Mexico is the third-largest market for U.S. farm exports, so the declining value of the peso “could create a drag on U.S. animal product exports in 2017,” says USDA’s monthly Livestock, Dairy and Poultry Outlook. The southern neighbor of the United States is the largest market for exports of U.S. pork, poultry, and dairy products, says USDA, as well as the No. 3 market for U.S. beef.
“Lower U.S. prices from larger product supplies could, however, offset some of the negative exchange rate effects as the year unfolds,” said the report. “Prices of livestock and poultry are expected to be lower in 2017, compared with last year.” Hog prices are forecast down 15 percent, cattle down 10 percent, turkeys down 7 percent and broiler chickens down 2 percent.
Based on a large pig crop last fall, U.S. pork production is forecast at 26.2 billion pounds this year, up 5 percent from 2016. Mexico was the destination for one-third of the record 510 million pounds of U.S. pork exports last November, the most recent month for which data are available. The peso lost 6 percent of its value during the month, “providing potential evidence that low prices can offset some of the negative effects from exchange rate dynamics to support exports,” said USDA.