Mexico-US Agricultural Trade since Covid

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February 28, 2022

The US has had an agricultural trade surplus since 1960, exporting farm commodities to other countries that are worth more than the value of the farm commodities that the US imports from other countries. However, the US has had an agricultural trade deficit with Mexico since 2014.

The Mexico-US agricultural trade deficit widened in 2020-21 during the covid pandemic as US meat and grain exports to Mexico fell while US fresh fruit and vegetable imports from Mexico rose.

The US imported farm goods from Mexico worth $33 billion in 2020 and exported farm goods to Mexico worth $18 billion

US Imports. Fresh fruits and vegetables are half of the value of US farm imports from Mexico, and their volume and value has grown since NAFTA went into effect in 1994.

The US imported over 10 million tons of fresh fruits and vegetables from Mexico in 2019

US agricultural imports from Mexico have been rising, and rose in 2020 and again in 2021.

US farm imports from Mexico rose in both 2020 and 2021; US farm exports fell in 2020 but reached new peaks in 2021

Beer and other alcoholic drinks are classified as agricultural commodities. US farm imports from Mexico in 2019 included $3.9 billion worth of beer and $800 million worth of tequila. Imports of beer and tequila have been increasing, and tequila imports rose 20 percent between 2019 and 2020.

The two fresh fruits and vegetables with the largest 2019 to 2020 percentage increases in import value were raspberries and tomatoes.

US imports of fresh raspberries and tomatoes from Mexico rose between 2019 and 2020

The US imported more fresh raspberries, tomatoes, squash, bell peppers, and cucumbers from Mexico in 2020 than in 2019 despite higher prices in some cases, suggesting that US consumers are willing to pay premium prices for Mexican produce.

The leading US fresh fruit import from Mexico is fresh avocados worth $2.2 billion in 2020. US avocado consumption peaks in February for the Super Bowl and in May for Cinco de Mayo. Mexico produced 2.5 million metric tons of avocados in 2020-21, including three fourths in Michoacán and 10 percent in Jalisco. Michoacán exports 85 percent of its avocados to the US to take advantage of US retail prices of $1 or more per avocado.

Michoacán accounts for ¾ of Mexico’s avocado production

The US suspended avocado imports from Mexico for a week in February 2022 after a USDA APHIS inspector was threatened near Uruapan, Michoacán after uncovering a scheme to export Puebla avocados as Michoacán avocados. USDA has 77 inspectors and 13 staff in Michoacán.

The Mexican Association of Producers, Packers and Exporters of Avocado (APEAM) created a security and investigation unit to protect USDA inspectors in Michoacán, allowing exports to resume. Some speculated that drug cartels could interfere with tomato, bell pepper, and berry exports to the US by threatening USDA inspectors unless they received payments from exporters.

The next leading fresh fruit import from Mexico was raspberries worth $1 billion in 2020, followed by $820 million worth of imported strawberries and $515 million worth of imported fresh grapes. The value of fresh berry imports rose over 10 percent between 2019 and 2020.

The $1 billion value of imported raspberries was second only to $2.2 billion of avocados among fruits

Among fresh vegetable imports, tomatoes worth $2.4 billion were most valuable. Mexico produces about 3.3 million tons of fresh tomatoes each year in fall-winter and spring-summer harvests and exports 56 percent of its tomatoes.

Sinaloa is the leading producer of fresh tomatoes, but yields are highest in Queretaro, where most fresh tomatoes are from high-tech greenhouses. The higher yields of tomatoes planted in greenhouses and under shade houses and under plastic-covered tunnels means that less than a third of Mexico’s fresh tomatoes are from open fields.

Less than 1/3 of Mexico’s fresh tomatoes in 2020 were from open fields

Most Mexican tomatoes are Roma varieties, followed by round, cherry, and grape tomatoes. Most of the fresh Roma and other varieties of tomatoes that are produced in Baja California are exported to the US through the port of Otay Mesa.

Roma tomatoes are 88% of the fresh tomatoes produced in Mexico

The next leading US fresh vegetable imports from Mexico were bell peppers worth $815 million, cucumbers worth $600 million, and squash worth $460 million.

Tomatoes, bell peppers, and cucumbers dominated fresh vegetable imports in 2020

US Exports. The leading US farm exports to Mexico are meat and grain. The demand for meat fell as Mexicans lost jobs in 2020, shrinking their incomes, and as fewer people ate in restaurants due to covid. US farm exports to Mexico fell in spring 2020 and remained lower than in 2019 for the rest of the year, but rebounded in 2021, when they were higher than in 2019.

CEA. Many of the fresh berries and vegetables imported from Mexico are grown in Controlled Environment Agriculture, structures that protect growing plants, reduce pest pressures, and increase yields while facilitating organic production. One classification of CEA structures distinguishes them by roof type; is the roof porous? Greenhouses have non-porous roofs, while shade and screen houses have porous roofs open to rain and air.

CEA structures can have nonporous or porous roofs

Greenhouses are often chapels or semi-cylindrical structures with angled roofs

Tunnels are low-cost greenhouses that can be moved if pests or disease accumulate in soils. Low or micro tunnels are less than six feet high, while high tunnels are more than six feet high.

Micro tunnels cover one row of a crop, while high tunnels have room for machinery

References

Agehara, S., G. Vallad, and E. Torres-Quezada. 2020. Protected Culture for Vegetable and Small Fruit Crops: Types of Structures, Publication Number HS1224. University of Florida, Institute of Food and Agricultural Sciences.

Zahniser, Steven. 2022. COVID-19 Working Paper: U.S.-Mexico Agricultural Trade in 2020. ERS AP 97.