As agricultural trade undergoes tectonic global shifts, strong trade between Mexico and the U.S. underpins economic stability, says Bree Baatz, Terrain grain and oilseed analyst.
In this week’s Ag Marketing IQ In Depth, Baatz analyzes the trade benefits of exports to Mexico and urges U.S. farmers to pay close attention to the U.S.-Mexico-Canada agreement, which is undergoing mandatory review. All three nations must decide by July 1 whether they want to extend the pact for another 16 years or risk its phased expiration.
Baatz, an ag economist on the Terrain team that provides analysis for customers of participating Farm Credit associations, says Mexico plays a critical role in supporting U.S. agriculture.
“Mexico is our largest agricultural trading partner, purchasing over $30 billion in commodities in 2024," she explains. This represents a 7% increase from the previous year, and — barring geopolitical impacts — the trend shows no signs of slowing.
Mexico’s population isn’t likely to peak anytime soon. With the country’s 2025 median age now at 30, their consumers have more purchasing power than ever before. To add to the export opportunity for U.S. farmers, Mexico has limited domestic production, which means it’s reliant on imports. About half of their domestic corn supply and more than 95% of their soybean supply is imported. U.S. has 90% market share of Mexico’s corn imports, 100% of its dried distiller grains and soymeal imports and 80% of its soybean imports.
With a growing population, rising disposable incomes and a shift toward protein-rich diets, Mexico’s demand for U.S. grains and livestock feed is poised to grow even further.
"As their population grows and more people move from lower income brackets into the middle class, we’re seeing a significant increase in protein consumption," Baatz says. This shift directly benefits U.S. farmers, as Mexico imports more beef, grains, and feed products to meet the needs of its evolving consumer base. "When consumers have more disposable income, they improve their diets, which means more animals and more feed. That’s fabulous for U.S. farmers,” she says.
Mexico’s import numbers climb
Mexico’s strategic importance extends beyond its growing consumer base. The country is the leading buyer of U.S. corn and dried distiller grains, as well as the second-largest importer of soybeans and soy meal
"Mexico provides consistent, year-round purchase activity across multiple commodities," Baatz notes. Emphasis on “consistent.” Baatz sees this reliability as crucial for U.S. farmers navigating global competition from countries like Brazil and China.
Much of the grain exported to Mexico travels via rail or through the Gulf of Mexico, making the U.S. uniquely positioned to serve this market efficiently. However, Baatz cautions that other countries are eyeing Mexico’s growing demand.
"Brazil and Canada have made trade overtures, but Mexico’s proximity and existing infrastructure give the U.S. a competitive edge," she explains.
"This partnership is vital for the long-term success of U.S. agriculture," Baatz says. "Mexico is ours to lose.”
To learn more about agriculture’s relationship with Mexico, watch Ag Marketing IQ In Depth.