From producing 12.8 million metric tons of milk that fuels a $15 billion industry to sending cheese exports to 45 countries, Mexico's dairy sector is a powerhouse of growth, quality, and surprising complexity.
Key Takeaways
- In 2022, Mexico's total milk production reached 12.8 million metric tons, marking a 2.1% increase from 2021
- Raw milk production in Mexico for 2023 is projected at 13.2 million metric tons, driven by improved feed efficiency
- Jalisco state accounted for 22% of national milk production in 2022 with 2.82 million metric tons
- Per capita milk consumption in Mexico was 155 liters in 2022, down 1% from prior year
- Fluid milk consumption accounted for 62% of total dairy consumption in 2022 at 7.9 million metric tons
- Yogurt consumption per capita reached 18 kg in urban areas of Mexico in 2023
- Mexico exported 180,000 metric tons of dairy products in 2022, valued at $450 million USD
- Dairy imports to Mexico totaled 450,000 metric tons in 2022, primarily milk powder from New Zealand
- U.S. supplied 65% of Mexico's dairy imports worth $650 million in 2022
- Retail milk prices averaged 22 MXN per liter in 2023, up 8% YoY
- Wholesale SMP price in Mexico was $3,200 per MT in Q4 2023
- Dairy industry contributed 1.2% to Mexico's GDP in 2022 at $15 billion USD
- There are 45,000 dairy farms in Mexico as of 2023, 80% small-scale
- Grupo Lala holds 28% market share in fluid milk in 2023
- Number of dairy processing plants exceeds 1,200 in Mexico
Mexico's dairy industry shows steady production growth but faces a significant trade deficit.
Consumption
- Per capita milk consumption in Mexico was 155 liters in 2022, down 1% from prior year
- Fluid milk consumption accounted for 62% of total dairy consumption in 2022 at 7.9 million metric tons
- Yogurt consumption per capita reached 18 kg in urban areas of Mexico in 2023
- Cheese consumption grew 3.5% to 8.2 kg per capita in 2022
- Total dairy product consumption in Mexico hit 20.5 million metric tons equivalent in 2022
- Powdered milk consumption was 1.2 million metric tons in 2022, mainly for reconstitution
- Ice cream consumption per capita in Mexico was 5.2 liters in 2022
- Plant-based milk alternatives consumption grew 15% to 250,000 metric tons in 2023, impacting dairy demand
- Butter consumption reached 2.1 kg per capita in 2022
- Condensed and evaporated milk consumption was 1.8 million metric tons in 2022
- Per capita cheese consumption forecast 8.5 kg by 2025
- Fluid milk demand projected 8 million MT in 2024
- Sour cream consumption 1.5 kg/capita in 2022
- Powdered milk reconstitution 70% household use in 2023
- Total milk equivalent consumption 165 liters/capita in 2022
- Yogurt market value $2.5 billion USD in 2023
- Flavored milk consumption up 6% to 450,000 MT in 2022
- Cottage cheese demand rose 5% in urban markets 2023
- Whole milk preference 55% of fluid milk sales in 2023
Consumption Interpretation
Mexico's dairy scene is a tale of two refrigerators: while the classic staples like fluid milk and cheese hold steady, the nation's palate is clearly flirting with yogurt's rise, plant-based dalliances, and a scoop of ice cream, proving that even in a traditional market, consumers enjoy keeping their options on ice.
Economics
- Retail milk prices averaged 22 MXN per liter in 2023, up 8% YoY
- Wholesale SMP price in Mexico was $3,200 per MT in Q4 2023
- Dairy industry contributed 1.2% to Mexico's GDP in 2022 at $15 billion USD
- Average farmgate milk price was 8.5 MXN per liter in 2023
- Consumer spending on dairy products totaled 250 billion MXN in 2022
- Cheese retail price inflation was 10.2% in 2023
- Investment in dairy processing plants reached $500 million USD in 2022
- Producer margins for milk improved to 25% in 2023 due to feed cost drops
- Dairy export revenue grew 12% to $520 million in 2023 projections
- Farmgate price volatility index 15% in 2023
- Retail yogurt price 35 MXN/kg average 2023
- Dairy sector employment 450,000 direct jobs in 2022
- Feed cost 60% of production expenses in 2023
- Milk price support fund disbursed 2 billion MXN in 2023
- Cheese wholesale price $4.50/kg in Mexico City 2023
- Industry revenue growth 3.8% CAGR 2018-2023
- Consumer price index for dairy up 7.5% in 2023
- Export price for queso fresco $3,200/MT FOB 2023
Economics Interpretation
While a lucky few cows are seeing fatter margins thanks to cheaper feed, the rest of us are left moaning over cheese that’s inflating faster than a balloon and retail milk prices that have us wondering if it’s secretly sourced from sacred cows.
Industry
- There are 45,000 dairy farms in Mexico as of 2023, 80% small-scale
- Grupo Lala holds 28% market share in fluid milk in 2023
- Number of dairy processing plants exceeds 1,200 in Mexico
- 65% of milk is produced by smallholders with less than 50 cows
- Alpura commands 22% of the yogurt market in 2023
- Cooperatives represent 15% of milk collection volume in 2022
- Women participation in dairy farming is 35% in rural Mexico
- Modern retail channels account for 55% of dairy sales in 2023
- Milk quality compliance rate improved to 92% in 2023 testing
- 32,000 small farms supply 45% of milk in 2023
- Sigma Alimentos 18% market share in cheese 2023
- Automated milking systems in 12% of large farms 2023
- Milk collection centers number 2,500 nationwide 2022
- Organic dairy farms 1,200 certified in 2023
- E-commerce dairy sales 8% of total in urban 2023
- Veterinary services coverage 85% of dairy herds 2023
- Branding initiatives for 20 regional cheeses in 2023
- Water usage per liter milk 1.2 liters in efficient farms 2023
- National Dairy Council membership 500 companies 2023
Industry Interpretation
While giants like Lala and Alpura dominate the supermarket shelves, the true engine of Mexico's dairy industry remains a sprawling, vibrant network of small-scale farmers—supplying nearly half the nation's milk from countless family farms—yet they navigate a landscape of increasing modernization, cooperative strength, and a pressing need for greater inclusivity and sustainability.
Policy
- Dairy subsidies from government totaled 5 billion MXN in 2022
- USMCA dairy provisions increased U.S. market access by 20% since 2020
- TRQ for milk powder imports set at 50,000 MT annually under WTO
- National Dairy Program allocated 10 billion MXN for 2023-2028
- Ban on rBST hormone use enforced since 2005, 100% compliance in 2023
- Sustainability standards for dairy farms mandated for 30% by 2025
- Import permit requirements streamlined for 15 dairy products in 2023
- Price controls on LP milk lifted in 2022, leading to market stabilization
- Biosecurity protocols updated for 500 dairy farms in 2023
- Anti-dumping duties on U.S. cheese reviewed in 2023
- PROGAN program supports 10,000 dairy producers annually
- Methane emission reduction target 30% by 2030 for dairy
- Labeling norms for lactose-free dairy enforced 2023
- Export promotion fund $100 million MXN for dairy 2023
- Genetic improvement program for Holstein cows nationwide
- Quota administration system digitized in 2023
- Food safety audits on 300 exporters in 2023
Policy Interpretation
While Mexico carefully tends its domestic dairy herd with subsidies and genetic programs, it simultaneously guards the barnyard door with trade tools and biosecurity upgrades, ensuring that its growing market is neither flooded by imports nor compromised on quality as it milks the opportunities of USMCA.
Production
- In 2022, Mexico's total milk production reached 12.8 million metric tons, marking a 2.1% increase from 2021
- Raw milk production in Mexico for 2023 is projected at 13.2 million metric tons, driven by improved feed efficiency
- Jalisco state accounted for 22% of national milk production in 2022 with 2.82 million metric tons
- Mexico's dairy cow herd numbered 6.7 million heads in 2022, up 1.5% year-over-year
- Average milk yield per cow in Mexico was 2,050 liters annually in 2022
- Industrial milk processing capacity in Mexico stood at 15 million metric tons per year in 2023
- Organic milk production in Mexico grew to 45,000 metric tons in 2022, a 12% rise
- Sinaloa produced 1.65 million metric tons of milk in 2022, representing 13% of national output
- Milk production per hectare in intensive systems reached 25,000 liters in 2022
- Total cheese production from milk in Mexico was 450,000 metric tons in 2022
- In 2021, milk production was 12.5 million MT
- Aguascalientes produced 650,000 MT milk in 2022 (5%)
- Dairy cattle imports totaled 120,000 heads in 2022
- Concentrated feed use per cow was 2.2 tons/year in 2023
- Butter production hit 85,000 MT in 2022
- Pasteurized milk output 8.2 million MT in 2022
- UHT milk production grew 4% to 2.1 million MT in 2023
- Zacatecas milk output 1.2 million MT (9.4%) in 2022
- Silage use in dairy farms reached 40% adoption in 2023
- Cream production 120,000 MT in 2022
Production Interpretation
While Mexico's dairy herd grows at a gentle cow-pace and yields remain modest, the industry is aggressively pasteurizing, ultra-heating, and cheesing its way to a more productive, if not yet udderly efficient, future.
Trade
- Mexico exported 180,000 metric tons of dairy products in 2022, valued at $450 million USD
- Dairy imports to Mexico totaled 450,000 metric tons in 2022, primarily milk powder from New Zealand
- U.S. supplied 65% of Mexico's dairy imports worth $650 million in 2022
- Mexico's cheese exports grew 8% to 25,000 metric tons in 2023
- Milk powder imports reached 320,000 metric tons in 2022 under tariff quotas
- Bilateral dairy trade with USA hit $1.2 billion in 2022 under USMCA
- Mexico exported dairy to 45 countries in 2022, with USA as top destination at 70%
- Import tariffs on SMP were suspended, leading to 15% import increase in 2023
- Total dairy trade surplus for Mexico was negative $200 million in 2022
- Fresh cheese exports to USA reached 15,000 metric tons in 2022
- Dairy imports from EU increased 10% to 50,000 MT in 2022
- Cheese imports totaled 120,000 MT, 40% from USA in 2022
- Mexico's dairy exports to Central America 15,000 MT in 2023
- Milk powder export ban lifted partially in 2023 for 10,000 MT
- USMCA review enhanced dairy chapter commitments in 2023
- Border dairy trade volume $900 million monthly average 2022
- Non-tariff barriers reduced for 5 dairy categories in 2023
- Dairy re-exports from Mexico grew 20% to 30,000 MT in 2022
- Yogurt imports minimal at 5,000 MT due to local production
Trade Interpretation
Mexico finds itself in the ironic but lucrative position of being simultaneously America's favorite dairy customer and supplier, cheerfully importing mountains of powder while artfully sending back gourmet cheese, all in a high-stakes, billion-dollar trade ballet where the milk mustache is always a little bit lopsided.
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