Corn, Wheat Agriculture Crisis Could Affect National Economy

Agriculture producers warned that the fall in corn and wheat prices will cause the bankruptcy of producers in commercial agriculture states, thus producing a domino effect that will affect the economy of those entities and the country as a whole.

In May, 2023, at the start of the harvest season, corn and wheat producers in the northern states of Sinaloa, Sonora and Baja California demanded government support to guarantee the price per ton of corn and wheat at MX$7,000 (US$392.4) and MX$8,000 (US$448.4) respectively. According to producers, these modifications to grain prices would make their businesses profitable and avoid bankruptcy. 

Marte Nicolás Vega, President, Confederation of Agricultural Associations of Sinaloa (CAADES), highlighted that, so far, only 1.5 of the 6 million t expected to be harvested in Sinaloa this season have been protected with a guaranteed price, so the panorama remains complicated. "We cannot stand this much longer. If the situation continues, we will go bankrupt and this will generate a domino effect in the country’s economy,” Vega said. 

Producers are asking for the federal government's support, which according to Vega is contemplated in the Rural Development Law. “In critical situations such as the current one, the government is obligated to intervene to find a solution,” Vega said. He pointed out that producers need the government to act as a mediator with buyers, to agree on a fair price for all. Vega added that this problem is not unique to Sinaloa, but affects all states where corn and wheat are grown for commercial purposes. 

In 2021, SADER reported that corn production reached 27.5 million t, which reflected a value of MX$148,601 billion (US$8.3 billion). Sinaloa was the main producer with 5.5 million t, which represented 22.1% of national production, followed by Jalisco, the State of Mexico, Guanajuato and Michoacan. 

Samuel Sarmiento, Agro-Prices Analyst, highlighted that in Sinaloa, agriculture represents 11.9% of the state’s economy, which accounts for MX$65 billion (US$3.6 billion). “Anything that happens to the countryside will impact the entire state and by extent the country. If Sinaloa does not provide the country with these 6 million t of corn, it would generate a serious problem in the economy,” he said. On the other hand, the specialist pointed out that this situation could have adverse effects on achieving food self-sufficiency, since it will inevitably impact the cost of the basic basket. “If corn producers in this region go bankrupt, next year the kilogram of tortilla will reach between MX$40 (US$2.2) and MX$45 (US$2.5), reaching MX$50 (US$2.8) in Mexico City,” Sarmiento said.