Mexico to Impose Duties on U.S. Chicken Imports

Three of the largest poultry companies in Mexico won their battle to impose anti-dumping duties on U.S. competitors exporting leg quarters south of the border.

From January through May of this year broiler meat shipments to Mexico grew by 18% over last year to 217,062 tons from U.S. companies like Tyson Foods and Siloam Springs-based Simmons Foods.

The Mexican Ministry of Economy announced this week the final decision regarding the anti-dumping case led by Bachoco S.A. — the company that purchased Fort Smith-based O.K. Industries in 2011.

The duties won't be assessed until the Mexican market stabilizes from the recent Avian Influenza outbreak. But the government did confirm the existence of dumping conditions induced by U.S. firms selling leg quarters into Mexico at cheap prices undercutting the local industry.

Bachoco and the other companies involved in this process, did not agree with the recommendation to temporarily suspend duties, saying Avian influenza H7N3 was contained and did not affect chicken producers.

Leg quarter exports to Mexico is big business for Tyson Foods, who has had a presence in central Mexico for 20 years and holds the No. 3 market share position, according to company data. In fiscal 2011 Tyson Foods reported chicken exports to Mexico and in-country sales totaling $483 million, second only to China.

The majority of U.S. chicken exports to Mexico are leg quarters — known as the bottom half of the bird. The top half, or breast meat, is preferred and consumed almost entirely in the U.S. But without the export markets for the dark meat, chicken processors can't glean maximum profits per bird.

Late Tuesday (Aug. 7), Tyson and Simmons Foods deferred comment on the recent decision to their trade organization, the National Chicken Council.

Representatives of the National Chicken Council and the USA Poultry & Egg Export Council met last week in Mexico City with high-ranking officials at the Mexican Department of Economy to discuss the issue that has lingered 18 months. The Councils were pleased with the Mexican government's decision to keep trade open and duty free for now but disagreed with the Mexican Trade Commission's finding with regard to dumping.

NCC President Mike Brown who was part of the delegation said, "We continue to maintain that Mexico's basis for making such a determination is flawed and that international bodies would not support such a finding."