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Mexico's Dairy Industry: An In-depth Analysis

Dairy Cattle and Production

In 2022, Mexico was home to approximately 4 million dairy cattle, contributing to an impressive annual milk production of about 12.5 billion liters. Both large-scale operations and smaller farms characterize the country's dairy sector, which employs modern methodologies and effective breeding practices to enhance productivity and ensure quality.

Milk Processing and Dairy Product Manufacturing

Milk processing in Mexico reached about 9 billion liters in 2022. The sector is diverse, producing a range of dairy products, including 470,000 metric tons of cheese, 100,000 metric tons of milk powder, and 60,000 metric tons of whey. This performance underscores the industry's adoption of advanced technologies to boost efficiency and product quality.

Key Enterprises in the Dairy Market

Prominent companies in Mexico's dairy market include:

• Lala Group: One of the largest dairy companies in Latin America, known for a variety of milk, cheese, and yogurt products.
• Grupo Alpura: A key player in the production of milk, cheese, and yogurt.
• Sigma Alimentos: A leading food company with a strong focus on dairy products.

Notable Dairy Farms

Several notable farms contribute significantly to Mexico's dairy production:

• Rancho San Jose: Recognized for quality milk production using advanced techniques.
• Agropecuaria El Encino: Known for its significant national milk supply capacity.
• Rancho Los Fresnos: Notable for sustainable farming practices and high yields.

Exports and Imports of Dairy Products

In 2022, Mexico's dairy export value was approximately USD 300 million. However, the country imported dairy products worth around USD 1.1 billion to meet domestic demand that surpasses local production. Key imports include milk powder, cheese, and whey from major exporting nations.

Significant Events in Mexico's Dairy Market

There have been several key developments in Mexico's dairy market:

• Implementation of innovative production techniques and increased investment in dairy infrastructure, spurring industry growth.
• Enhanced trade agreements that have streamlined import/export processes with leading dairy exporters.
• Strategic partnerships and acquisitions have widened market outreach for leading enterprises.
• A 12% increase in U.S. cheese exports to Mexico as of June 2023, highlighting Mexico’s role in the U.S. dairy export landscape.
• Mexico surpassed China as a top destination for U.S. agricultural exports, with projections indicating USD 29.9 billion by 2025.
• Challenges faced by the artisanal cheese market due to rising prices and competitive practices, alongside future plans to remove tariffs on EU cheese, poultry, and pasta.
• Significant investments announced by Nestlé to enhance Mexico’s production capacities, with Liconsa aiming to strengthen the local milk supply chain.
• Local government efforts in Chihuahua are supporting dairy farmers amid severe drought conditions through resource distribution.

Additional Insights

The industry is navigating economic instability, exacerbated by potential U.S. trade and deportation issues, posing challenges for the retail sector. Despite these hurdles, Mexico was the largest importer of U.S. dairy in 2024. A significant 25% tariff on imports from Mexico, initiated by former U.S. President Donald Trump, had a notable impact on the sector, though a temporary tariff pause has since been arranged.

Mexico's pivotal role in U.S. dairy export markets remains, marked by historic highs in cheese exports with a 17% increase year-over-year. Meanwhile, Nestlé Chile launched local production of infant formulas, emulating Mexico’s example in Latin America. Beniplast is entering the Mexican market with innovative packaging solutions, highlighting ongoing industry advancements and collaborations. Addressing the drought crisis in Durango remains a priority.

Mexico, considered the most vulnerable nation in North America to potential agricultural tariffs, continues to face challenges in sustaining its export and import balance. Grupo Lala, in particular, is strategizing to engage younger audiences and maintain its iconic status within the market. La Conchita Cooperative aims to establish a new dairy facility in Southern Mexico City, enhancing local dairy production.

Additionally, tariffs were raised on Canadian and Mexican imports, with the U.S. government implementing a 25% tariff on Mexican imports. Mexico, too, is navigating an increasingly challenging trade landscape. With agricultural exports to the U.S. totaling approximately $45 billion annually, the country’s agro-food sector is particularly vulnerable to tariffs on staple goods. Mexico is one of the countries responding to tariffs introduced by the United States.

The State Government of Aguascalientes, Mexico, has collaborated with companies Gilsa and Alilácteos to launch 'Alileche', a 100% local milk brand.

Modified: 2025/03/09