Agri News Mexico – January 2014

Agri News Mexico

Agri News Mexico There are expectations in the different agricultural activities for 2014. The Federal Government, through the Ministry of Agriculture continues its changes towards the improvement of this central sector and has announced an upcoming large reform.

Ambassdor Hogewoning delivers the results of the Pre-Feasibility Study of an Agrifood Cluster for the state of Chiapas to Mexico’s Minister of Agriculture (center) and Deputy Minister (right)

Welcome to Agri News Mexico, the January 2014 edition, with agricultural news of Mexico and the agricultural office of the Netherlands Embassy. Please send us relevant news on your operations in Mexico you may wish for us to include in this publication in the months to come.

Agri News Mexico is a monthly bulletin prepared by the agricultural office of the Netherlands Embassy in Mexico. It is a compilation and translation of the most relevant news in the Mexican agricultural sector. This agricultural office is not responsible for the truthfulness of the information presented here, but we can always offer the list of information sources upon request.

Among the most important ones have been the interest to develop a structural reform for agriculture and improvement to norms and regulations involving products and services in agriculture. The first step towards this has been the publication of the Sectorial Program of Agri food, Fisheries and Food Development 2013-2018, issued on December 13, 2013. The recent meetings of Minister of Agriculture Martínez y Martínez with experts of Wageningen University to discuss the National Agrologistics Plan and the National Agroparks System was also an interesting issue that will have an impact in the development of the rural sector and the overall production scheme. Last January 9 there was another meeting with Wageningen experts where Ambassador Hogewoning presented the results of the PreFeasibility study for the development of an Agri Food Cluster in the state of Chiapas. In the international arena, Mexico continues to find trade opportunities such has been the case of the recently planned Free Trade Agreement with Turkey, and continued meetings in Asia, both for learning new technologies and also to generate more market access opportunities. We are now at the start of a new year full of expectations and hopes for the improvement of agriculture in Mexico and the Dutch-Mexican connections. =================================

E-mail: [email protected] Tel. +52 55 11 05 65 58 (NEW NUMBER) Enjoy your reading! Editor: Leonora Hammer Coordinator: Gabrielle Nuytens-Vaarkamp 1 Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

Agri News Mexico1

The new Program represents the continuity of the Government’s efforts to mitigate the problems encountered by the agricultural sector, and to reduce restrictions to improvements.

MARKETS Sectorial Program for the Development of Agrifood, Fisheries and Food2 President of Mexico, Enrique Peña Nieto issued a decree, last December 13 that approves the Sectorial Program for the Development of Agrifood, Fisheries and Food. The decree is based on the National Development Plan 2013-2018, and will be valid also during the same period. This decree is valid as of its issuance and is obligatory for all ministries and governmental organizations, according to their respective competencies. The Program is based on a diagnosis of the agricultural sector in Mexico, considering elements such as food security, price volatility, climatic change, production and innovation factors, the Mexican position of agrifood products in export markets, population in rural areas, the situation of water in the countryside, financing and sustainability, among others. The integral strategy contemplated by the Program is to reach the maximum potential of the agrifood sector, understood by the need to have productivity, competitiveness, profitability, sustainability, fair and food safety in the sector. The basis for this improvement are 10 pillars: - change small productive units into food clusters; - optimal use, technification and sustainability of water; - national production of strategic inputs: fertilizers and improved seeds; - management and prevention of climate and market risks; - promote the production of healthy and safe foods; - support timely and competitive financing; - assistance to regional development, agroparks and strategic projects; - planning of the supply-demand balance; - new organizational model of ministries for more flexibility, innovation, timeliness. 1

Please contact: e-mail: [email protected] for more detail of this information. 2 Source: www.siap.gob.mx

We see this Program as a first step to develop the longawaited reform of the agricultural sector. It sets the conditions and priorities, as well as the general scheme under which the actions will start taking place. In this sense we are satisfied that metropolitan food clusters and agrologistics, mentioned in the National Development Plan 2013-2018 continue to be conceived as relevant means to improve productivity, reduction of food losses and a means also to improve Mexico’s food security. Wageningen University and the Mexican Federal and local governments are in close contact for the development of studies aimed at agrifood clusters in several states. Also, there is close collaboration for the development of a national agropark network and a National Agrologistics System.

Agrologistic visión for Mexico3 During a meeting at the Mexican Ministry of Agriculture, Dutch experts of Wageningen University presented their findings for the agropark infrastructure and agrologistics project in Mexico to the Minister of Agriculture, Dutch Ambassador Hogewoning and high level officials of the Ministry and representatives of the Dutch Embassy. Agroparks have been conceived as an optimal means to minimize losses in production and distribution of agricultural goods, and add value to primary products. This infrastructure will also allow to take advantage of the export potential of agricultural products. The first results of this agrologistic program are expected to be seen in 2014 under the National Agropark Program. Minister Martínez y Martínez emphasized his aim to have a productive and competitive agricultural sector with an efficient agrologistics net in order for food to arrive to consumers promptly and with high quality. Peter Smeets, of Wageningen University stated that a model of regional development will strengthen the net to transform primary products into value added ones, as well as enhance an efficient distribution scheme within the country and towards export destinations. 3

Source: www.sagarpa.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

2

Agri News Mexico – January 2014

Wageningen Food & Biobased Research - Wageningen UR will be responsible for agrologistics, while Alterra is responsible for agroparks.

Presentation of the Pre-feasibility Study for an Agri Food Cluster in the state of Chiapas4 The first follow-up meeting in 2014 "Creating a Regional Park for Agroindustrial Development for the Southeast region of Mexico" took place last January 9 at the office of Minister of Agriculture Martínez y Martínez and the presence of the Ambassador of the Netherlands, Dolf Hogewoning, representative experts of Wageningen, high officials of the Ministry of Agriculture and related organizations. The Regional Park of Agroindustrial Development of the Southeast responds to President Peña Nieto’s commitment in that region for the improvement of its agricultural base. Minister Martinez y Martinez stressed that the upcoming great reform of agriculture will seek to detonate building productive infrastructure to make it profitable, competitive and sustainable for agricultural activities. Ambassador of the Netherlands in Mexico, Dolf Hogewoning stated that the creation of this agropark network is the sum of efforts between the Ministry of Agriculture, the government of Chiapas and Wageningen University. Under Secretary of Food and Competitiveness, Ricardo Aguilar said that this project is the first of its kind in the Southeast, and has the support of federal and state government . During the event, the Minister of Agriculture received the results of the pre-feasibility study for the creation of an agropark to be built in the state of Chiapas. At the meeting, the year agenda was defined. It provides the delivery of the master plan in August, and beginning of construction in November. Minister Martínez y Martínez said that this is a highimpact project that is integrated within the National System of Agroparks, promoted by the Federal Government, through the Minister of Agriculture.

In detailing the prefeasibility study, the expert at the University of Wageningen , Peter Smeets , said the state has a potential in various areas of the food industry, enough to participate competitively in the global market , with a focus on Central America. Abounded that the new infrastructure will involve key stakeholders in the production chain, who will make consensus decisions throughout the entire development process of the cluster. Among the most important results of the feasibility study are the identification of four areas within the state of Chiapas, which are suited to the development of an AgroPark features, located at: Comitan, Palenque, Tuxtla Gutiérrez and Tapachula. In the next step , to develop in the coming months a detailed feasibility study to determine precisely the place with the greatest potential , and forums will be made to publicize the project to investors and regional entrepreneurs. At the meeting the Secretary of Planning of Chiapas, Juan Carlos Gomez Aranda participated on behalf of the governor of Chiapas.

Structural reforms5 Minister of Agriculture Enrique Martínez y Martínez indicated that in 2014 there will be a proposal to reform the agricultural sector with the participation of producers, productive chains, legislators and other interested parties involved in the sector. Changes are already being conceived such as the new operation rules, schemes for investment and others for a real structural reform that benefits the sector. He also said that 2013 was a year focused on organization, planning and restructuring for the construction of public policies, programs and resource management all of them aimed at an agricultural sector to become a national growth and development base. New import schemes, measures for the local production of nitrogen-based fertilizers and the further development of development banking for the rural sector, have been important advances in this field.

5 4

Source: www.sagarpa.gob.mx

Source: www.sagarpa.gob.mx 3

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

Basic statistics for the rural sector6

Self-consumption agriculture against hunger8

This year the agrifood and fisheries information service (SIAP) certified 176 technicians for the application of the technical norm for the generation of basic statistics.

The self-consumption agriculture project is one of the important actions of the National Cruzade Against Hunger. This project is aimed at improving productivity conditions, post-harvest handling and income of corn producers.

The objective is to improve and have trustworthy and precise statistics for the generation of public policy and decision-making, said the Director in Chief of SIAP Patricia Ornelas Ruiz. The certification process began in 2011 and today this information is very valuable in order to have more certainty in agricultural numbers, based on state-ofthe-art collection and analysis techniques for the handling of agricultural data.

Agricultural and livestock perspectives for 20147 Agrifood perspectives were presented by Minister Martínez y Martínez for 2014. Among the most important ones are: - Self-sufficiency in white corn for the production of tortilla, and of beans. - Rural reforms for the development of the agricultural sector. - New public policy in favor for agricultural financing. - Aquifers and dams are in good condition, residual humidity is good in rain areas. - The financial reform is expected to generate credit instruments for be benefit of the rural sector, such as a real development bank. - Mexico continues its trend in the export of vegetable and fruits to different countries abroad, among them: avocado, guavas, mangos, bananas, nuts, tomatoes, and strawberries. - Energetic reforms are expected to improve costs for inputs, gas, diesel, fertilizers and electricity. - In November, there was an increase in the budget for the sector of more than 12% in real terms, as compared with the one in 2013.

The strategy already is operating in 19 states in the country (Campeche, Chiapas, Chihuahua, Durango, Guerrero, Hidalgo, Jalisco, Estado de México, Michoacán, Nayarit, Oaxaca, Puebla, Quintana Roo, San Luis Potosí, Sinaloa, Tabasco, Tamaulipas, Veracruz and Yucatán), with a surface of 244 thousand hectares, 965% of the programmed target, with an impact in 166 thousand corn producers. The Ministry of Agriculture reported an advance of 95% in this project which started last April. By means of technological packages, the Ministry will try to increase productivity with seeds, fertilizers, basic equipment for plan production, phytosanitary control and postharvest family silos. The project includes giving producers technical assistance to guarantee the success of their crops.

Production of fertilizers9 The Ministry of Agriculture, PEMEX, the national petroleum company and the Ministry of Energy (SENER) are working together for the production of fertilizers for the rural areas. Low cost fertilizers are an important factor to reduce agricultural production costs, and the use of quality fertilizers are important for good crops. Authorities of SAGARPA, PEMEX an SEDER agreed that inter-institutional efforts are central to develop national efforts for the production of fertilizers. Currently, Mexico has six production units of fertilizers belonging to the private sector, mostly specialized in the production of phosphate-based fertilizers. The authorities aim towards a model for accessible and competitive fertilizers (nitrogenous and potassiumbased) for the agricultural sector. The national project is analyzing the used of production units already available and owned by the Federal Government, combined with training, soil analysis and agreements with organizations and state governments.

6 7

.

Source: www.siap.gob.mx Source: www.sagarpa.gob.mx

8 9

Source: www.sagarpa.gob.mx. Source: www.sagarpa.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

4

Agri News Mexico – January 2014

According with the Ministry of Agriculture, Mexico only utilizes fertilizers in 65 percent of the surface sown, but it is even less in low-income areas, such as the South of the country.

Around eight thousand producers of poinsettia flowers, most of them in the states of Morelos, Puebla and Michoacán, as well as from the Federal District, sold their flowers in the local market.

Improvement of regulations in agriculture10

Mexico is the fourth country in cultivated area of poinsettias worldwide, with around 300 hectares of production of poinsettia pot plants.

The Minister of Agriculture announced an Agricultural National Norm Program 2014 that considers the analysis and update of 101 Official Mexican Norms (obligatory) or NOM’s. The Ministry authorized the cancellation of 12 Official Mexican Norms, the modernization of the regulatory framework in order to improve the sector’s competitiveness and to facilitate processes, among others. Among the most important norm cancellations were those related to residues in antibiotics, hormone compounds, toxic chemicals and other equivalent product. The committee for the Agricultural Norm Program 2014 involves the participation of the Ministry of Agriculture, the Ministry of the Environment, the Ministry of Communication and Transportation, the Ministry of Health and the Ministry of Marine, as well as organizations of producers, traders, higher education centers, service providers, and consumer representatives.

HORTICULTURE Production and trade of poinsettias11 Mexico is an important producer of poinsettia flowers, which are mostly sold during the winter season, for Christmas and New Year. This year, it is expected that production of poinsettia flowers reached 20.5 million plants, with a value of 40 million Euros and jobs by three thousand direct and nine thousand indirect jobs. According to producers, bulbs and cuttings were also exported to foreign markets such as the United States (bulbs and cut plants), by 58 tons, Spain (38 tons), Japan (20 tons), Holland (7 tons) and other countries (18 tons). 10 11

Source: www.sagarpa.gob.mx Source: www.sagarpa.gob.mx

Video on Sustainable Use of Water in Greenhouses in Mexico Still available through:

http://mexico.nlambassade.org/nieuws/2013/9/ the-sustainable-use-of-water-in-greenhouses-inmexico.html

ANIMAL PRODUCTION Growth of the fisheries and aquaculture sectors12 As of January 1st, it is expected that reforms will improve the conditions of the fisheries and aquaculture sectors. Resources will be applied in three components, namely, capitalization, productive and commercial integration, organization and sustainability and support to the consumption of fishery and aquaculture products. In 2014, the National Fisheries and Aquaculture Council (CONAPESCA) will have resources to increase sustainable production and the support consumption of fish and aquaculture products, together with the use of energetics for the sector.

Increase of budget for livestock activity13 The budget for livestock will grow by 34.6% in 2014. The Livestock Support Program will include now 9 different components, for sustainability, repopulation of the livestock base, genetic improvement and productive incentives. Among the new components will be the Pig Program (Propor). 12 13

Source: www.sagarpa.gob.mx Source: www.sagarpa.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

5

Agri News Mexico – January 2014

Another important effort will be the Cross Program of Innovation, Research, Technological Development and Education, which will give training to producers and technicians in 2014. This program also includes the preservation and promotion of livestock genetic resources.

AgriMexico participation at IPPE14 The new consortium AgriMexico, composed of competitive Dutch companies in the field of animal production and sustainability will be present at the upcoming event: IPPE in Atlanta, Ga. in the United States. The International Production & Processing Expo (IPPE) will serve as the umbrella name for the new U.S. Poultry & Egg Association (USPOULTRY), American Feed Industry Association (AFIA), and American Meat Institute (AMI). The new show is the result of the colocation of the International Poultry Expo (IPE), International Feed Expo (IFE), and AMI’s International Meat Expo (IME). The three shows operate under one structure, creating one of the 50 largest tradeshows in the United States. The entire tradeshow is expected to include more than 1,000 exhibitors and close to 400,000 net square feet of exhibit space. Dutch participants of AgriMexico consortium will also meet with Mr. Sergio Chávez, Executive President of the Mexican Union of Poultry Producers (UNA), where they will discuss about the situation of the Mexican poultry sector and its plans for the coming years.

For companies participating or visiting IPPE and wishing to meet with Dutch or Mexican companies, please contact us in order to arrange match meetings. [email protected]

Ministry of agriculture supports international cooperation for shrimp production15 A delegation of researchers and producers visited Asian countries to take advantage of their experience in the recovery of shrimp production. In Vietnam, the Mexican representatives participated in the Aquaculture Congress of Asia, that took place in Ho Chi Minh; this event discussed issues relative to research of aquaculture health particularly for shrimp. During this scientific mission, the Mexican delegation also visited several shrimp farms in Thailand where intensive production is being used. Later on the mission travelled to Indonesia for the same purpose. The exchange of knowledge and experiences in aquaculture health is relevant for Mexico, in order to support an increased animal and food health.

Reception of research fishing vessel16 The Director General of INAPESCA, the National Fisheries Institute, Raúl Adán Romo Trujillo was in charge of receiving a research fishing vessel. The operation of this vessel will allow to explore Mexico’s exclusive economic zone in the Pacific. After 18 months of works, the Spanish company Astilleros Armón Vigo made the formal delivery of the ship to the Mexican authorities. According to the Mexican officials, the operation of this vessel, construction supported by the Ministry of Agriculture, will set a new phase in fishery research for Mexico. The functioning of the ship will allow to generate new fishing species of commercial interest, that live in very deep areas of the ocean. It will also allow to do research, as the vessel has 7 laboratories with high technology equi8pment for the analysis of species and other oceanographic studies. The vessel will operate during a first phase in the north of the Pacific ocean where research trips are being planned in areas where there is evidence of the existence of black cod, crab, shrimp and deep ocean squid.

14

Source: http://ippexpo.com/

15 16

Source: www.sagarpa.gob.mx Source: www.sagarpa.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

6

Agri News Mexico – January 2014

This vessel, equipped with high technology, will be able to explore more than 2.1 million square kilometers of the Mexican area of the Pacific Ocean.

Mexico chosen to lead the FAO Regional Commission of Livestock Development17 The Council of the XII Commission of Livestock Development for Latin America and the Caribbean (CODEGALAC) of the UN’s FAO, chose Mexico to direct this international organization, as well as to develop the working plan for the period 2014-2015. The organization is interested that there be publicprivate alliances in the livestock chain, in order to have a sustainable and competitive activity. Mexico will be responsible to develop and to favor the execution of public policies for the development of the livestock sector in countries of Latin America and the Caribbean. It is also important to generate social strategies and increase the levels of health and food safety in the livestock activity and chain. Another very important aspect is to accompany producers with technical and scientific assistance.

FOOD Mexican investments in the food sector18 With the recently passed Energy Reform practically all the talk has been about the attractiveness of investing in Mexico. What really hasn’t been discussed, and what some believe says more about the future of Mexican business, is the increase in investment by Mexican companies outside of Mexico. According to a report by the U.S. Embassy in Mexico “In 2012, Mexican investment in the U.S. went up by 11 percent” reaching some US$27.9 billion, What is particularly interesting is that a significant portion of the investment in the U.S. has been by the country’s leading agribusiness companies.

Bimbo, for example, has a number of leading U.S. bakery brands, including Sara Lee, Arnold and Entenmanns’s. Of course Sigma Alimentos, Arca Grupo, Herdez, and most recently Industrias Bochoco have also undertaken acquisitions in the U.S. The U.S. isn’t the only market where Mexican agribusiness investment has been active. In November, Sigma acquired the Spanish company Campofiro The beverage companies have been particularly aggressive in South America and in the last quarter of the year Lala dairy company announced a US$50 million investment in Nicaragua.

Tamarind-based package19 Students of the Institute of Technology and Superior Studies of Monterrey (ITESM) designed plastic packaging made from tamarind seeds that have antimicrobial properties and are used for health products and food. The private education institution reported that the project developed by students of Biotechnology Engineering and Architecture. The researchers created the company Bioneek, whose main value is that through tamarind seed market products of high added value. Tamarind is produced in Mexico in large quantities and used for food production and also as candy. Now it can also be used for packaging for food and health products.

Research for fruit and vegetable coatings20 Researchers from the School of Higher Studies (FES) Cuautitlán of the National University of Mexico (UNAM) develop active packaging: coatings to extend the life of fruits and vegetables that allow release antifungal substances that prevent fungi degradation and decompose fresh fruit. "This project arises from the need for the country as a major producer of fruits and vegetables, where more than 45 percent of these foods is lost due to mishandling, improper storage and improper handling," says Andrea Trejo Maria Marquez, head of the research Project.

17

Source: www.sagarpa.gob.mx Source: Agribusiness World this Week. KS Advise. [email protected]. Dec. 23-27, 2013 18

19 20

Source: Notimex Source: La Crónica 7

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

These containers are made from raw materials supplies, for example, the cactus mucilage, material obtained by cutting and cooking the traditional Mexican food. "That gelatinous substance has high nutritional properties. We can collect and dry it, then use it as a template to produce these containers to which we add natural antifungal compounds were obtained from typical Mexican plants like oregano, damiana, eucalyptus, rosemary and governor," she added. These Mexican semi-desert plants are added to the mucilage along with other additives to achieve the consistency that is required, that is, with this mix the fruits and vegetables are coated individually in order to preserve and prolong life. So far, she said, we have got satisfactory evidence in strawberries, raspberries, blackberries, blueberries, custard apple, plum, orange, lemon and mango (varieties of Kent, Keitt and Ataulfo), as well as squash, cucumbers and tomatoes. Another benefit, she mentioned, is that the antifungal extracts from plants possess antioxidant capacity and give a plus to the fruits themselves are important sources of antioxidants, so when people consume the fruits with active packaging are ingesting potential foods help prevent some diseases like cancer and high cholesterol levels. The containers are applied by dipping the fruit in the solution so that the coating is formed by spraying or when the product is very delicate. After the layer is allowed to dry and in both cases to be the solution in contact with the fruit begins to release the antifungal compound.

2014: Year for tea and other healthy beverages21 The market research firm Euromonitor International launched a new e -book by identifying the top five trends in soft drinks throughout North and South America. Overall growth in South America will see several categories of soft drinks as many consumers looking for healthier beverages such as bottled water, juice and tea. Mature North American countries see growing opportunities in drinks like coconut water and liquid concentrates as Mio, Dasani Drops and Nesfruta . 21

"Consumers in America are continually looking for convenience and health benefits in their beverage choices. The coffee and tea pods plus liquid concentrates are bringing both convenience and new to Canada and the United States " said senior analyst Kay Tamillow, “Meanwhile, the trend of health and wellness continues pushing dynamism in drinks soft , especially in emerging markets in Latin America. The growing demand for functional beverages and more natural ingredients is driving the dynamism and new product launches across the region. " Trends highlighted in the study: - Bottled water increases its popularity in many countries, especially in Latin America. In Argentina, Bolivia , Colombia and Chile , bottled water represents a major component of the trend of healthy drinks. In Costa Rica, bottled water has not had such a good performance because consumers are looking for more health benefits and nutrients in their drinks . The ready to drink tea emerged as the fastest growing category in Venezuela in 2013. As the government has implemented price controls in the juices , companies have focused on increasing the production of ready -todrink tea and consumers have shown a favorable attitude toward the category . The ready to drink tea also remains the category with the strongest growth in Ecuador, because consumers believe that the product is more natural and better for your health than carbonated drinks. Coffee has the highest per capita consumption in Brazil (after Europe ) . The government campaign " Brazilian coffee country " aims to help achieve an increase in consumption and reach more than 1 kg per person by 2018. The foodservice has also played a role in the consumption of coffee, with the entry of McDonald's coffee retail market in Canada and the entrance to Starbucks Colombia. Carbonated Beverages. Argentina has one of the levels of consumption of carbonated drinks per highest in the world due to the wide acceptance of these drinks and aspirational consumption per capita what the market is doing well . However, consumption in Uruguay has decreased, since the population is transitioning to older segments that could be influencing the lower consumption.

Source: Euromonitor International

8 Volume 14/1 | number 20 | January 2014

Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

In Mexico, Coca -Cola has begun to direct delivery to homes, as many low-income consumers have made a habit of consuming a diet with tortillas for lunch and main meal.

Tequila market22 Tequila market slowing down: After reaching 312 million liters in 2008, production has moved steadily downward to where it’s projected 2013 production to be 230 million liters. The fall in production reflects a contraction in agave being used for tequila. The Tequila Regulatory Council reports that through November agave use is 14.4 percent less than during the same period last year. Reflecting the agave production cycle it is expected that production to be under pressure in 2014 as well. As overall production has fallen the industry has moved away from producing 100 percent tequila. After reaching 59 percent of total production in 2011, through November of this year 100 percent represented only 42.8 percent of total production. The shift is a way to expand overall availability and to offer a lower priced product to the domestic market that has been rather lackluster. The bright spot is that the export market is still showing signs of strength, up through November by 2.8 percent compared with the same eleven months of 2012.

Food sales

23

If the U.S. agribusiness industry is looking to a not very exciting 2014, the Mexican agribusiness industry is living a not too exciting 2013. According to the Supermarket and Department Store Association (known by its Spanish acronym as ANTAD) for the first ten months of this year same store supermarket sales were off by 1.3 percent compared with the same period in 2012. The fall in sales occurred even though food prices grew slower than the overall increase in the Consumer Price Index (CPI).

So why haven’t food sales grown? A possible answer is that the economic growth has been weak. Analysts are now estimating the GDP will grow by less than 1.4 percent and unemployment remained sticky downward at around five percent. Taking a somewhat longer view than just the first ten months of this year, high food prices are still pressuring the market. Since December 2011 the CPI increased by 6.1 percent while food prices grew 9.4 percent. Remittances, which are important for lower socialeconomic level consumers, are also down, off 5.9 percent so far this year. Additionally, during the course of the year consumer credit growth has slowed down. Facing all these bearish factors consumer confidence reversed its, albeit moderate, upward trend. And, cautious consumers aren’t big spenders, not even for food.

TRADE Bilateral relations: Mexico - Turkey24 In response the invitation of the President of Turkey, Abdullah Gül , President of the United States of Mexico, Enrique Peña Nieto, paid a state visit to Turkey from 15 to 19 December 2013 . Both sides decided to initiate a new era in bilateral relations, raising the level of "Strategic Framework for Cooperation and Partnership XXI Century". Both sides reaffirmed their commitment to deepen and consolidate a multidimensional relationship, given the similarities in the size of their economies, the enormous potential for cooperation and the important role of both countries in the international arena. In this context , they agreed to strengthen the bilateral dialogue and cooperation in the multilateral sphere. Both countries have decided to increase their cooperation and coordination in multilateral organizations, such as the United Nations (UN), the G20 and the OECD, to achieve substantive results on common issues such as climate change organizations, drug trafficking, the fight organized crime, migration, disarmament and non-propagation, peace and world security , economic and social development, and the promotion and protection of human rights.

22

Source: Agribusiness World this Week. KS Advise. [email protected]. Dec. 16-20, 2013 23 Source: Agribusiness World this Week. KS Advise. [email protected]. Dec. 9-13, 2013

24

Source: www.presidencia.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

9

Agri News Mexico – January 2014

Mexico and Turkey will begin negotiating a comprehensive Free Trade Agreement (FTA). The governments of both countries agreed that the completion and smooth functioning of a FTA is essential for achieving true economic potential of the relationship. In this regard, the Presidents will be holding the first meeting of the Treaty negotiations in the first quarter of 2014. Both sides began the implementation of the recently signed "Memorandum of Understanding between Bancomext and Export Credit Bank of Turkey ( Türk Eximbank) on Cooperation for Export Credits" and "Memorandum of Understanding between the Agency and ProMéxico Promotion and Support Holding of Turkey ( ISPAT )" which will encourage long-term trade between the two countries . The two Presidents underscored the importance of the private sector to promote strategic business partnerships to identify and develop a more efficient and effective niche investment in the two countries, as well as others, and promote trade. The leaders received with satisfaction the "Strategy and Action Plan for Mexico," paper prepared for the Business Council Mexico and Turkey. The parties agreed to deepen cooperation in renewable energy, particularly geothermal and hydropower, and energy efficiency. They also agree that the G20 is the most relevant to international economic dialogue between the world's largest economies and a key to define new channels of cooperation and agreement mechanism forum as well as to promote the reform of the international financial system. The Mexican side expressed its appreciation for the Presidency of the G20 that will be taken by Turkey in 2015 and pledged his full support to the Leaders’ Summit to be held in Turkey at that time.

Cooperation agreement for the agricultural sector: ProMéxico and FIRA25 ProMéxico and Trust Funds to Agriculture (FIRA ) signed a cooperation agreement in order to build a better future for the Mexican agricultural sector looking for ways to ease this financing and the optimal use of credit resources in the agricultural sector. The agreement established among its main activities, promoting the integration of farmers and rural enterprises in the export market , encourage foreign direct investment and co - investment and expand the capacity of attention to the target population in this case the food and agricultural sectors. According to Francisco N. González Díaz , Director General of ProMéxico, in 2012 exports in this sector reached a record level that exceeded 23 billion dollars. He stressed that this agreement is part of PROAGRO Productive strategies, which was announced a few weeks ago by President Enrique Peña Nieto. "Through this program, the Government of the Republic seeks to increase the food productivity in the country and achieve a surplus trade balance by 2018 in the agricultural sector," he said. "ProMéxico from its scope, in addition to supporting small producers as well as synchronization of supply and demand for agricultural products in international markets," noted Gonzalez Diaz. Emphasizing that the signing of this agreement seeks more efficient use of public resources and avoid duplication of efforts, the Director General of FIRA, Rafael Gamboa said the agreement gives formality to actions and has been making FIRA with ProMéxico, and respond to a specific need in the market for agribusiness operating by way of integrated chains. This interagency coordination, he said, gives us the opportunity to focus actions on behalf of producers and food businesses agro and fisheries sector with export potential and jointly promote their participation abroad and achieve greater impact, likewise enabling the exchange of information on issues related to export projects , financing, international markets and especially international demand characteristics as a basis for implementing programs of work for the successful integration of producers and companies in chains worldwide. 25

Source: www.promexico.gob.mx 10

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

To government officials, businessmen and farmers, both parties agreed to identify, design, develop and / or strengthen projects oriented to foreign trade and attracting foreign direct investment in the agriculture, forestry, fisheries and agro-industry and other connected or related activities that take advantage of foreign market opportunities. Globally, Mexico is the largest exporter of tomato, avocado, mango , onion , guava and papaya. Also the country is among the top five global exporters of watermelon, lemons, raspberries, asparagus, strawberries, melons and spinach, among others.

Mexico and China sign basis for a bovine meat export protocol26 As part of the actions carried out by the Ministry of Agriculture (SAGARPA) to boost competitiveness and productivity of Mexican primary sector, efforts are undertaken to secure the entry of meat to the Chinese market. From November 29 to December 6 , technicians conducted an audit visit to assess the Mexican Veterinary Services , as part of the process to advance the opening of the export market for beef. The National Service of Health, Food Safety and Quality (SENASICA ) and the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ ) of the People 's Republic of China , signed the foundation protocol for the export of beef from Mexico to China. The mission has enabled a greater rapprochement and understanding between the two countries' health systems and infrastructure show Mexicans Veterinary Services to provide health and safety guarantees required by the Chinese authority.

Mexican companies in Europe’s most important food exhibition27 With the support of Mexico’s Ministry of Agriculture 15 agribusinesses participated in the Food Ingredients exhibition Europe 2013 in Frankfurt , Germany.

26

Source: www.sagarpa.gob.mx

27

Source: www.aserca.gob.mx

Among the products presented were : agave syrup and inulin ; variety of dried chili peppers, whole , powder and flakes, cocoa, pepper, coffee, oregano and other spices , and medicinal herbs, dyes, powder and aloe vera juice. For this edition, the Agency Services for Agricultural Marketing and Development Markets ( ASERCA ) of the Ministry of Agriculture joined agribusinesses from the states of Chihuahua, Durango , Tlaxcala , Tamaulipas , Jalisco , Mexico City, Puebla, Baja California, Veracruz , Colima and Queretaro , who offered an interesting and varied selection of products produced in Mexico. In 2013, this exhibition was attended by over a thousand exhibitors from 100 countries world-wide, which provided a showcase of the most innovative and highest quality products. In recent editions of Food Ingredients Europe have received a total of over 500 thousand people, in different locations where they have done this event. In the most recent, held in Paris, France, from November 29 to December 1, 2011, ASERCA supported a group of 13 Mexican companies achieved sales of 5.9 million dollars and well established business relationships with European companies.

The XX Foreign Trade Congress28 Last December the Foreign Trade Congress took place in Mexico with the attendance of 35 producers and small agribusinesses from the states of Aguascalientes , Chihuahua , Colima , Guanajuato , Chiapas , Jalisco , Michoacán , and Zacatecas Mexico State and the Federal District. The purpose of the event is to help farmers know more about foreign trade operations and be able to trade in other markets. The central theme of this conference was innovation as a key to achieve greater competitiveness in international markets item as well as the tools that are necessary to ensure access and retention in export destinations. Among the conferences attended by farmers supported by ASERCA are: " Mexico and International Relations to support the foreign trade " and " The TPP and the Pacific Alliance , challenges and opportunities for Mexico ,".

28

Source: www.aserca.gob.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

11

Agri News Mexico – January 2014

Food and agricultural trade – looking to a better 201429 With ten month data available the outlook for the food and agricultural trade balance is that it will continue to be in a deficit position, but just over one billion dollars less than the US$2.3 billion deficit in 2012. Much of the improvement comes as a result of the growth in processed and semi-processed agricultural product export, and the contraction in the value of agricultural imports. This, it is believed, reflects the changing structural nature of the food and agribusiness sector, where processed and semi-processed agricultural products have become more important for the Mexican economy. The outlook for 2014 is for a continued improvement in the food and agricultural trade balance. In part this is due to an expected increase in domestic production on the back of increased budgetary support for agriculture as well as lower commodity prices, particularly grains and oilseeds which account for a large portion of the country’s agricultural imports. At the same time the projected improvement in the U.S. economy – destination of most of Mexico`s food exports – will support increased exports of processed and semiprocessed agricultural products and buffer the expected increase in food imports as a result of the improved outlook for Mexico’s economy in 2014. Looking to 2014 a US$895 million trade deficit is projected, which will be the first time the deficit has fallen below one billion dollars since 1997.

However, in spite of the increase in corn and meat production, the overall GDP of the primary sector grew by an annual average of only 1.7 percent. Mexico’s food and agricultural trade balance continues in a deficit position. What is apparent is that NAFTA was neither the problem nor the solution. Agriculture’s performance over the last 20 years was the result of agricultural policies that were largely disarticulated from the reality of both NAFTA’s potential benefits and costs.

Milk powder quota31 Last December 30th, the Ministry of the Economy (SE) modified the mechanism of quota assignment to import, free of tariff, up to 80 thousand tons of milk powder, coming from countries members of the WTO. On the same date, the Ministry of the Economy also published in the Official Gazette, a modification to quota assignment to import, free of tariff, up to 44.2 thousand tons of dairy preparations coming from any country.

BUSINESS PARTNER SCAN The Agentschap NL in cooperation with this Agricultural Office offers the

NAFTA’s 20th anniversary30

“business partner scan”

Twenty years ago there were dire predictions that Mexican agriculture would all but disappear under the competitive pressure from what was argued as the heavily subsidized U.S. farm system. Now, 20 years later Mexican agriculture is still around. Between 1993, the year before NAFTA went into effect and 2012, the last year of official data, corn production increased by 21.8 percent. During the same period, meat production increased by 87.6 percent. Export also grew, increasing over six fold in value terms.

helping find market entry and contact potential agents or distributors and also manufacturing partners. For more information, please contact: http://www.agentschapnl.nl/onderwerp/zakenp artnerscan-vind-uw-zakenpartner-het-buitenland

29

Source: Agribusiness World this Week. KS Advise. [email protected]. Dec. 30- Jan.4, 2014. 30 Source: Agribusiness World this Week. KS Advise. [email protected]. Jan. 6-10, 2014.

31

Source: www.iqom.com.mx

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

12

Agri News Mexico – January 2014

SUSTAINABILITY Sustainable forestry production32 During his visit to Forest Germplasm Bank ( GDB ) of Oaxaca , the Minister of Environment and Natural Resources (SEMARNAT), Juan Jose Guerra Abud , said one of the goals of the Government is to recover the forest use of those acres currently are unproductive , as this will help to counteract deforestation in the country. Accompanied by the Governor of Oaxaca, Gabino Cue Monteagudo , Secretary Guerra Abud said the idea is to plant ten thousand acres of forest with an annual scheme that allows use of the timber resource in the area, thus put into practice the restoration programs and soil conservation . Located in the Forest " The Tequio " This GDB has a level of 95 percent germination, where seeds of the highest quality cedar, red cedar, mahogany, oak, caobilla as well as different types of pines are being produced, this center is one of the largest in the country and is sponsored by the state government , the Alfredo Harp Foundation and the government of Sweden . Currently the Forest Germplasm Bank produces 20 tons of seeds per year and are 55 percent of total capacity; presents different agreements with other educational institutions like Tech Veracruz, National Polytechnic Institute (IPN ), the Polytechnic Institute of Madrid, among others.

He noted that the historical view of seeing waste as trash must be eradicated in Mexico and municipality waste today should be seen as a source of business . “State governments with whom we talk to are aware of the need to coordinate a comprehensive management of this waste , which includes collection, sorting and industrialization," said Minister Abud. On this subject, during his trip to Warsaw to participate in the 19th Conference of the Parties ( COP19 ) of the United Nations Climate Change , the Minister of SEMARNAT made a stopover in Madrid, Spain , where he visited the Technology Park Valdemingomez , which concentrates since 1978 all treatment plants of urban waste in this town . The purpose of this visit was to learn about the technology used in each of the processes at work in this place, so the Ambassador of Mexico in Spain , Frances Elizabeth Mendez Escobar, coordinated this journey separation plants and rating recyclable materials and composting of organic matter, degassing, extraction and energetic use of biogas and anaerobic digestion, which aims to transform the organic fraction selected separation plants in two products: biogas and digestion. The federal official said such examples should be taken in Mexico to promote green business and harness the great potential of the country in the management of solid waste.

The head of SEMARNAT welcomed the existence of the BGF and instructed the Director of the National Forestry Commission (CONAFOR ), Jorge Pérez Rescala to find appropriate mechanisms to purchase seeds and power transfer this technology to other forest nurseries inside Mexico.

Processing waste in Mexico33 The Secretary of Environment and Natural Resources, Juan Jose Guerra Abud , said that one of the goals at the end of his administration is to double the percentage of waste that is processed in the country. 32

Source: www.semarnat.gob.mx

33

Source: www.semarnat.gob.mx 13 Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

ANIMAL HEALTH AND PHYTOSANITARY ISSUES

AVAILABLE PUBLICATIONS

ANIMAL HEALTH

Upon request: at e-mail: [email protected]

Bovine semen

- Made in Holland special: horticulture, 2013 - Presentation (in Spanish): The Netherlands and the agri food sector : a small country, a great partner, 2012 - Booklet: Animal Production Mission, 2013 - The Animal Feed Industry in Mexico (in Spanish) - Mexican Protected Horticulture – WUR 2011 - Article: The Mexican Animal Sector, 2011 - Trade Fairs and Publications in Mexico, 2013 - Latin American Food Processing Machinery, 2010 - Presentation : Doing Business with Mexicans, 2013 - Optimal Climate Regions in Mexico for Greenhouse Crop Production, by Jop Kipp - Business Opportunities in the Mexican Dairy Industry - WUR 2010 - Mexico Factsheet, 2009 (Dutch version) - Mexico Ornamental Sector, 2007 - Mexico Animal Production, 2007

Imports of bovine semen from the Netherlands have a new export certificate. For more information on the export/import requirements for bovine semen from the Netherlands, please see www.vwa.nl in the Netherlands or contact our office at [email protected] in Mexico.

Import Requirements in Mexico There have been changes in the import requirements of certain products. Let your importer contact the Netherlands agricultural office in Mexico or the Dutch Food and Consumer Product Safety Authority (www.vwa.nl) for the latest updates on import conditions. Products that have changes of import conditions in Mexico are:    

34

Bovine: bovine semen – new certificate delivered Pig: Hydrolized protein – new certificate in process Horses: live horses - new certificate Horses: horse semen – new certificate

Publications by FAS / USDA35       

34

For more information, please contact: [email protected]

35

Food Processing Ingredients (31-12-13) Citrus Annual (30-12-13) Mexico Announces Import Tariff Changes for Selected Commodities (24-12-13) Avocado Annual (19-12-13) 2012 National Survey of Mexican Household Income and Expenditures (19-12-13) Expo Restaurantes 2013 – trade show evaluation (16-12-13) Market Situation Update- Mexican Market for Craft Beer (11-12-13)

Source: www.fas.usda.gov 14

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

Agri News Mexico – January 2014

UPCOMING EVENTS 2014

TRADE AND INVESTMENT OPPORTUNITIES

Participation of the Agricultural Office36: -

IPE in Atlanta, 2014

Animal production exhibition. January 28-30, 2014. More information: http://ippexpo.com/ -

NOTE: The Agricultural Office of the Netherlands Embassy in Mexico is not responsible for the trade or investment agreements or contacts presented in this document

PMA Fresh Summit 2014

From the Netherlands:

Horticultural exhibition. October 17-19 2014. More information: http://www.freshsummit.com/ -

-

-

Looking for buyers of new and used agricultural machinery and tractors.

Horticultural exhibition. Dates to be confirmed. For information: www.expoagroalimentariagto.com

-

Seeks Mexican large distributors of agricultural machinery.

Other events

-

Looking for Ford and New-Holland Farm tractors in Mexico for export overseas.

Expo Agroalimentaria Guanajuato, 2014

Expo Agro Sinaloa, 2014

Horticultural exhibition. February 19-21, 2014. More information: www.expoagro.org.mx -

-

Company requires contact with Dutch manufacturers of mixing charts, for their distribution in Mexico.

-

Land (80 has.) available in the state of Chiapas located close to livestock and corn production areas.

-

Student of Agricultural Engineering in Mexico seeks a temporary job (6-months) in a company in the Netherlands to comply with his curricular activities. Preferred months: January/February to July 2014.

-

Graduate of finance, speaks English, French and Spanish looking for a job in International trade in Mexico or the Netherlands.

Agro Baja, 2014

Horticultural exhibition. March 6-8, 2014 More information: www.agrobaja.com -

From Mexico:

Alimentaria Mexico, 2014

Food & beverages. June 2014 (to be confirmed) More information: www.alimentaria-mexico.com If you wish to receive the new list of events in Mexico 2014, please contact: [email protected]

For information on these contacts or if you want to have trade or investment opportunities published here, please contact: Embassy of the Kingdom of the Netherlands – Agricultural Office

E-mail: [email protected]

36

The Agricultural Office does not expressly recommend of favor the participation and/or success in these events.

Volume 14/1 | number 20 | January 2014 Ministry of Economic Affairs - Office of the Agricultural Counselor Mexico - Embassy of the Kingdom of the Netherlands -

15