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Comparative Advantage and Labor Issues in theLivestock and Meat Industry in Mexico and the U.S. Derrell S. Peel Department of Agricultural Economics Oklahoma State University Comparative Advantage What will be produced? Resource allocation Trade Implications U.S. Beef Exports to Mexico Geoclimatic Resources 1.97 million square kilometers in total 1.1 million square kilometers used for grazing 9 hectares/AU stocking rate 11 percent arable land 21-24 million hectares planted 0.2 hectares/person Traditional Cattle Marketing System Changes in Consumer Beef Demand Increasing Quantity Growing preference for fed beef Percent of Slaughter Cattle by Type in Mexico City Monthly, April 2000 – February 2008 New Cattle Marketing System Cattle Exports by State of Origin Comparative Advantage in the Livestock and Meat Industries Other issues Public infrastructure Roads Legal/financial systems Industry infrastructure TIF slaughter plants Boxed beef Retail Food Marketing Important Factors Changes in beef demand More intensive production systems Internal animal and product flows Regional considerations Competition with other meat industries A Delicate Balance Opportunity The increase in beef demand and especially in the proportion of demand for fed beef. Threat The need to use more intensive production systems and the increase in concentrate feeds in competition with pork, poultry and milk production. Comparative Advantage Summary Forage and feeder cattle production Export and domestic markets Limited cattle feeding and meat processing industries Market focused Feed disadvantage Less intensive, more by-product use Small-medium scale integrated operations Continued beef imports Quantity and specific products South American product? Labor Issues in the Livestock and Meat Industries Changes in the U.S. Meatpacking industry Large scale operations using more technology and large amounts low-medium skilled labor Located in rural areas Hispanic labor is very important * Arid/Sem
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