Mexico is expected to become the top spot for U.S. agricultural exports, surpassing Canada as the leading ag export market.
In a new report from CoBank’s Knowledge Exchange, Mexico is projected to be the fastest growing export market for the U.S. in 2025 following a booming post-COVID-19 economy and a rapidly growing manufacturing sector.
“The rise of Mexico as a customer has been a huge success story for U.S. agriculture,” said Rob Fox, director of CoBank’s Knowledge Exchange, in a news release. However, Fox points to a few developing risk factors for the country, including a slowing economy and a weakening peso.
“Mexican consumers’ purchasing power will be more challenged in 2025,” Fox noted.
The takeover
Ag exports to Mexico have surged 65% over the past four years, reaching $31.4 billion in 2024, only slightly behind Canada’s export sales of $32.4 billion, CoBank said. Mexico’s economic boom has led consumers to expand their traditional diets, creating more demand for U.S. meat, poultry, dairy, processed foods and feed grains.
Ag exports to Mexico rose from 11.2% to 16.4% from 2020-24. Corn, pork, dairy products, soybeans and poultry products are the top five commodities purchased by Mexico on a volume basis, according to USDA data.
Grain, feed, oilseeds and related products totaled $13.9 billion in exports, the largest category of ag exports. Expanding domestic meat and poultry industries has driven feed demand, along with severe drought conditions that limit domestic crop yields and grazing conditions. In 2024, domestic corn production for Mexico was down 16% from 2022.
“Given the ongoing trade tensions between the U.S. and China, Mexico will almost certainly overtake China as the largest export market for U.S. grain, feed, and oilseeds in 2025,” the report said.
CoBank expects meat and poultry exports to continue to increase in the coming years, driven by expanding consumption. Mexico is the largest destination for dairy products at $2.5 billion in export sales, almost double the amount of the second-largest market, China. Total U.S. dairy export value to Mexico has increased by more than 75% since 2020, driven mostly by demand for cheese, which has grown about 3.3% per capita over the past decade.
However, Mexico’s slowing economy and a weakening peso—down by about 15% since early 2024—gives economists reasons to believe the Mexican economy will shrink by 0.3% in 2025.
Although CoBank noted free trade agreements have fallen out of favor in recent years, they find it hard to see the level of interconnectedness between the two countries as anything other than a win-win.
“Since the North American Free Trade Agreement in 1994 (later replaced by the United States-Mexico-Canada Agreement), food and agricultural trade between the three countries has risen nearly ten-fold in dollar terms,” the report read. “Consumers on both sides of the border benefit from a wider array of food choices at lower prices than they would without free trade.”
Other imports
A recent Market Intel report penned by American Farm Bureau Federation economist Daniel Munch highlighted the U.S.’ ag trade deficit.
“The U.S. agricultural trade deficit has garnered significant attention, as the value of imported agricultural products now exceeds the value of what we export,” Munch said.
Last year, the U.S. imported $213 billion in ag goods from 184 countries and territories, with Mexico, Canada and the European Union accounting for nearly two-thirds of total import value. Ag imports from the three partners have more than quadrupled since 2000, rising in value from $24 billion to more than $102 billion, Munch said. Mexico has been the No. 1 spot for U.S. ag imports since 2016, surpassing Canada.
“While U.S. imports are dominated by high-value, consumer-ready foods, our exports lean more heavily on raw, unprocessed commodities like grains and oilseeds,” Munch said. Nearly 70% of total imported goods fell under consumer-oriented products, which include products like produce, baking ingredients and bulk commodities.
In 2024, beef and veal imports totaled 5.2% of total ag import value at $11.05 billion.
“The U.S. is a world-class producer of many of the very same products it also imports,” Munch said. “Yet, many consumers still choose foreign options, because they can.”
Strong import flows shouldn’t be mistaken for a lack of domestic capability, he said, emphasizing the essential and complementary roles imports and exports play in U.S. ag. — Anna Miller, WLJ managing editor
