Extreme Bean Shortage in Mexico is Driving Up Prices

Dried Common Bean

Mexico

Published Jan 16, 2020

There is a massive shortage of all the varieties of common bean in Mexico due to a drought. This has led to very high domestic prices.

Legumes are a major source of sustenance in Mexico, where approximately 300K-400K tons are produced per year. Demand, however, is much higher at around 800K tons per year. Nevertheless, Mexico exports around 100K tons of beans to the US, mainly in the form of pinto beans, kidney beans, and other common beans. This year, however, exports might be significantly lower or even grind to a halt, as extreme drought has severely harmed bean yields.

60% Decrease in Bean Production

In the state of Zacatecas, the heart of Mexican bean production, production has declined by a whopping 65%, to only 120K tons. The state of Durango has seen only 20K tons of beans produced this year. The drought took place during the seeding season, which led to many seeds not sprouting. The extreme decline in yields is affecting prices strongly. Farmers that managed to harvest some beans are now facing very beneficial prices, reaching as high as MXN 27K per ton (USD 1,426.71). On average, prices are currently around MXN 15 per kg, around USD 0.85.

High Prices on the Global Market

The current global market conditions for beans are very beneficial to farmers and exporters, as many countries are experiencing legume shortages. The US was affected by similar weather, and India’s yield cannot meet its domestic demand. This high demand, coupled with low supply, is raising bean prices all over the market. Many Mexican farmers will seek to utilize these market conditions. On the contrary, the Mexican government is considering importing beans to ensure a stable supply in the domestic market.