Mexico's Dairy Industry Overview

Mexico's dairy sector is a foundational component of its agricultural industry, characterized by significant production and processing capabilities.

Dairy Cattle and Production

With an approximate dairy cattle population of 4 million as of 2022, the country produces nearly 12.5 billion liters of milk annually. This output is facilitated by a mix of large-scale specialized farms and numerous smaller operations that leverage modern methodologies and effective breeding practices.

Milk Processing and Dairy Product Manufacturing

In 2022, Mexico processed approximately 9 billion liters of milk, a testament to its robust dairy processing infrastructure. The country produced 470,000 metric tons of cheese, alongside 100,000 metric tons of milk powder and 60,000 metric tons of whey. These production volumes are efficiently managed through the adoption of advanced technologies and practices, ensuring high standards of quality and efficiency.

Key Enterprises in the Dairy Market

• Lala Group: One of the largest dairy companies in Latin America, Lala Group has a varied product portfolio that includes milk, cheese, and yogurt.
• Grupo Alpura: A major entity in Mexico's dairy market, specializing in milk, cheese, and yogurt production.
• Sigma Alimentos: A leading food company with a significant dairy product segment.

Notable Dairy Farms

• Rancho San Jose: Known for its high-quality milk production using advanced techniques.
• Agropecuaria El Encino: A significant milk supplier nationally with notable production capabilities.
• Rancho Los Fresnos: Recognized for sustainable dairy farming practices and high yields.

Exports and Imports of Dairy Products

In 2022, Mexico exported dairy products valued at approximately USD 300 million, while imports totaled around USD 1.1 billion. The domestic market demand outpaces local production, necessitating imports of products like milk powder, cheese, and whey predominantly from major dairy-producing countries.

Significant Events in Mexico's Dairy Market

• Integration of innovative production techniques and increased investments in dairy infrastructure have stimulated industry growth.
• Enhanced trade agreements have streamlined import and export processes with key dairy-exporting nations.
• Strategic partnerships and acquisitions have broadened market reach and diversified product offerings among leading dairy enterprises.
• The U.S. reported a 12% rise in cheese exports to Mexico in June 2023, highlighting Mexico's critical role in enhancing U.S. dairy exports, particularly for anhydrous milk fat and cheese.
• Mexico has surpassed China as a premier destination for U.S. food and agricultural exports, with forecasts predicting exports will reach $29.9 billion by 2025.

Additional Insights

Mexico stands as the largest dairy market in Latin America and a pivotal partner for U.S. dairy imports, accounting for over 25% of U.S. dairy exports. The country imported $28.6 billion in U.S. agricultural products, marking it as the top purchaser of U.S. corn and corn-based sweeteners. The Mexican dairy industry benefits from strategic trade relationships and advanced production technologies, being a vital player in New Zealand's AMF exports. Under President Claudia Sheinbaum, a new agricultural policy aims to achieve a modernized vision of self-sufficiency through improved trade and technology.

Despite its robust nature, Mexico's dairy industry confronts challenges from globalization and sustainability. The artisanal cheese market faces threats from rising prices and competitive practices affecting regional artisans. A recent Profeco study highlighted varying protein contents in different milk brands, encouraging consumer vigilance.

Looking forward, Mexico plans to lift tariffs on EU cheese, poultry, and pasta exports as part of an updated trade agreement. However, economic instability due to potential U.S. trade and deportation issues poses challenges for the retail sector. It's noted that Mexico was the largest importer of U.S. dairy in 2024. Mr. Trump announced he would decide by February 1 whether to implement a 25% duty on imports from neighboring Mexico and Canada.

Modified: 2025/02/05

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