Sanitary Concerns Restrict U.S.-Mexico Poultry Trade

As more and more countries reduce or eliminate tariffs, cross-border trade generally increases, but other factors can still affect the flow of goods. In the livestock and meat industry, for example, trade can be influenced by differences in animal health and sanitary regulations. The recent elimination of poultry tariffs between the U.S. and Mexico through the North American Free Trade Agreement highlights the potential impact of such differences.

In many ways, the two countries are ideal trading partners in poultry, and each stands to benefit from the relationship. They share a border, Mexico has a rising middle class, and Mexican and American poultry tastes are complementary—Mexican consumers generally prefer dark meat, while American consumers prefer white meat. Price differences for dark and white meat between Mexico and the U.S. could result in profitable trade for both countries.

Both countries are concerned, however, about the spread of contagious diseases, such as Exotic Newcastle disease (END), and have established sanitary regulations to minimize the risk of transmission of such diseases. In the U.S., two USDA agencies—the Animal and Plant Health Inspection Service (APHIS) and the Food Safety and Inspection Service (FSIS)—establish and administer sanitary standards that other countries must meet in order to export to the U.S. The standards for cooked meat differ from those for fresh, chilled, and frozen meat. Mexico already ships cooked poultry meat to the U.S. In addition, two Mexican states are recognized as low-risk areas of END transmission by APHIS but cannot export fresh, chilled, or frozen poultry meat until FSIS certifies the poultry slaughter inspection system as 'equivalent' to the U.S. system for all of Mexico. Other Mexican states are also currently working to meet APHIS requirements.

If Mexico is able to expand exports of fresh, chilled, and frozen poultry, the U.S.-Mexico poultry market could change. The total value of chickens in Mexico would increase due to higher white meat prices in the U.S. relative to Mexico. Because the U.S. is a much larger overall poultry producer than Mexico, U.S. prices for chicken and chicken cuts would not be significantly affected by the increase in Mexican imports.