The Year in Agribusiness: Mexico’s Agrifood Sector in 2024

In 2024, Mexico’s agrifood sector was marked by efforts to strengthen food security, navigate economic pressures, and adapt to climate challenges. While inflation and crop shortages posed significant hurdles, Mexico also made strides in securing its position on the global stage through strategic trade agreements. 

Controlling inflation in the agrifood sector remains a priority for the Sheinbaum administration. In May, INEGI reported a 5.99% increase in food prices, outpacing general inflation by 1.3%. By October, the annual inflation rate had risen to 4.76%, with notable price hikes for items such as nopales, papaya, green tomatoes, zucchini, and tomatoes, ranging from 15% to 35%. Processed foods, beverages, and tobacco saw a 3.81% year-on-year increase, while prepared food prices rose by 4.96%.

A study by market research firm Kantar revealed that rising food prices have influenced Mexican families to cook at home more often, with 53% of respondents reporting increased meal preparation to save money. Meal preparation instances rose by 14.7% between 2023 and 2024, equivalent to 23 million additional weekly occurrences in regions such as the Valley of Mexico, Guadalajara, Monterrey, and Merida.

The National Tortilla Council (CNT) reported a 60.9% increase in tortilla prices during López Obrador’s administration. In 2018, the average price per kilogram was MX$14.33 (US$0.7); by May 2024, it had surged to MX$23.05. Homero López, President, CNT, attributed this to rising input costs driven by external pressures such as the COVID-19 pandemic, the Russia-Ukraine war, insecurity, and unfavorable weather conditions for corn farming.

To address food inflation, the government announced the continuation of the Anti-Inflation and Scarcity Package (PACIC), including new food items and support for tortilla shops. As part of the National Corn and Tortilla Plan, SADER aims to foster agreements between producers to gradually reduce tortilla prices. 

Mexico’s new administration has also pledged to continue former President López Obrador’s policies supporting small rural producers while prioritizing sustainability and food sovereignty. In September, the government announced the creation of Alimentos para el Bienestar (Food for Well-Being), merging Seguridad Alimentaria Mexicana (SEGALMEX) and Diconsa. This new entity aims to maintain guaranteed prices for staple crops while centralizing operations to enhance efficiency and resource management.

Diconsa stores will now operate under the name Tiendas del Bienestar (Shops for Well-Being), connecting small agricultural producers directly with consumers to strengthen the link between production and commercialization. These shops will focus on key products such as coffee, beans, cocoa, corn, and honey. The federal government also launched a Bienestar coffee brand to support farmers, offering roasted, ground, and soluble presentations in 24,516 stores nationwide.

Climate Challenges Remain 

While dealing with inflation pressures, drought continued to severely impact agriculture in Mexico, with 65% of municipalities experiencing varying levels of drought at the start of the year. This affected staple crops such as corn and beans. 

According to the Agricultural Markets Consulting Group (GCMA), corn production in 2024 is projected to reach 23.3Mt, its lowest level since 2014, with white corn accounting for 20.3Mt, the smallest output in 12 years. Bean production declined by 56% in 2023, reaching 723,642t, and dropped further to 688,000t for the October 2023–September 2024 cycle.

Cilantro production also suffered, with water scarcity and hailstorms affecting over 200ha and aphid infestations destroying 1,000ha in Puebla and Hidalgo. These factors drove cilantro prices to nearly MX$500 in Mexico City in June, straining local vendors and taquerías.

The livestock sector faced similar challenges. In Sonora, cattle numbers dropped from 1.2 million to 750,000 in 2024 due to drought. Industry leaders emphasized adopting advanced farming practices and improving water harvesting and storage.

To address these issues, the government introduced the National Water Plan 2024-2030. This strategy includes regulating water concessions, modernizing irrigation systems, enforcing water treatment standards for businesses, and creating state-level master plans to address water stress. The plan prioritizes directing first-use water to reservoirs for domestic consumption, as it is estimated that agricultural activities consume 76% of available water, while only 15% is allocated for domestic use. Meanwhile, a significant portion of water used in cities is planned to be treated and then repurposed for agricultural and mining activities. 

Trade: Challenges and Opportunities

Given crop shortages caused by water scarcity, the country was forced to rely on imports to meet domestic food demand. In 1H24, bean imports totaled 232,913t, a 143% increase compared to January to June of the previous year. Regarding corn, Mexico imported 19.6Mt in 2023, and GCMA projects this figure will increase by approximately 21% in 2024, reaching 23.9Mt.

In 1Q24, wheat acquisitions grew by 4.2%, while soybean oil purchases rose significantly, with volumes increasing by 263%. Overall, during this period, Mexico's grain and oilseed imports rose to 16.5Mt, reflecting a 20.4% year-on-year increase, as reported by GCMA. The main exporting countries were the United States, Canada, Argentina, China, Guatemala, and Spain.

The United States remained Mexico’s primary trading partner, with agri-food imports from the northern country totaling US$28.23 billion. Key imports included corn, soybeans, pork, milk, wheat, poultry, fructose, beef, and cheese.

Overall, Mexico’s agri-food trade balance registered a surplus of US$5.7 billion in 1H24, marking an 11.15% increase compared to the same period in 2023. Vegetables, beverages, and fruits were the leading export categories, accounting for 62% of total exports, with each contributing 22%, 22%, and 18%, respectively. The highest export values were observed in beer with US$3.4 billion, tequila and mezcal with US$2.1 billion, avocados with US$1.5 billion, fresh or refrigerated tomatoes with US$1.5 billion, fresh strawberries and raspberries with US$1.2 billion, and bakery products with US$1.1 billion. The country also maintained its position as the leading exporter of agri-food products to the United States, reaching US$47.8 billion by September 2024. Beer, tequila, avocados, and berries were the top contributors in exports to the United States.

Despite strong trade ties, challenges arose. In June, the USDA suspended avocado imports from Mexico following security incidents in Michoacan. The issue was resolved within 10 days through a new security model. Furthermore, live cattle exports were briefly paused in November due to a screwworm case in Chiapas but resumed after bilateral agreements in December.

Regarding corn, Julio Berdagué, Minister of Agriculture, emphasized the importance of maintaining self-sufficiency in white corn for food consumption while scaling back efforts to reduce yellow corn imports, primarily sourced from the United States. Former president López Obrador sought to reduce yellow corn imports, boost local production, and limit genetically modified (GM) corn use, sparking a trade dispute with the United States. In November, Economy Minister Marcelo Ebrard reported that preliminary findings from the dispute panel indicated Mexico might lose the case. In response, President Sheinbaum proposed a constitutional amendment to ban the genetic modification of domestically grown white corn.

Challenges remain with president-elect Donald Trump’s proposal to impose a 25% tariff on goods from Mexico and Canada, which could result in product shortages for US consumers, particularly fresh food. Additionally, threats of mass deportations targeting undocumented immigrants could severely disrupt the US agriculture industry. Nevertheless, economists emphasize that tariffs on food imports could create a ripple effect, causing financial and operational disruptions in US supply chains, highlighting the nation’s dependence on its neighbors for food. Deportations could lead to labor shortages and higher food prices, putting significant strain on the economy.

Beyond the United States, Mexico strengthened its global trade presence through agreements with the United Arab Emirates (UAE) to boost cooperation in arid region cultivation and expand trade in poultry and shellfish, and with Chile to support small producers and facilitate complementary food supply. Additionally, SADER extended the Recognition of Equivalence in Organic Products with Canada until 2027, enhancing competitiveness and ensuring a stable organic supply. Talks with Japan also aim to expand agri-food trade, further solidifying Mexico's position in the global market.