The agriculture sector is large, diversified, and heavily integrated with the United States, making it a best prospect industry sector for U.S. companies in Mexico.

Overview

Mexico is the United States’ third-largest agricultural trading partner. In 2021, U.S. agricultural and related product exports to Mexico totaled USD 26 billion. The United States has been able to maintain its number one position in Mexico´s agricultural imports with nearly 70 percent market share. The United States remains Mexico’s principal agricultural trading partner, receiving over USD 39 billion of Mexico’s total agricultural exports. Overall, U.S. market share in Mexico has remained high, as geographic advantages continue to make the United States the best supplier for most major agricultural goods.

However, Mexico actively looks for alternate sources of supply given bilateral trade uncertainties. In recent years, competition has emerged from producers in the European Union, South America, and Asia. Additionally, starting with the inauguration of President Andrés Manuel López Obrador’s administration in December 2018, Mexico shifted its focus domestically, promoting programs and incentives to enhance both local small-scale production and consumption with a goal of becoming self-sufficient in core agricultural products, such as corn and milk.

Furthermore, in May 2022, the Government of Mexico announced a program to combat food price inflation and scarcity titled “Paquete Contra la Inflacion y la Carestia (PACIC).” Along with PACIC, President López Obrador announced a plan to maintain “fair prices” for the basic food basket, through a voluntary agreement with the private sector, without the use of mandatory price controls. The PACIC plan calls for a six-month suspension of import tariffs on 21 staple items and five basic commodities for food processing. The program also includes steps to support increased production of grains by subsistence farmers, including bolstering fertilizer production for use by small producers. Also, under PACIC, the enforcement date of the Carta Porte tax on transport of goods within Mexico will be delayed until October of 2022.

Leading Sub-Sectors

The United States enjoys a commanding market share for several sub-sectors. Mexico is the top destination for U.S. agricultural exports of corn, dairy products, poultry meat (excluding eggs), sugar and sweeteners, milled grains, and distiller’s grains. It is the second or third-largest market for more than 20 other key product groups such as soybeans, pork, beef, wheat, oilseed meals, fresh fruit, and many processed foods or beverages. Below are summaries of a few of these sub-sectors of the agricultural market in Mexico. Additional information on each of these topics (as well as other agricultural sectors) is available on the U.S. Department of Agriculture’s (USDA) Global Agricultural Information Network (GAIN).

Note: Not all sub-categories of products are listed here. Go to the data source to see the full table.

Data Source: GATS Report Mexico Soybean Market Overview
(Figures in thousands of metric tons)

Source: Foreign Agricultural Service’s Production, Supply and Distribution (PSD) online database

The United States continues to serve as the main exporter and supplier of soybeans to Mexico. Growth in Mexico’s livestock sector has driven growth in demand for U.S. soybeans in recent years. Soybeans are generally imported and crushed in Mexico for use as edible oil for human consumption and soy meal for livestock feed. We expect growth of approximately 2.5 percent in the oilseed meal and 1.5 percent in the oil sector over the coming year, driven by continued meal demand from the poultry and livestock sectors. Mexican oilseed crushers are expected to continue increasing oil production (3.1 percent) to keep up with population growth and meal demand. Given the continued demand for soybeans for crushing, steady growth in imports is likely with an expected growth of 2.7 percent.

Source: Foreign Agricultural Service’s Production, Supply, and Distribution (PSD) online database and U.S. Census Data

Source: Foreign Agricultural Service’s Production, Supply and Distribution (PSD) online database, and U.S. Census Data.

Mexico continues to be an excellent market for U.S. grains exports, despite also being a producer of these grains. Mexico was the top export destination for wheat, and rice by volume in 2021. Grains imports in Mexico continue steady growth trends, with expansion in the animal feed sector driving growth for feed grains (particularly corn) rather than for food grains. In 2022, imports are expected to continue their modest growth to meet growing demand for feed and food grains. The United States is poised to remain Mexico’s principal supplier due to logistical advantages and existing business relationships.

Mexico Dairy Products Overview

Mexico is the number one export market for U.S. dairy products. Although Mexico’s domestic industry has experienced production growth, the country is a dairy production-deficit nation and will continue to be an attractive market for U.S. dairy and dairy product exporters. The dairy processing industry competes for inputs and uses dairy imports to close the gap between demand and production. For example, about 97 percent of the skim milk powder consumed in Mexico is imported from the United States. Import diversification is on the horizon given the Mexico-European Union Free Trade Agreement modernization and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). The United States–Mexico–Canada Agreement (USMCA) was signed in November 2018, was ratified by the Mexican Government in 2019, and entered into force on July 1, 2020. For more information on the USMCA, as well as the transition from North American Free Trade Agreement provisions, please refer to the Office of United States Trade Representative website.

The Government of Mexico has a subsidized milk program, managed by a government agency known as Liconsa, for the neediest segment of its population. This government-owned and operated subsidized milk program has 11,000 outlets across Mexico, serving more than six million of the neediest consumers.

The Mexican dairy industry is working on changing consumer perception of dairy products by encouraging domestic consumption of a wider range of dairy products beyond only fluid milk. These efforts are characterized not only by advertising campaigns but also in development and innovation of new dairy products appealing to different sectors of the society.

Mexico Poultry and Egg Market Overview

For 2022, continued production growth is expected in the poultry and egg sectors, building on recent expansion and vertical integration. Mexico closed 2021 with steady growth of poultry and egg production. Chicken meat is still the preferred animal protein for domestic consumption due to its lower price and versatility in Mexican cuisine. Mexico is the number one consumer of eggs in the world. Most poultry and egg imports continue to originate in the United States, while exports by Mexico are limited. Notably, a third-country tariff-rate quota for chicken meat has allowed Brazil and Chile to expand market share through breast and wing exports.

Processing Ingredients Market Overview

Mexico continues to be a growth market and one of the best opportunities globally for U.S. processing ingredients with a strong processing sector demanding an array of inputs. Despite the economic turmoil caused by the COVID-19 pandemic, the food processing industry in Mexico remains stable with low growth, as it is large and well established. It currently ranks 11th in the world and third in Latin America. According to the Mexican Association of Nationwide Retailers (ANTAD, 2020), there are 31 supermarket chains with a combined 3,435 stores. Additionally, there are 2,484 department stores and 62,377 specialized stores throughout Mexico. More than 56 percent of the retail market is covered by informal establishments (mobile street vendors and open public markets) which traditionally distribute local products. This remained the case despite the pandemic and associated lockdowns. ANTAD also reported that retail sales in supermarkets grew steadily by approximately 7.7 percent per year (2020).

However, the sector is diversifying to provide tailored products for consumers, moving away from one highly branded product line to multiple lines and niche products. Two examples include a proliferation of peanut butter types (both brands and varieties), and a number of independent craft beer companies being bought by big brands such as AMBEV and Heineken yet maintaining their independent name. Such mergers benefit the parent company, as well as the acquired brand. Also, some smaller companies branded their products a health product to take advantage of current trends and were quickly acquired by larger corporations covering mainstream distribution channels.

Mexico Fresh Fruit Market Overview

The United States is the largest supplier of apples, pears, and grapes to the Mexican market, and this trend is expected to continue. As Mexico is a price sensitive market, fruit import levels depend heavily on U.S. product prices, exchange rates, and the availability of lower cost fruits. The U.S. apple industry has retained its dominant market position by successfully marketing American apples through in-store promotions. The domestic supply of pears is supported by imports, primarily from the United States, as production in Mexico continues to decline. Wholesale markets remain the most important fruit distribution channel for U.S. pears.

Mexico is an important market for grapes from the United States, as well as from Chile and Peru. The volume of Mexican grapes on the local market depends on export volumes, as producers tend to supply the international market before the domestic market. Consumers prefer a wide selection of varieties, which has led to increased U.S. grape exports to Mexico.

Opportunities

The U.S. Foreign Agricultural Service in Mexico is happy to assist you in exploring market opportunities. Two developing areas worth mentioning are health foods and the wine market.

Before the COVID-19 pandemic, the trend of healthier eating was growing quickly and now it seems to be here to stay. Even before the pandemic the demand for organic products, alternative ingredients, and other niche food products in Mexico was growing year after year. As diseases such as obesity, hypertension and diabetes (which are very common in Mexico) are factors that can increase the severity of a COVID-19 infection, a growing number of Mexican consumers are pursuing healthier lifestyles. These changes include better eating habits, making Mexico an attractive market for American exporters of healthy and/or organic food products. There are also labeling regulations for food and beverage products that attempt to discourage calorie intake, mainly of sugar and trans fats. Due to such regulations, manufacturers had to reformulate and resize products.

The young population, highly influenced by social media, is looking for new and different products. Growing categories for this target are organic and healthy foods, craft beers, snacks, fast-food restaurants, and casual-dining restaurants.

The developing wine culture in Mexico creates an attractive market for U.S. wine exporters. Expanding consumer interest in wine in this upper-middle income country has contributed to the expansion of this industry. Mexico’s transition to more wine consumption over other alcoholic beverages, increased interest among different consumer sectors (i.e., women and young adults), and growing interest among consumers in trying novel wines has also led to new opportunities for wine exports from the United States. Additionally, the USMCA contains a chapter with non-discrimination and transparency commitments regarding the sale and distribution of alcoholic beverages and labeling and certification provisions to help avoid technical barriers in the trade of wine and distilled spirits.

For further information about best prospects for foods in Mexico, please see USDA’s country Exporter Guide. For additional information about specific market entry sectors, see the Retail Foods, Food Processing Ingredients, or Food Service reports. USDA provides many additional useful reports via its Global Agricultural Information Network.

Resources

U.S. Department of Agriculture (USDA)

USDA FAS

USDA FAS Production, Supply and Distribution online data base

USDA Global Agriculture Information Network

Events

• ABASTUR (Hospitality), August 31 - September 2, 2022, Mexico City
• ANTAD & Alimentaria (Retail, Food, and Beverage), May 2023, Guadalajara, Jalisco
• Expo Restaurantes (Restaurants), September 28–30, 2022, Mexico City
• Food Tech Summit, September 28-29, 2022, Mexico City
• Cerveza Mexico (Craft beer), October 21 – 23, 2022, Mexico City

Contacts

For more information on agricultural sectors in Mexico, please visit our website or contact USDA’s Mexico offices:

Agricultural Trade Office—Mexico City

Tel.: + 52 55 5080 2000 ext. 5282

AgMexico@usda.gov

 

Agricultural Trade Office—Monterrey

Tel.: + 52 81 8047 3232

AgMexico@usda.gov

 

Office of Agricultural Affairs—Mexico City

Tel.: + 52 55 5080 2532

AgMexico@usda.gov