Agribusiness manufacturing is a best-prospect industry for Mexico and continues to exhibit steady expansion. The United States and Mexico have developed a lucrative relationship for agricultural machinery and equipment and have become priority markets for each other’s industries.
A strong internal demand and developing middle class has also driven the growth of agricultural needs in Mexico. As the 11th largest agricultural and livestock producer in the world and the 3rd largest in Latin America, large-scale agricultural production has driven the agricultural manufacturing sector.
Mexico’s Largest Agribusiness Exports
According to export.gov, U.S. agricultural machinery exports into Mexico stood at USD 1.21 billion in 2015 and are estimated to reach USD 1.36 billion in 2018. This highlights the immense opportunity for agribusiness manufacturing in Mexico.
The largest equipment exports to Mexico by value were:
- Tractor parts, engines, and engine parts
- Mowers and power equipment
- For produce and high-value crops
- For grains, oilseeds, and other commodity crops
- For raising livestock
- Sprayers
- Low and medium HP tractors
As the country’s livestock industry continues to expand, there is a growing need for farm/livestock equipment, especially in the poultry and dairy industries. Other areas of potential growth include brewery machinery, bakery machinery, meat processing machinery and IT equipment that can enhance agricultural output such as smart irrigation systems, drones, camera systems, and more.
It is worth noting that Mexican farms are smaller than those in America and hence require different equipment. Additionally, 70 percent of crops are harvested through manual labor, meaning plenty of sales opportunities to deliver modern equipment that can help to improve yields.
Agribusiness Machinery Suppliers
While Mexico has attempted to develop its own agribusiness machinery industry, production has been limited and focused primarily on low-end items. The country has become dependent on foreign suppliers to meet their machinery and equipment needs.
Mexico machinery import needs are met by:
- United States (50%)
- Germany
- China
- Italy
- Netherlands
- Canada (1.4%)
Machinery and equipment imports include but are not limited to:
- Peat moss
- Plant-growth regulators
- Harvesters
- Mowers
- Sprayers
- Seeders
- Harrows
- Rotary cutters
- Poultry incubators
- Brooders
- Packaging equipment
There are promising business opportunities in Mexico for these categories as forecasts show a 4% annual growth moving into 2020.
Mexico has also introduced PROAGRO programs, as well as the Trust Fund for Rural Development (FIRA), which were designed to support the agricultural industry and mechanization.
Where the Need Is
There are certain areas within the country that are pushing the demand for agricultural machinery and equipment including states with high commercial agriculture and cities like Monterrey, Queretaro, and San Luis Potosi.
Major companies within the agricultural machinery market include:
- Deere and Company
- AGCO Corp.
- CNH Industrial N.V.
- Kuhn Group
- Claas KGaA & GmbH
- Tractors and Farm Equipment Ltd.
- Valmont Industries Incorporated
- WORLD Group Company Limited
- International Harvester
- White Farm Equipment Organization