico to US US$/cwt Average Price of Mexican Feeder Cattle Imported in the US Source: USDA Agricultural Marketing Service

23 Page 23 Mexican Beef Trim Prices vs. US Domestic and Imported Prices 80% Trim 90% Trim..Mexico....US..Mexico....US MX (Pesos/kg) US$/l Imported Imported USDA 1 MX (Pesos/kg) US$/lb USDA 1 b (YS) 2 (YS) 2 low high avg. Conv. US$/lb US$/lb low high avg. Conv. US$/lb US$/lb 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Urner Barry % Boneless Beef, National Fresh; 2. YS Imported Aust/NZ Mixed Trimmings 80%, EC 7:45; 3. 90% Boneless Beef, National, Fresh; 4. YS Imported Aust/NZ Blend Cow 90% EC 7:45

24 Page 24 Mexican Beef Prices vs. US Market Prices Beef Carcass (100, 1) Bnls Ribeye, Lip-On (112A, 3) Shoulder Clod (114, 1)...Mexico.. US...Mexico.. US...Mexico.. US MX (Pesos/kg) US$/lb USDA 1 MX (Pesos/kg) US$/lb USDA 2 MX (Pesos/kg) US$/lb USDA 3 low high avg. Conv. US$/lb low high avg. Conv. US$/lb low high avg. Conv. US$/lb 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Urner Barry. 1. Five Area Direct Average Dressed Steer; 2. Boner/Breaker 112A Rib, ribeye roll-lip-on, 8-dn lbs; 3. Choice Chuck Shoulder Clod

25 Page 25 Mexican Beef Prices vs. US Market Prices Chuck Roll, Neck Off (116A, 3) Chuck Tender (116B, 1) Chuck Short Rib (130, 1)...Mexico.. US...Mexico.. US...Mexico.. US MX (Pesos/kg) US$/lb USDA 1 MX (Pesos/kg) US$/lb USDA 2 MX (Pesos/kg) US$/lb USDA low high avg. Conv. US$/lb low high avg. Conv. US$/lb low high avg. Conv. US$/lb 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Urner Barry. 1. Choice 116A 3 Chuck Roll 1x1 neck/off; 2. Choice 116B 1 Chuck Chuck tender

26 Page 26 Mexican Beef Prices vs. US Market Prices Knuckle, Pld (167A, 4) Top Round, Cap Off (169A, 3) Outside Round (171B, 3)...Mexico.. US...Mexico.. US...Mexico.. US MX (Pesos/kg) US$/lb USDA 1 MX (Pesos/kg) US$/lb YS 2 MX (Pesos/kg) US$/lb USDA 3 low high avg. Conv. US$/lb low high avg. Conv. US$/lb low high avg. Conv. US$/lb 2016 Jan #N/A - #N/A #N/A #N/A 3.00 Feb ##### - ##### ##### ##### 2.85 Mar ##### - ##### ##### ##### 2.84 Apr ##### - ##### ##### ##### 2.57 May ##### - ##### ##### ##### 2.62 Jun ##### - ##### ##### ##### 2.81 Jul ##### - ##### ##### ##### 2.73 Aug ##### - ##### ##### ##### 2.69 Sep ##### - ##### ##### ##### 2.56 Oct ##### - ##### ##### ##### 2.36 Nov ##### - ##### ##### ##### 2.27 Dec ##### - ##### ##### ##### Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Urner Barry. 1. Choice 167A 4 Round Knuckle Peeled; 2. YS 169A 5 Inside Round, Cap-Off Choice-(TL); 3. Choice 171B 3 Round outside round

27 Page 27 Mexican Beef Prices vs. US Market Prices Eye of Round (171C, 3) Tenderloin, Full, Defatted (189A, 4)...Mexico.. US...Mexico.. US MX (Pesos/kg) US$/lb USDA 1 MX (Pesos/kg) US$/lb YS 2 low high avg. Conv. US$/lb low high avg. Conv. US$/lb 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Urner Barry. 1. Choice 171C 3 Round eye of round; 2. YS 189A 4 Loin, Tenderloin, PSMO, Defat Dn No-Roll-(LTL)

28 June 2018 Mexico Monthly Meat Market Report Page 28 Supply Summary

29 Page MT, Carcass Wt. Eq. 2,500 Mexico: Beef Supply, Exports and Domestic Use Exports 2,000 1,500 1,000 Total Domestic Consumption Total Supply Imports (f) - USDA forecast 1000 MT, Carcass Wt. Eq. 350 Mexico: Beef Exports

30 Page Yr Avg 2017 vs vs. 5 Yr Avg Jan 145, , , , , , ,188 2% 4% Feb 144, , , , , , ,450 4% 5% Mar 142, , , , , , ,490 3% 4% Apr 142, , , , , , ,367 2% 5% May 147, , , , , ,654 2% 3% Jun 151, , , , , ,023 2% 4% Jul 154, , , , , ,028 2% 6% Aug 153, , , , , ,326 3% 5% Sep 152, , , , , ,041 4% 6% Oct 155, , , , , ,851 1% 5% Nov 159, , , , , ,583 3% 5% Dec 159, , , , , ,975 2% 6% Year 1,808,284 1,827,322 1,850,133 1,879,318 1,925,364 1,836,977 Source: SAGARPA Carcass (MT) 190, , , , , , , , , ,000 Domestic Mexican Beef Supply Monthly Volume, Carcass (MT) Domestic Mexican Beef Supply Monthly Volume (MT), 2003 to 2017

31 Page 31 Dairy Cow Inv. Beef Cow Inv. Calf Crop Total Cattle Inventory Cow Slaughter Calf Slaughter Total Cattle Slaughter Total Exports....Thousand Head ,370 9,340 7,360 29,900 1,435 1,035 5, ,460 9,470 7,490 30,410 1, , ,536 9,747 7,725 31,300 1,093 1,393 5, ,597 10,016 7,930 32,150 1,156 1,473 5, ,627 10,615 8,315 33,000 1,240 1,580 6, ,340 11,113 8,400 34,000 1,330 1,695 6, ,341 11,364 8,550 34,700 1,445 1,075 6, ,272 10,920 8,233 33,873 1,984 1,088 6, ,783 11,120 8,023 33,917 1,400 1,760 6, ,643 11,235 7,885 33,853 1,575 2,055 7, ,933 11,696 9,036 32,167 1,356 1,579 5,755 1, ,116 11,979 9,514 33,603 1,378 1,605 5,837 1, ,276 12,808 9,773 35,378 1,714 1,915 8, ,050 12,720 9,569 34,999 2,802 1,930 10, ,070 11,860 9,018 31,747 1,750 1,900 8,720 1, ,090 12,210 9,450 29,847 1,610 1,720 7,450 1, ,150 12,500 6,573 31,822 1,620 1,700 5, ,250 12,850 7,000 31,158 1,620 1,700 6,074 1, ,200 13,000 7,500 30,341 1,630 1,730 6,174 1, ,000 12,000 8,300 30,151 1,750 1,700 6,928 1, ,000 11,500 6,775 29,637 1,630 1,650 6, ,000 11,000 7,400 28,601 1,700 1,700 6, ,200 11,200 7,240 29,051 1,600 1,600 6, ,200 10,700 8,400 25,425 1, ,975 1, ,200 10,800 8,460 25,220 1, ,925 1, ,350 10,800 8,600 25,328 1, ,075 1, ,450 10,000 8,200 25,349 1, , ,550 9,500 8,000 26,011 1, ,025 1, ,650 9,000 7,800 25,199 1, ,775 1, ,750 8,000 7,275 24,309 1, ,150 1, ,850 7,000 6,925 23,669 1, ,475 1, ,966 6,711 6,732 23,316 1, ,690 1, ,060 6,810 6,754 22,850 1, , ,157 6,909 6,875 22,666 1, , ,175 6,960 7,000 22,192 1, ,050 1, ,185 7,000 6,900 21,456 1, ,347 1, ,200 6,900 6,800 20,090 1, ,375 1, ,200 6,750 6,700 18,521 1, ,200 1, ,215 6,700 6,750 17,760 1, ,000 1, ,250 6,700 6,850 17,120 1, ,975 1, ,275 6,800 7,100 16,615 1, ,955 1, F 3,350 7,300 7,425 16,490 1, ,010 1, F 3,400 7,500 7,580 16,585 1, ,110 1,225 Source: USDA Source: USDA Mexican Cattle Inventory, Slaughter and Exports

32 Page 32 Thous. Head Total Mexican Cattle Inventory 40,000 35,000 30,000 25,000 20, ,585 15, ,490 10,000 Thous. Head 16,000 14,000 Mexican Beef Cow Inventory and Calf Crop Beef Cow Inv. Calf Crop 12,000 10,000 8,000 6,000 4,000 2,000 - Source: USDA