Food Inflation Eases Amid Climate, Trade Pressures

Mexico’s headline inflation closed 2025 at 3.69%, its lowest level since 2020, supported by declining fruit and vegetable prices. Meanwhile, rainfall linked to cold fronts could affect up to 40% of coffee production in Guerrero’s mountainous regions.

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Mexico Inflation Hits Five-Year Low in 2025

Mexico’s inflation slowed more than expected at the end of 2025, with headline inflation closing the year at 3.69% year-on-year, its lowest level since 2020, largely driven by falling fruit and vegetable prices that eased non-core inflation. Despite this moderation, food prices and the basic consumption basket continued to rise, with notable increases in items such as coffee, beef products and certain vegetables, and the cost of basic needs climbing in both urban and rural areas. Looking ahead to 2026, analysts warn inflation could rebound due to higher taxes on beverages and cigarettes, as well as trade-related pressures, including tariffs imposed by the United States and potential impacts from imports from non-free trade agreement countries.

Heavy Rains Threaten Coffee Harvest in Guerrero

Recent rainfall linked to cold fronts could affect between 30% and 40% of the coffee harvest in Guerrero’s mountainous region, raising concerns about significant income losses for small-scale producers, according to local farmers. Experts warn that excess moisture can trigger plant diseases, reduce flowering and lower yields, compounding long-standing challenges such as aging plantations, limited connectivity, and the lack of generational renewal in the sector. Despite these risks, higher government-backed prices under the Coffee for Well-Being program and state efforts to support commercialization offer some relief for producers, as Guerrero remains Mexico’s fifth-largest coffee-producing state.

Advancing Consumption, Shielding National Production: CONPAPA

CONPAPA highlighted its role in defending Mexico’s potato sector through strict phytosanitary controls, including a landmark suspension of US fresh potato imports and ongoing efforts to ensure reciprocity under USMCA, while working to open export access to the US market starting in 2026. The organization is also focused on boosting domestic demand through its APAPACHATE campaign, which aims to raise per capita potato consumption by 20% to stabilize prices and support small and medium-sized producers. At the same time, CONPAPA is strengthening sustainability and climate resilience through water-efficient technologies, biological inputs and training programs, while prioritizing the protection of Mexico’s phytosanitary system and food sovereignty ahead of the 2026 USMCA review.

Food Imports and the Illusion of Self-Sufficiency

Food self-sufficiency is increasingly defined by dependency, and globally many countries, both poor and wealthy, rely heavily on food imports due to geography, climate constraints, conflict, or strategic economic choices, a vulnerability amplified by geopolitical shocks and climate change. In Mexico, this dependency is stark: while the country excels in high-value agricultural exports, it faces growing reliance on imported staples like yellow corn, worsened by droughts, erratic rainfall, and rising temperatures that threaten yields, prices, and food security. President Claudia Sheinbaum’s Plan Mexico seeks to reduce this vulnerability through import substitution, climate adaptation, water modernization, and smallholder support, but structural challenges remain as climate risks and export-driven models continue to strain national food sovereignty.

The Year in Agribusiness: Mexico’s Agrifood Sector in 2025

In 2025, Mexico’s agrifood sector faced a convergence of climate stress, trade disputes, and regulatory shifts, as prolonged droughts reduced grain production to multi-decade lows while tariffs, antidumping measures, and sanitary restrictions disrupted exports to the United States. The government responded with price support schemes, irrigation modernization, strategic grain reserve proposals, and stricter sanitary controls, while also pushing to diversify trade ties with partners such as Canada and Japan to reduce dependence on the US market. At the same time, Mexico advanced a strong public health and food policy agenda, tightening regulations on junk food, sugary beverages, GM corn, and food additives, underscoring a broader strategy focused on food security, health, and long-term sustainability.