Best Prospect sector includes market overview and trade data.
Last Published: 9/16/2017

Overview

With a growing population, an expanding economy, and an increasingly market-oriented agricultural sector, Mexico remained the United States’ third largest agricultural trading partner in 2016, accounting for nearly 12 percent of total American agricultural exports and 53 percent of Mexico’s total agricultural imports. The United States remains Mexico’s principal agricultural trading partner, receiving almost 80 percent of Mexico’s total exports. The balance of trade now favors Mexico.   Specifically, Mexico exported a record USD 23.8 billion worth of agricultural products to the U.S. in 2016.   Mexican demand for imported agricultural products dropped from 2015 numbers due primarily to the strong dollar. Total agricultural exports from the United States were valued at USD 18.7 billion. The United States’ overall market share is not likely to change as the geographic and tariff advantages that are enjoyed in Mexico are likely to continue to make the United States the best import option for most major agricultural goods. That said, Mexico is looking for alternate sources of supply given the charged political climate.

Since 1994, when NAFTA entered into effect, bilateral agricultural trade between the United States and Mexico has expanded almost fivefold. At the same time, agricultural exports from the United States to Mexico have grown at similar rates, reflecting the mutually beneficial outcomes NAFTA has provided.

Table 1 Major Agricultural Exports from the United States to Mexico in 2016
(Figures in USD millions)
 
ProductValue
Corn2,553.0
Soybeans1,371.0
Dairy products1,221.70
Poultry meat & products941.30
Wheat528.20
Soybean meal819.50
Sugar/sweeteners614
Fresh Fruit510
Processed fruit & vegetables421.70
Rice256.30
Snack foods291.90
Tree Nuts262.10
Eggs & products173.20
Wine & beer143.4
Coarse grains (ex. Corn)153.5
Source: U.S. Foreign Agricultural Service’s Global Agricultural Trade System (BICO Report)

Table 2 Dairy Products* Market Overview

(Figures in thousands of metric tons)
 
Indicator201520162017p
Total Local
Production
12,585 12,80112,992
Total Domestic
Consumption
13,01413,26713,467
Total U.S. Exports
to Mexico
466522545
Total U.S. Imports
from Mexico
375660
*Aggregate of all dairy products
 p = Projected data
Source: Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database


Dairy consumption in Mexico is predicted to increase by 8 percent in 2017, with fluid milk being one of the top commodities. The shift toward specialized dairy products, such as lactose-free, high calcium, and weight-control goods, continues. As a result, increasing amounts of fluid milk and non-fat dry milk are being directed toward processing use. Although the domestic industry has experienced steady production growth, Mexico is a milk production-deficit nation and will continue to be an attractive market for dairy and dairy product exporters from the United States the Government of Mexico has a subsidized milk program for the neediest segment of their population; Liconsa, a government owned and operated subsidized milk program, has eleven thousand outlets across Mexico, serving more than six million of the neediest consumers.

Table 3 Beef & Pork Meat Market Overview
(Figures in thousands of metric tons CWE*)
 
Indicator201520162017P
Total Local
Production
3,1733,2553,330
Total Domestic
Consumption
3,9734,0654,173
Total U.S. Exports
to Mexico
9751,0271,086
Total U.S. Imports
from Mexico
218250279
*Carcass-Weight Equivalent (CWE)
p= Projected data
Source: Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database


Beef production is estimated at 1.9 mm (carcass weight) and consumption is estimated at 1.8 mm. Medium- and low-income populations continues consuming beef in a thin-muscle beef cut known as “bistec”, which is significantly lower priced than fine cuts. High-income consumers will continue to seek high-valued beef cuts (for example, at Brazilian or Argentinian style steak houses), a practice that has remained stable for years. Consumption has remained relatively constant, as poultry remains the overall preferred animal protein, a preference based principally on price that is also favoring increased pork demand.

The United States has historically held more than 80 percent of the beef import market, followed at a distance by Canada. Beef imported from the United States is both directly consumed, and used by Mexican processors for specialty cuts (i.e., high-value cuts). In October of 2016, Mexico removed restrictions on Canadian beef imports due to Bovine Spongiform Encephalopathy (BSE).

Pork production in Mexico is expected to rise; this growth is supported by improved genetics leading to higher feed conversion, but is constrained by continued biosecurity concerns, as well as competition from imports. Slaughter is expected to continue to rise, particularly as Mexico seeks to both meet domestic demand, and export greater quantities of red meat. Consumption is forecast at a record 2.36 million tons in 2017, principally due to anticipated low prices, particularly for imports from the United States. Per capita consumption is expected to increase, fueled by availability and affordable prices. Pork is consumed daily in a variety of dishes, including “tacos al pastor,” a traditional taco that includes pork and pineapple. Currently, pork remains a lower cost alternative to beef but competes with poultry meat as an affordable source of animal protein both at the household and commercial level. In particular, meat processors often make production decisions based on the relative price ratio of pork and other meat for products such as sausage and ham.

Table 4 Poultry* Meat Market Overview
(Figures in thousands of metric tons CWE**)
 
Indicator201520162017p
Total Local
Production
3,1753,2703,335
Total Domestic
Consumption
3,9604,0714,203
Total U.S. Exports
to Mexico
745716850
Total U.S. Imports
from Mexico
556
*Includes chicken and turkey
**Carcass-Weight Equivalent (CWE)
p = Projected data
Source: Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database


In 2017, the United States will remain the main supplier of poultry exports to Mexico, which represents a USD 1 billion export market for American suppliers. Although consumption growth in Mexico is expected to slow in the coming years, Mexican poultry demand will continue growing in 2017, as it continues to be consumers’ preferred option among higher priced sources of protein. Despite imports of poultry products being increasingly diversified, the top two products imported by Mexico are fresh or chilled mechanically deboned/separated chicken meat and chilled or frozen chicken leg quarters.

Currently, Mexico does not impose anti-dumping duties on chicken leg quarters from the United States due to the state of Mexican supply, which contracted because of an outbreak of highly pathogenic avian influenza (HPAI). The HPAI outbreak also slowed Mexican poultry exports, as foreign markets refuse to accept Mexican poultry and poultry products.

Table 5 Soybean Market Overview
(Figures in thousands of metric tons)    
 
Indicator201520162017p
Total Local
Production
330510676
Total Domestic
Consumption
4,4464,7004,890
Total U.S. Exports
to Mexico
4,1264,2004,410
Total U.S. Imports
from Mexico
000
p = Projected data
Source: Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database

The United States serves as the primary exporter and supplier of soybeans to Mexico. As a result of a government soybean support program, Mexican soybean production is expected to increase over the medium term, although Mexico will continue to import the vast majority of soybeans needed for domestic consumption. Soybean oil and meal production should also rise slightly as a consequence. Moreover, due to an upswing in feed demand, domestic soybean consumption will increase moderately. The forecast for soybean and soybean meal imports for 2017 is approximately five percent greater than last year, given a growing demand from the domestic poultry, aquaculture and pork feed sectors, as well as continued population growth.

Table 6 Fresh Fruit* Market Overview

(Figures in thousands of metric tons)
Indicator201520162017p
Total Local
Production
1,0571,0351,035
Total Domestic
Consumption
1,1521,1111,104
Total U.S. Exports
to Mexico
361333327
Total U.S. Imports
from Mexico
165 156157
*Includes apples, pears, and grapes
p = Projected data
Source: Foreign Agricultural Service's Production, Supply and Distribution (PSD) online database

The United States is the largest supplier of apples, pears, and grapes to the Mexican market, and this trend is projected to continue.    Apple import levels depend heavily on the peso to dollar exchange rate; nonetheless, the apple industry in the United States has successfully marketed American apples through in-store promotions retaining its dominant market position. The domestic supply of pears is stocked through imports, primarily from the United States.  Wholesale markets remain the most important fruit distribution channel for U.S. pears. Pear consumption for MY 2016/17 is expected to decrease compared to MY 2015/16, due to expected lower consumer purchasing power and expected higher import prices.

Mexico is an important market for grapes from the United States, Chile, and, more recently, Peru. The volume of Mexican grapes on the local market depends on export volumes, as producers tend to supply the international market before the domestic market.  Promotional efforts have increased consumption, leading to greater domestic production and imports, of which 70 percent are of U.S. origin.
 

Leading Sub-Sectors

In 2016, Mexico imported more than USD 18 billion worth of agricultural, fishery, and forestry products from the United States, representing a decrease from 2015 numbers. U.S. exports are expected to increase slightly in 2017.

The leading export categories include: coarse grains, red meat, soybeans, dairy products, poultry meat, processed fruits and vegetables, snack foods, legumes and wood products.
 

Opportunities

With the rising trend in healthier eating, demand for organic food products in Mexico has grown in recent years because Mexican consumers perceive organic foods as being healthier than conventional foods.  Presently, Mexico has some of the world’s highest indexes for obesity and diabetes, especially among children. The Mexican Government has made it a priority to reverse this through educational campaigns, new processed food labeling norms and food nutrition laws that target school children.  As a result, a growing number of Mexican consumers are pursuing healthier lifestyles, which include better eating habits, making Mexico an attractive market for American exporters of healthy and/or organic food products.

The developing wine culture in Mexico creates an attractive market for U.S. wine exporters. Expanding consumer interest in wine and a thriving middle class have contributed to the expansion of this industry.  Market analysts estimate an annual growth rate of 12 percent in consumption in the coming years. Furthermore, analysts rank Mexico among the countries with the fastest growing wine consumption in the world.

Mexico’s transition to more wine consumption over other alcoholic beverages, increased interest among different consumer sectors (i.e., women and young adults), and growing interest among consumers in trying novel wines has also led to new opportunities for wine exports from the United States.

Table 7 Major Agricultural Exports from the United States to Mexico
(Figures in USD millions)
 
Product201420152016
Bulk Products   
Corn2,461.82,199.02,553.0
Soybeans1,831.11,554.41,371.0
Wheat858.6675.0528.2
Cotton420.9330.3333.5
Rice344.0301.3256.3
Intermediate
Products
   
Sugar,
sweeteners,
bev. bases
644.2654.1614.0
Soybean meal800.9775.6819.5
Distillers grains384.0345.7357.1
Animal fats312.3260.8231.7
Planting seeds248.1237.1298.0
Consumer
Oriented
Products
   
Dairy products1,646.71,346.71,221.7
Pork & pork
products
1,530.71,326.01,278.5
Poultry meat &
products*
1,231.81,114.6941.3
Beef & beef
products
1,144.81,111.41,018.1
Prepared food693.1694.0727.4
Agricultural
Related
Products
   
Forest products   
Ethanol
(non-bev.)
70.969.957.6
Fish products51.350.363.4
Distilled spirits48.443.747.3
Biodiesel
(B100 equiv.)
0.57.317.6
Total   
Agricultural
products
19,489.918,005.117,656.1
Agricultural &
related products
20,309.718,878.718,546.5

Web Resources

U.S. Department of Agriculture’s Foreign Agricultural Service                                                                            U.S. Department of Agriculture FAS website
USDA Foreign Agricultural Service's Global
Agricultural Trade
USDA Foreign Agricultural Service's Global Agricultural Trade website
System (GATS) USDA Foreign Agricultural Service's
Production, Supply and Distribution (PSD) online database
 
PSD database website
USDA Global Agriculture Information
Network (GAIN)                                      
USDA GAIN website
 

Events

Confitexpo (Confectionary), August 1-4, 2017. Guadalajara, Jalisco
Confitexpo website  

ABASTUR (Hospitality), August 29 -September 1, 2017. Mexico City, Mexico
Abastur website

Agro Baja (Agriculture and Fishing), March 1 - 3 2018, Mexicali, BC
Agrobaja website

ANTAD & Alimentaria (Retail, Food and Beverage), 6-8, March 2018.Guadalajara, Jalisco
ANTAD & Alimentaria website

ExpHoReCa (Hospitality industry), November 22 – 24, 2017.Cancun, QR
ExpHoReCa website
 
ExpoRestaurantes (Restaurants), June 28 – 30, 2017. Mexico City, Mexico
Expo Restaurantes website

For more information on Agricultural sectors in Mexico, please contact:
Agricultural Trade Office - Mexico City
Tel.: + 52 55 5080 2000 ext. 5282
E-mail:  atomexico@fas.usda.gov

Agricultural Trade Office - Monterrey
Tel.: + 52 81 8047 3232
E-mail:  atomonterrey@fas.usda.gov

Office of Agricultural Affairs – Mexico City
Tel.: + 52 55 5080 2532
E-mail:  agmexico@fas.usda.gov


 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Mexico Agribusiness Trade Development and Promotion