18 Mexico Dairy Industry Statistics, Trends & Analysis

Government programs, commitments from the private sector, and improvements in technology and genetics are all working together to create strength for the Mexico dairy industry. Although there is a lack of cold-chain transportation networks within the industry that limits the number of products that are available, the processing sector does produce powdered milk, miscellaneous dairy products, and some fluid milk.

The U.S. Department of Agriculture estimates that 12.4 million metric tons (MMT) of commercial production occurred in the Mexican dairy industry for 2018. Farmers operating in this segment are using artificial insemination and importing dairy breeding cows to improve herds throughout the country. Improvements in on-farm management techniques, including refrigeration and sanitation programs, are expected to help start improving production levels over time.

Since 2017, Mexico has imported almost 9,000 dairy cows from the United States, with an additional 250 coming from other nations. All of them came through the ports of Ciudad Juarez and Nuevo Laredo.

Interesting Mexico Dairy Industry Statistics

#1. The current value of the Mexico diary industry is MXN 201.6 billion. That figure is about 25% higher than where it was in 2013, when only MXN 150.4 billion in sales were generated. (Statista)

#2. Domestic milk production does not meet demand levels in Mexico right now for high-quality dairy products. About 75% of the herds currently active in the local dairy industry have fewer than 30 head of cattle. (U.S. Department of Agriculture)

#3. Fewer than 1% of the dairy farms in Mexico are operating with more than 300 head of dairy cows, but this small group produces about 30% of the milk and products which are available domestically through the industry. (U.S. Department of Agriculture)

#4. A majority of the milk that comes from the Mexico dairy industry is used locally or on the farm where it was produced. The actual production levels from this effort are challenging to quantify since most families, especially those living in southern Mexico, only own one cow that produces milk. (U.S. Department of Agriculture)

#5. Dairy cattle consume 15% of the feed that Mexico produces during the average year. Only poultry and layer hens (52%) and hogs (17%) consume more throughout the country. All other agricultural feed needs, including horses and sheep, account for 2% of the consumption of feed. (AMEPA)

#6. Jalisco is the largest-producing state for dairy products in Mexico for the industry, followed by Coahuila, Durango, and Chihuahua. (U.S. Department of Agriculture)

#7. Domestic dairy fluid use in Mexico is forcast to be 4.2 million metric tons for 2018, although the demand for specialized dairy products from the industry continues to rise. Factory usage was 8.3 million metric tons during the same year, converting into powdered milk, UHT, and cheese products. (U.S. Department of Agriculture)

#8. The import forecast for dairy products for Mexico was 45,000 metric tons in 2018, with most of the demand associated with cream or milk that requires further processing. This figure is a 13% decrease from the imports purchased the year before. (U.S. Department of Agriculture)

#9. The Mexican dairy industry is the top export destination for similar products that are created in the United States. About $1.2 billion in value was shipped to Mexico in 2016, with 99% of the imports of fluid milk come from this destination. (U.S. Department of Agriculture)

#10. Exports of fluid milk from the Mexican dairy industry reached 10,000 metric tons for 2018, which would be a 20% increase from the year before. The United States receives 53% of these exports, followed by Guatemala (37%), Belize (6%), and Cuba (3%). (INEGI)

#11. The total number of cows in milk production for the national herd in Mexico numbers 12.1 million cows. (U.S. Department of Agriculture)

#12. Fresco cheese is the most popular type sold domestically from the Mexico dairy industry, contributing to 17% of the overall market. Panela takes 14% of the market, while doble crema is responsible for 13% of the market, as is Amarillo. (SIAP)

#13. About 510,000 metric tons of cheese are consumed in Mexico during the average year, with domestic production almost exclusively staying in the country to meet needs. (U.S. Department of Agriculture)

#14. Although there is growth to be found in the Mexican market for dairy products, about 40% of the total population lives in poverty, economic mobility is low, and that places limits on what the overall market can provide from a dairy perspective. (U.S. Department of Agriculture)

#15. Cheese imports from the Mexico dairy industry reached 125,000 metric tons in 2018, which was about 5,000 metric tons higher than the year before. 68% of the imports come from the United States. Another 10% comes from the Netherlands, and then Uruguay provides another 8%. (U.S. Department of Agriculture)

#16. The United States currently exports 25 different varieties of cheese to Mexico, although 40% of what is shipped is Mozzarella. The other popular types that are purchased domestically are Monterey Jack, Cheddar, and Gouda. (U.S. Department of Agriculture)

#17. Mexicans consume about 277,000 metric tons of butter each year, with a significant amount coming from the hotel, restaurant, and institutional sectors of the country. Another 65,000 metric tons is imported each year by the industry to fill in the gaps left by domestic suppliers. (U.S. Department of Agriculture)

#18. New Zealand currently holds the majority share of the import market for butter in Mexico, responsible for 90% of the products. The United States currently provides about 3% of the foreign products which are available for sale.

Mexico Dairy Industry Trends and Analysis

With the NAFTA agreements renegotiated, market conditions becoming favorable, and new trade opportunities on the horizon, the Mexico dairy industry seeks to expand its current markets while developing new ones. Canada is one of their primary targets, while the U.S. is interested in Grade A milk products that could be exported to them.

The domestic industry is currently dominated by LICONSA, who purchases 618,000 metric tons from local producers each year. About half of their consumers take part in subsidized milk programs which operate in local schools, while there are plans in place to start selling UHT, pasteurized, and powdered milk. The national price from this distributor is MXN 5.50, which equates to about $0.25 in the United States. In low-income regions, the price is as low as MXN 1.00.

With budget shortfalls expected in subsidy programs, the growth of the small farmer in the Mexico dairy industry seems perilous at best. While the larger farms will continue to meet a significant portion of the domestic need, the improvements to the herd populations will take time to develop. The next decade will likely be one where the industry struggles to gain its footing until the benefits that were started in 2017 and 2018 finally take hold.