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Mexico's Dairy Industry: An In-Depth Analysis

The Mexican dairy sector stands as a vital component of the national economy, showcasing substantial production volumes and active participation in global trade. In recent years, strategic investments and modern farming methods have fueled the industry's growth.

Production and Livestock

In 2022, Mexico maintained approximately 4 million dairy cattle, contributing to an annual milk production volume of about 12.5 billion liters. These figures highlight the effectiveness and quality of the country's dairy operations, integrating both large-scale enterprises and smaller farms utilizing contemporary techniques.

Milk Processing and Product Manufacturing

Throughout 2022, Mexico's milk processing sector handled around 9 billion liters of milk. Cheese production reached 470,000 metric tons, while the production of milk powder was approximately 100,000 metric tons and whey production was about 60,000 metric tons.

Key Dairy Enterprises

• Lala Group: A dominant entity in Latin America's dairy market, offering a wide range of products, including milk, cheese, and yogurt.
• Grupo Alpura: Renowned for its high-quality production in the milk, cheese, and yogurt sectors.
• Sigma Alimentos: A major food company with a significant focus on the dairy industry, providing an extensive array of dairy products.

Notable Dairy Farms

• Rancho San Jose: Specializes in employing modern techniques to enhance milk production quality.
• Agropecuaria El Encino: Plays a crucial role in the national milk supply chain.
• Rancho Los Fresnos: Known for sustainable agriculture practices and high yield rates.

Trade: Exports and Imports

In 2022, Mexico exported dairy products valued at approximately USD 300 million, while imports reached around USD 1.1 billion due to domestic demand exceeding local production capabilities. This led to significant imports of milk powder, cheese, and whey, primarily from major exporting countries.

Significant Market Events

• Adoption of innovative production methods and infrastructure investments for industry enhancement.
• Improved trade agreements with prominent dairy-exporting nations to streamline import/export processes.
• Increase in U.S. cheese exports to Mexico, with a notable 12% rise by June 2023, reinforcing Mexico's importance in U.S. dairy markets.
• Anticipation for Mexico to surpass China as the principal U.S. agricultural export destination by 2025.
• Tariff eliminations on EU cheeses and efforts to tackle challenges within the artisanal cheese market.
• Strategic investments by Nestlé and Liconsa to enhance local milk production capacities.
• Government interventions to aid farmers in drought-stricken areas such as Chihuahua.

Economic and Trade Insights

Despite economic challenges, Mexico remains a significant importer of U.S. dairy products, a trend likely to continue into 2024. U.S. tariffs have influenced trade dynamics, but mitigation efforts have helped reduce adverse effects. Investments from companies like Nestlé demonstrate ongoing advancements within the industry. Projects like "Alileche" aim to fortify the domestic dairy sector, albeit facing obstacles such as rising crime impacting production and market disruptions during periods like Lent.

Future Projections

The Mexican government aims to boost national milk production by 15%, targeting 15 billion liters by 2030. Strategies involve distributing Holstein cattle across various states to enhance production capabilities. President Claudia Sheinbaum revealed initiatives focusing on substantial investments to elevate national dairy output.

Campeche Developments and Dairy Farmer Movements

Campeche is becoming a noteworthy player in Mexico's dairy sector, though challenges persist, such as screwworm and drought, affecting its agricultural prospects. In contrast, protests from Meoqui dairy farmers due to unmet federal support promises have led to highway blockades. Positively, the U.S. government's endorsement of a joint water agreement with Mexico underscores ongoing cooperative efforts to manage water scarcity, vital as Mexico is projected to overtake Canada as the leading U.S. agricultural export destination by 2025.

Notably, exports of nonfat dry milk/skim milk powder grew by one percent. A binational committee has been established between Mexico and the United States to address the Screwworm infestation affecting cattle in both countries. New World screwworm detected among cattle in Mexico, adding strain on resources during the bird flu outbreak. Mexico’s iAURA participated in the Saudi Food Show, garnering interest from over 100 buyers with a focus on chickpeas.

Zacatecas, one of Mexico's leading milk-producing states, struggles with limited infrastructure for collection and commercialization, impacting small and medium-sized producers.

Modified: 2025/05/16