Background on the Corn Producers’ Significant Strike
This week, we witnessed one of the most significant agricultural strikes in recent years. Thousands of corn producers, primarily from the Bajío region, blocked highways and the capital to demand answers to the collapse of agricultural profitability. After days of tension and negotiations, it was agreed that states and the federal government would pay 950 pesos per ton of corn as supplementary support. However, the core issue remains unresolved.
International Market Influence and Domestic Economic Distortions
The domestic corn price is not determined in Mexico; it’s set by the Chicago Mercantile Exchange. The T-MEC stipulates that Mexican corn references international cotations, where yellow and white corn respond to global supply and demand. This has led to a drastic drop: from over 7,000 pesos per ton at the start of the Russia-Ukrainian war in 2022 to 3,200-5,000 pesos in 2025.
This more than 50% reduction does not reflect the actual production costs. According to the Consulting Group of Agricultural Markets, production costs have increased by almost 50% over five years while prices have plummeted between 30 and 50% from 2022 highs. Today, costs range from 21,330 pesos per hectare for temporary cultivation to 42,267 pesos for irrigated land. With market prices of 4,800-5,000 pesos per ton, producers only recover around 50% of their investment.
The Superpeso and its Impact on the Corn Crisis
The superpeso exacerbates the crisis. An appreciated exchange rate makes imported U.S. corn cheaper, making it difficult for domestic producers to compete. Agriculture by contract, which was reasonable and less costly for the government, becomes unsustainable when reference prices fall below basic costs.
Negotiations and the Final Agreement
Farmers demanded a minimum guaranteed price of 7,200 pesos per ton of white corn and the exclusion of corn from the T-MEC to avoid unfair competition with subsidized imports. The agreement settled on 950 pesos of supplementary support per ton (800 federal, 150 state) for 90,000 Bajío producers with up to 20 hectares, raising the effective price to around 6,150 pesos. The fixed base price of 5,200 pesos was eliminated to allow direct negotiation with the industry.
Key Questions and Answers
- What is the main issue faced by Mexican corn producers? The primary concern is the collapse of agricultural profitability due to international market influences, domestic economic distortions, and the deconstruction of public policies that previously assisted farmers.
- How has the international market affected Mexican corn prices? The Chicago Mercantile Exchange sets the price of corn in Mexico, leading to a significant drop due to global supply and demand dynamics.
- What were the farmers’ demands during the strike? Farmers demanded a minimum guaranteed price of 7,200 pesos per ton of white corn and the exclusion of corn from the T-MEC to prevent unfair competition with subsidized imports.
- What was the outcome of the negotiations? States and the federal government agreed to pay 950 pesos per ton of corn as supplementary support for 90,000 Bajío producers with up to 20 hectares.
- What are the structural challenges in Mexican agriculture? The main issue is productivity, as agroindustries in Sinaloa and Sonora struggle to compete with larger-scale operations in the U.S. with better land, technology, guaranteed irrigation, and subsidies.
Conclusion on Sustainable Solutions
The reality is that both the guaranteed price model and official support primarily benefit a minority, while most depend on contracts with large corporations without public protection. This year, Mexico will be the world’s largest importer of corn, losing historical self-sufficiency and leaving food security in the hands of external sources.
The structural problem lies in productivity. Small-scale farming is unsustainable economically. We must either subsidize it—a valid option if we value corn diversity and cultural preservation—or reform agriculture to make it productive through consolidation, technological advancements, and economies of scale. Both options have high fiscal costs, and available fiscal space is continually shrinking.
The reached agreement is a temporary fix preventing immediate collapse but does not solve the fundamental equation: rising domestic costs versus decreasing international prices in a trade agreement that does not allow protectionism.
