Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 8/18/10

Mexico’s announcement earlier this week that it plans to add pork to a list of U.S. products on which it will impose tariffs in retaliation for a cross-border trucking dispute sent shock waves through the pork industry, but some analysts are expecting only a moderate impact.

“The tariff is likely to be moderate, largely representing a symbolic move,” wrote Stephens Inc. analyst Farha Aslam in a note to investors.

Livestock analysts Steve Meyer and Len Steiner agreed. “The magnitude of the tariff is such that it will probably have only a marginal effect on U.S. pork shipments to that market,” they wrote in the CME’s Daily Livestock Report.

Mexico has set the tariff on pork products at 5 percent, according to Reuters, citing an updated list of U.S. products subject to tariffs in Mexico's official gazette.  

What is more important for U.S. pork exports to Mexico is the general outlook for the Mexican economy, according to the DLR, which noted concerns about drug wars and social instability that already are having a negative effect on the tourism and related industries.

According to Aslam, Mexico is the second-largest pork export market outside of Japan so far this year, purchasing 23 percent of total U.S. export volume, or 4.6 percent of U.S. pork production. The United States accounts for approximately 92 percent of Mexico’s total pork imports.

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