Mexico’s Food Basket Costs Rise Faster in Urban Areas

In August, the cost of Mexico’s basic food basket registered an annual increase of 4.1% in urban areas and 2.8% in rural areas, according to INEGI. The rise was driven mainly by beef products, pasteurized milk, and food and beverages consumed outside the home.

INEGI reported that covering the food basket required MX$2,452.05 (US$132.7) per person in urban areas and MX$1,850.73 in rural areas. These amounts highlight the gap between household income and the cost of food and nonfood baskets, indicating that many households face challenges in meeting basic needs.

The general annual inflation rate stood at 3.6% in August, down 1.4% points from the same month in 2024, and close to the 3.2% recorded in August 2019. Moreover, monthly inflation fell 0.2% after remaining at 0.3% from January to July.

Extreme poverty lines by income reflected the difference between rural and urban contexts. Compared to August 2024, the variation declined by 3.2% in rural areas and 1.9% in urban areas, standing at 5.9% and 6%, respectively.

Several factors contributed to higher food costs, including increased production costs from feed, fertilizers, and energy; rising logistics and transportation expenses linked to fuel; and higher demand for animal products and dairy. In rural areas, access to lower-cost alternatives is also limited, magnifying the effect of rising prices.

Economists warn that reviewing agricultural support policies, boosting local production, and improving logistics chains are needed to curb food costs. They also point to expanding social aid and subsidies for low-income households as potential measures to ease the impact of higher food basket prices.