Mexico Cuts Powdered Milk Imports to Boost Local Supply

With the goal of reducing foreign dependency and strengthening domestic production, the Mexican government plans to stop importing powdered milk from the United States. Additionally, it will improve milk processing infrastructure with new facilities in Campeche and Michoacan.

Leonel Cota, Deputy Minister of Agriculture and Rural Development (SADER), confirmed that the federal government has already ceased imports of powdered milk from California, historically one of Mexico’s key suppliers. According to data from the Observatory of Economic Complexity (OEC), Mexico imported about US$1.07 billion in powdered milk from the United States in 2024. Approximately 50,000t of powdered milk were imported annually from California at an average price of MX$80/kg (US$4.27), Cota explained.

These measures are part of President Sheinbaum’s Milk Self-Sufficiency Plan, which aims to boost Mexico’s milk production by 25% by 2030. The strategy seeks to reinforce food self-sufficiency and revive national production of both powdered and fresh milk. Currently, Mexico produces around 13 billion L of milk annually, with a target of increasing this to 15 billion L by the end of the decade.

Cota stated that Mexico has the capacity to increase its production and expects a full replacement of current imports within two years. To achieve this, the government is already purchasing fresh milk from local producers through the Milk for Well-Being program (formerly known as Liconsa), which currently operates in 15 states.

In Jalisco, the government purchases 800,000L/d at a cost of approximately MX$9.3 million. In Chihuahua, it buys 600,000L/d for about MX$7 million. Meanwhile, in Baja California Sur, an agreement was reached with a local company to produce 700,000L per month of fresh milk to avoid transporting it from Chihuahua. Direct purchases are also being made in Michoacán, Cota added.

According to Antonio Talamantes, Head of the Milk for Well-Being program, this year’s goal is to buy 720 million L, benefiting over 3,000 producers. By the end of the current administration, the plan is to purchase 1.3 billion L annually and work directly with at least 5,000 producers, representing a 125.8% increase. Talamantes also highlighted that the guaranteed price for milk has risen by 59.7% since 2018, increasing from MX$7.2/L to MX$11.5/L. However, Cota Montaño noted that no company has yet paid the official guaranteed price, although some are getting closer.

In addition to direct purchases, Cota emphasized that the government is rehabilitating and building facilities for milk pasteurization and drying. In Campeche, a pasteurization plant will require an investment of about MX$140 million and will have a capacity to process 100,000L per day. This facility will supply Campeche, Yucatan, Quintana Roo, Tabasco, and, in a second phase, Chiapas. Another project, a milk drying plant in Michoacan, is planned with a daily capacity of 250,000L, scheduled to begin operations in September 2026.

Despite the progress made, the strategy faces challenges. Jorge Esteve, President National Agricultural Council (CNA), warned that Mexico’s goal of achieving self-sufficiency in milk production could remain an aspiration if the realities of the agricultural sector are not addressed. He pointed out that most of the powdered milk consumed in Mexico comes from the United States, almost 99%, according to the US Dairy Export Council. “The reality is they produce it more cheaply because they have a different scale and structure,” Esteve said.

He stressed that this is not about dismissing the federal government’s self-sufficiency efforts but rather about being strategic in how national producers are supported. “Our land is not really suited for producing milk or grains. We like to say we will be self-sufficient in corn or milk, but the truth is, we excel at producing fruits, vegetables, citrus; that is our strength,” he stated.