(March 19, 11:15 a.m.) GUADALAJARA, Mexico — U.S. exporters are having a tough time selling their products in Mexico, with the world economic crisis compounded by the devaluation of the Mexican currency, which has seen a drop of more than 40% in the past six months.

“It’s a gloomy outlook and a very serious situation right now,” said Nancy Tucker, vice president of global business development for the Produce Marketing Association, Newark, Del., at ANTAD, Mexico’s largest retail expo, which took place March 11-13.

“What we have heard from various economists is that this financial crisis is going to last until the end of the year,” Tucker said. “There is going to be a gradual recovery throughout 2010.”

For U.S. exporters as well as Mexican importers, the world economic crisis has affected both ends of the spectrum.

“Mexican retailers are buying much less products because they are much more expensive for them,” said Lynn Wilcox, president of Floyd Wilcox & Sons Inc., Rexburg, Idaho.

“Some importers purchased products at the end of December and paid for them at the end of February,” Wilcox said. “The peso devaluated greatly between December and February, so they actually lost money paying us.”

Juan Carlos Moreira, representative for the Wenatchee-based Washington Apple Commission, said every week the dollar goes up. Retailers are paying more pesos for the dollar, and when it comes time to stock up, many of them don’t have the money to purchase more products.

The big buzz word at ANTAD was definitely the economy and how it has affected many businesses.

“The economy is something everyone talks about here,” said Jerry Hongola, sales manager for The HMC Group, Kingsburg, Calif. “It’s the third question you ask everyone once you start talking to them here. ‘Oh, by the way, how’s the economy?’”

The company, which sources plums, nectarines and peaches to Mexico, is expected to ship less fruit this year.

“You’ve got to be frank about it — peaches, plums and nectarines are a luxury item,” Hongola said.

Luis Moreno, president of Cuernavaca-based Grupo PM, a company that represents more than a dozen U.S. produce associations in Mexico (including the Idaho Potato Commission, the California Strawberry Commission and the National Watermelon Promotion Board), said pear sales are expected to go down approximately 20% from the previous year.

According to the U.S. Department of Agriculture’s Foreign Agricultural Service, the value of U.S. pear exports to Mexico was $72.3 million in 2008. In January, according to the most recent data available, the value of exports dropped 13% in comparison to January 2007.

“This greatly affects American pear growers because their sales are down and markets get smaller as well,” Moreno said.

Moreno said he doesn’t know what the market’s reaction will be for other commodities, mainly because their season begins in the summertime.

Most importers and exporters agree that in order for sales to level out, the value of the peso must stabilize.

“We hope the Mexican currency stabilizes at 14 pesos per dollar,” Moreno said.

“Once it does, retailers will regain optimism. There is a lot of nervousness going on, and on top of that consumer purchasing power is being hampered as well,” he said.

Gordon Smith, manager for international marketing programs for the California Tree Fruit agreement, Reedley, Calif., said the most important thing right now is for the Mexican currency to show signs of stability.

“It’s the uncertainty that is causing issues for trade now,” Smith said. “If we can stabilize it at 15 pesos per dollar and foresee that in six months, then we can make appropriate business decisions.”

Some U.S. exporters are faring better than expected.

“What I find amazing is, despite the fact that over the last six months the peso has devalued more than 40% against the U.S. dollar, our shipments to Mexico have only gone down about 6%,” said Rebecca Baerveldt, export marketing manager for the Washington Apple Commission, Wenatchee, Wash.

“People are still buying (apples),” Baerveldt said. “Instead of a kilo, they’ll buy half a kilo.”

Prior to exhibiting at ANTAD, Baerveldt took a promotional trip to Mexico’s largest cities, as well as to other important markets, and found that in Cancun and Puerto Vallarta, there are retailers that carry large volumes of fruits and vegetables.

“We will be expanding our promotional program in Mexico because we found good opportunities there to serve some of the larger retailers in that area,” Baerveldt said. “It’s a great opportunity for us.”

Teresa Baggarley, international program coordinator for the Washington State Fruit Commission, Yakima, said she hopes that Mexican consumers are not affected too much by the devaluation.

“We cater to middle- to upper-income consumers in Mexico City, Guadalajara and Monterrey. Our promotion strategy is servicing key retail stores, which have the demographics to purchase cherries,” Baggarley said.

Despite economic hardships, Mexico still represents a strong market for U.S. exporters and trade associations.

“What’s important for anyone going to a market is to maintain the presence in that market,” Tucker said. “It may not be a good year, but it’s important to be visible and work with the market as much as possible.”

“Mexico is a good market for us and we plan to continue to be down here,” Hongola said.

Economic woes affect U.S. exports to Mexico
Ramon Leal, national sales manager for Del Campo y Asociados S.A. de C.V., Culiacan, Mexico, says in times of economic turmoil it is important to be present in retail shows like ANTAD.

Jose Escobedo