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Antidumping duties would raise chicken prices 22.4% in Mexico, study finds
Story Date: 5/16/2012
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Source: Michael Fielding, MEATINGPLACE, 5/15/12
Retail chicken prices in Mexico will rise by 22.4 percent, the meat Consumer Price Index (CPI) will jump 7.2 percent and the food CPI by 1.9 percent, should the Mexican government implement duties on U.S. chicken leg quarter imports, according to a study released Monday that assessed the likely impact of the duties on prices and inflation levels in Mexico.
Early in 2011, three Mexican poultry companies petitioned the Mexican government to begin an antidumping investigation of imports of chicken leg quarters from the United States, alleging that U.S. companies were exporting leg quarters to Mexico at below-market prices. The Mexican ministry announced its preliminary results with proposed duties on U.S. poultry ranging from 64 percent to 129 percent.
Mexico is the largest customer of U.S. poultry exports. Conducted by Dermot Hayes, professor of economics and finance at Iowa State University, the study examined what implementation of the duties would mean for Mexican consumers.
Results from the study indicate that in the short term, on an annualized basis, the duties will eliminate 250,000 metric tons of chicken leg quarters from the market and replace them with 79,000 tons of imported whole chicken. Domestic consumption will fall by 163,000 tons, in part because chicken prices will rise by 22.4 percent.
“The sudden disappearance of 250,000 tons of leg quarters will cause national poultry prices to increase,” Hayes said in a news release. “In the immediate aftermath of the duties, it will not be possible for the Mexican poultry industry to increase production. This means that the market will be brought back into balance by reduced consumption and by increased whole bird imports.”
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