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Mexico's Dairy Industry: An In-Depth Overview

Mexico's dairy sector is a vibrant amalgamation of substantial production volumes, pivotal trade activities, and influential market players. In 2022, the industry showcased remarkable integration of advanced farming techniques and strategic investments driving growth.

Production and Livestock

In 2022, the Mexican dairy industry was supported by approximately 4 million dairy cattle, leading to an impressive annual milk production volume of around 12.5 billion liters. This robust production reflects the country's blend of large-scale operations and smaller farms, all focusing on efficiency and quality through modern methodologies.

Milk Processing and Product Manufacturing

The processing of milk in Mexico reached about 9 billion liters in 2022. Cheese production, a cornerstone of this industry, totaled 470,000 metric tons. Additionally, the production of milk powder was 100,000 metric tons, alongside 60,000 metric tons of whey, emphasizing the use of cutting-edge technologies to maintain high standards of quality.

Prominent Dairy Enterprises

• Lala Group: A major force in Latin America's dairy market, offering a range of products including milk, cheese, and yogurt.
• Grupo Alpura: Renowned for its quality output in milk, cheese, and yogurt segments.
• Sigma Alimentos: A leading food company with a significant focus on the dairy sector.

Notable Dairy Farms

• Rancho San Jose: Implements contemporary methods for high-quality milk production.
• Agropecuaria El Encino: A key player in the national milk supply chain.
• Rancho Los Fresnos: Known for sustainable agricultural practices and high production yields.

Trade: Exports and Imports

In 2022, Mexico's dairy exports were valued at approximately USD 300 million, while imports reached around USD 1.1 billion. This import trend is largely driven by domestic demand surpassing local production capabilities, with imports mainly comprising milk powder, cheese, and whey from prominent exporting countries.

Significant Market Events

• Adoption of innovative production methods and increased infrastructure investments to stimulate industry growth.
• Enhancement of trade agreements to streamline import/export processes with leading dairy-exporting countries.
• A noteworthy 12% rise in U.S. cheese exports to Mexico by June 2023, highlighting Mexico's crucial position in U.S. dairy exports.
• Projections indicating Mexico will surpass China as the top U.S. agricultural export destination by 2025.
• Elimination of tariffs on EU cheeses and efforts to tackle challenges in the artisanal cheese market.
• Nestlé's strategic investments to escalate local milk production, along with Liconsa's supply chain optimizations.
• Government support in areas such as Chihuahua to assist farmers through severe drought periods.

Economic and Trade Insights

Despite economic challenges, Mexico remains a key importer of U.S. dairy products, with this trend expected to continue into 2024. While U.S. tariffs have impacted trade dynamics, relief efforts have alleviated some effects. Notable investments by companies like Nestlé illustrate ongoing industry evolution. Local initiatives, such as "Alileche," aim to strengthen the domestic dairy industry, although obstacles like rising criminal activities affecting milk production and sales fluctuations during periods like Lent persist. The Federal Consumer Protection Office (Profeco) actively analyzes and assesses various cheeses to uphold quality standards.

Additional Highlights

• Liconsa Milk Collection Centers in Hidalgo show significant progress.
• Mexico is participating in the first World Cup of Dulce de Leche.
• Liconsa has resolved overdue payments to dairy farmers, pledging timely payments in the future.
• Fresnillo, famed for silver production, is also celebrated for traditional artisanal cheese making.
• The importance of Mexico as a crucial export market for US dairy products.
• Grupo Lala's investment of 70 million pesos in a campaign to promote milk consumption in alignment with WHO and FAO guidelines.
• The dairy industry in Chihuahua is facing significant challenges due to prolonged drought and rising forage costs.
• Ahome dairy producers are ready to join Mexico's plan under Claudia Sheinbaum to increase national production of basic foods, including milk.
• Alfa, a major Mexican company, has completed its strategic transformation by slimming down to focus exclusively on Sigma, its food division.
• The Mexican dairy industry, a crucial sector in the national economy, faces challenges but embraces technological innovations for growth.
• The scandal involving Seguridad Alimentaria Mexicana (Segalmex) has been one of the most significant issues in the administration of former President Andrés Manuel López Obrador (AMLO). Segalmex was established to provide essential food supplies to vulnerable communities in Mexico.

Mexico's government aims to increase national milk production by 15% to 15 billion liters by 2030. The Holstein cattle will be transported via land to various states across Mexico.

Modified: 2025/04/25