Politics & pests: Mexico’s ag sector faces a dual crisis

Mexico’s trade relationship with the U.S. remains intact, despite the threat of potential tariffs, as the two countries cooperate and use technology to solve a pest problem.

Mexico’s agriculture sector is projected to grow over the next several years, given strong demand for its various agricultural goods, including avocados, berries, tomatoes, peppers, and more. Mexico’s agriculture sector is estimated to be worth $58.99 billion in 2025 and is expected to grow by a 2.10% CAGR between 2025-2029, according to Statista data.

Mexico “is in a very good position” when it comes to U.S.-imposed tariffs, compared to other Latin American countries like Brazil, Pablo Sherwell, senior food and agribusiness analyst at Rabobank, told AgTechNavigator.

The Trump administration’s tariffs on Mexican imports into the U.S. “have been put on hold twice for all the products that fell into the USMCA agreement,” he added. The U.S. imported nearly $41.6 billion worth of Mexican agricultural products annually between 2020-2024, ahead of Canada with approximately $35 billion in imports into the U.S., according to USDA data.

Over the years, Mexico increased its exports to Europe, Japan, and South Korea, but is likely to maintain a strong relationship with the U.S., given shared economic interests, Sherwell said. Additionally, “China has not been a very consistent market for Mexico,” so a massive shift in exporting to that country is unlikely, he noted.

“Mexico and U.S. [have] super-integrated markets. Despite all this, Mexico continues to be the number one partner with the U.S. And these bumps, we are going to have them here and there, but in the end, the markets are complementary to each other,” Sherwell elaborated.

NWS: A threat to food security in Mexico, and the U.S.

The U.S. and Mexico also have a “heavily integrated” animal protein supply chain, which is currently facing challenges due to NWS’ re-emergence in southern Mexico, Sherwell explained.

NWS is a fly species that lays larvae in livestock and humans. Initially eradicated through sterile fly technology, the pest re-emerged in Mexico late last year, causing the U.S. and Mexican government to enact a series of mitigation efforts.

The U.S. and Mexico are working to stop the spread of New World Screwworm, including by launching a facility in Panama and a forthcoming one in Mexico that will release 100 million sterile flies a week in an effort to push the pest back to the Darien Gap, the USDA shared in a statement.

Mexico invested more than 167 million pesos in the fight to eradicate NWS, and the National Service of Health, Safety and Agri-Food Quality (SENASICA) inspected over 9,000 cattle shipments and 600,0000 animals in order to prevent the movement of infected livestock, according to a government website. SENASICA operates 10 inspection points across southern states in Mexico, including Chiapas, Campeche, Tabasco, and Veracruz.

Additionally, Mexico’s Ministry of Agriculture and Rural Development and SENASICA launched a webpage with information for Mexican ranchers to stay up-to-date on NWS.

The pest problem created “logistical issues” in Mexico, as meat packers struggle to find cattle or are restricted in moving animals because of the fear of spreading NWS, Sherwell explained.

“Those [farmers who] have not really sent their cattle to the U.S., they have to keep it here, or they need to sell it to a Mexican packer, but the Mexican packer is not going to pay the premium right now. So, there is a lot of changes right now. Mexico used to send over a million cattle heads to the U.S.,” Sherwell elaborated.