Mexico Signs National Corn Tortilla Agreement

The Mexican government signed the National Corn Tortilla Agreement with representatives from producer organizations. The agreement aims to stabilize tortilla prices by gradually reducing them by 5% over the next six months, with a target of reaching a 10% reduction by 2030.

The initiative was signed on Thursday, June 12 at the National Palace, in the presence of President Claudia Sheinbaum. Julio Berdagué, Minister of Agriculture (SADER), emphasized that the agreement is part of the efforts to fulfill Commitment 62 made by the President, focused on ensuring the constitutional right of all Mexicans to nutritious, sufficient, and high-quality food.

President Sheinbaum highlighted that one of the goals of the project is to reduce the number of intermediaries between corn sellers and processors, and to promote direct agreements between producers and processors. In this regard, through the Food for Well-Being program, up to 25,000t of white corn will be allocated to supply tortilla shops that join the agreement, sourced from Food for Well-Being Collection Centers. This corn will be sold on a cash basis at the same price as in Well-Being Stores, which currently stands at MX$6,000/t.

The Federal Consumer Protection Office (PROFECO) will be in charge of collecting data on tortilla sales prices, as well as ensuring that measuring instruments like scales used in sales are properly calibrated. Nationally, tortilla prices range from MX$18/kg to MX$35/kg. Alejandro Habib Nicolás, Liaison for Productive Sectors, Ministry of Economy, noted that the average price in the metropolitan area is about MX$22/kg, while the national average stands at MX$23/kg.

The program also includes the provision of up to MX$500 million in credit lines for working capital, equipment renewal and modernization, and facility improvements for tortilla shops that join the agreement. These funds will be made available through FIRA (Trust Funds for Rural Development). The Ministry of Labor and Social Welfare (STPS) will also play a role by incorporating participating tortilla shops into the Youth Building the Future program. These shops will serve as training centers for 500 young people aged 18 to 29 who are not studying or working, to be trained in tortilla and dough production activities.

To ensure monthly follow-up, a committee will be formed with representatives from the Mexican Government, the production sector, and the industry, including: Grupo MINSA, Grupo GRUMA, Harimasa, the Regional Chamber of the Tortilla Industry (covering Puebla, Tlaxcala, and Veracruz), the Tortilla Governing Council, the National Union of Dough and Tortilla Manufacturers, the State Corn Product System Committee in Michoacan, the Confederation of Agricultural Associations of Sinaloa, producers from Guasave, Sinaloa, the Independent Farmers’ Central of Sinaloa, and the State Corn Product System Committee in Guanajuato.

The agreement is not without its challenges, however. Homero López, Head, National Tortilla Council (CNT), pointed out that the government's goals will not be met unless all 110,000 tortilla shops and mills in the country participate. “This is not a national agreement; only 20 to 30 tortilla shops across the country are involved,” he said.

On another note, López stressed that a 10% price reduction is not feasible unless gas prices remain stable, bonuses are not increased, working hours are not reduced from 48 to 40 hours, and no other input costs rise. Additionally, social security for workers must be taken into account, as well as the issue of informal tortilla shops, which result in unfair competition.

The businessman added that the goal of reducing tortilla prices by 5% is achievable only if all stakeholders, including mills, flour producers, and tortilla shops, participate, as each operates under different market conditions. “The flour industry, which holds 20–25% of the market, can adjust flour prices, but it cannot guarantee the final price of tortillas without the collaboration of the rest,” he stated.