Mexican Government Reaches Agreement with Corn Producers on Subsidy and Support Package

Strategic Insights -

The Mexican government and corn producers have reached an agreement, with the government offering a support package of 950 pesos per tonne in direct support, including 800 pesos from the federal government and 150 pesos from state governments. This deal will benefit 90,000 small-scale producers with plots of up to 20 hectares and cover up to 200 tonnes per producer. The agreement comes after weeks of protests by farmers across Mexico, who demanded that the government raise the guaranteed purchase price for corn to 7,200 pesos per tonne, 23% higher than the current guaranteed price of 5,840 pesos per tonne. The government's support package is seen as a response to global market conditions that have severely impacted Mexican farmers, with international corn prices currently hovering around 3,400 pesos per tonne.

Key Takeaways:

  • The Mexican government has reached an agreement with corn producers, offering a support package of 950 pesos per tonne, including 800 pesos from the federal government and 150 pesos from state governments.
  • The deal will benefit 90,000 small-scale producers with plots of up to 20 hectares and cover up to 200 tonnes per producer.
  • Farmers protested across Mexico, demanding a higher guaranteed purchase price for corn, 23% higher than the current price of 5,840 pesos per tonne.
  • The government's support package is seen as a response to global market conditions that have severely impacted Mexican farmers, with international corn prices currently hovering around 3,400 pesos per tonne.
  • The Agriculture Minister, Julio Berdegué, explained that international corn prices currently hover around 3,400 pesos per tonne, reaching 4,850 pesos once logistics costs are included -- levels that "don't cover production costs for many Mexican producers."
  • The deal also includes the expansion of the "Cosechando Soberanías" (Harvesting Sovereignties) program, which will offer credit at an 8.5% annual interest rate -- half what commercial banks charge -- along with agricultural insurance covering losses from droughts, floods, and pests.
  • President Sheinbaum announced the creation of a Mexican System for Market Organization and Corn Marketing, which will seek to establish reference prices, direct agreements between producers and industry, and clear rules to make the marketing chain more transparent.
  • Farmers do not want a fixed price and will participate in dialogue tables to negotiate prices with industry leaders.
  • Major flour companies have agreed to purchase corn at prices higher than international market rates.
  • The government will also offer additional support in 2026 to producers who continue growing native corn.

Statistics:

  • 90,000 small-scale producers will benefit from the support package.
  • The deal will cover up to 200 tonnes per producer.
  • International corn prices currently hover around 3,400 pesos per tonne.
  • Logistics costs add an additional 1,450 pesos per tonne, reaching 4,850 pesos per tonne.
  • The government's support package is 950 pesos per tonne, including 800 pesos from the federal government and 150 pesos from state governments.
  • Agricultural production costs have increased by more than 46% in the past five years.
  • The average national profit margin for white corn has declined from more than 50% in 2022 to barely 12% in 2025.
  • The situation threatens the viability of thousands of medium and large producers in Mexico who supply more than 75% of the national and export market.
  • Mexico has a record stock of 1.3 billion tonnes of corn.
  • The country will also have a very high harvest this year.

Sources:

  • Mexiconewsdaily.com
  • Twitter (@JulioBerdegue)
  • El País
  • N+
  • Aristegui Noticias
  • El Universal
  • La Jornada
  • GCMA
  • Revista Espejo