Mexico's dairy demand poised for growth in 2024
Source: The DairyNews
Mexico's economy, experiencing eight consecutive quarters of growth, may face a potential slowdown, raising questions about the impact on dairy demand in 2025. However, for now, the demand remains robust and is expected to expand further in the coming year, potentially boosting U.S. exports.
Betty Berning, an analyst with the Daily Dairy Report, notes that the strengthening Mexican peso against the U.S. dollar, coupled with strong demand from the United States, particularly in the top dairy export market, is likely to support dairy product movement and prices.
A recent USDA Global Agricultural Information Network (GAIN) report predicts a 2% year-over-year increase in Mexico's milk production in 2024, reaching over 30.4 billion pounds. The addition of 50,000 cows to the milk herd, along with a modest 1% gain in milk per cow, is expected to drive the production growth.
Lower farm input costs and rising domestic demand have contributed to the increase in milk volumes, with over half of Mexico's milk being processed, and the rest used for drinking milk, according to Berning.
Despite the anticipated growth in milk production, Mexico remains a milk-deficit market, with a strong affinity for dairy products among its population. Traditional Mexican cheese, such as Queso Fresco, remains popular, but there is a growing interest in new varieties. Mexico, ranking fifth in global butter consumption, still relies on imports for about 27% of its cheese and 5% of its butter needs.
The USDA predicts a 2% growth in cheese and butter manufacturing in Mexico in 2024, with a continued need for imports. Cheese consumption is expected to increase by 2% next year, driven by both increased purchasing power and population growth.
Skim milk powder, heavily used by the hotel, restaurant, and institutional sectors in Mexico, is a key U.S. dairy product exported to the country. Berning highlights the positive outlook for exports as these sectors continue to recover post-Covid.
According to the USDA, skim milk powder consumption in Mexico is forecasted to grow by a strong 11% in 2024, reaching 498,000 MT compared to 2023. However, despite the growth in consumption, Mexico's milk driers are expected to modestly expand throughput, leading to a reliance on imports to meet about 90% of total consumption—an increase of approximately 13%, according to the report.
A recent USDA Global Agricultural Information Network (GAIN) report predicts a 2% year-over-year increase in Mexico's milk production in 2024, reaching over 30.4 billion pounds. The addition of 50,000 cows to the milk herd, along with a modest 1% gain in milk per cow, is expected to drive the production growth.
Lower farm input costs and rising domestic demand have contributed to the increase in milk volumes, with over half of Mexico's milk being processed, and the rest used for drinking milk, according to Berning.
Despite the anticipated growth in milk production, Mexico remains a milk-deficit market, with a strong affinity for dairy products among its population. Traditional Mexican cheese, such as Queso Fresco, remains popular, but there is a growing interest in new varieties. Mexico, ranking fifth in global butter consumption, still relies on imports for about 27% of its cheese and 5% of its butter needs.
The USDA predicts a 2% growth in cheese and butter manufacturing in Mexico in 2024, with a continued need for imports. Cheese consumption is expected to increase by 2% next year, driven by both increased purchasing power and population growth.
Skim milk powder, heavily used by the hotel, restaurant, and institutional sectors in Mexico, is a key U.S. dairy product exported to the country. Berning highlights the positive outlook for exports as these sectors continue to recover post-Covid.
According to the USDA, skim milk powder consumption in Mexico is forecasted to grow by a strong 11% in 2024, reaching 498,000 MT compared to 2023. However, despite the growth in consumption, Mexico's milk driers are expected to modestly expand throughput, leading to a reliance on imports to meet about 90% of total consumption—an increase of approximately 13%, according to the report.
Key News of the Week
