Mexico: Traditional protected agricultural sector in need of diversification

“In 2013, AMHPAC´s members reported the production for a little over 7,000 hectares (ha) of protected surface. About 60% of this surface was destined for the production of tomatoes, 20% for cucumbers and 17% for bell peppers. In 2018, the reports say we are close to 8,500 ha distributed very similarly: 67% tomatoes, 15% cucumber and 17% bell peppers”, states Alfredo Díaz Belmontes, the CEO of AMHPAC (Asociación Mexicana de Horticultura Protegida).

He adds that there is a small percentage of hectares destined for other crops, like eggplant and various varieties of hot peppers. However, this is minimal compared to those three main crops and they have not seen much growth. “This shows that most companies tend to stick with what they know. We do see that most of AMHPAC´s members have invested in adapting their protected surface and training their workforce for optimizing their crops.”

According to Díaz these above mentioned numbers are a reflection of what’s happening in the market as they’ve seen a greater demand for tomatoes, cucumbers and bell peppers grown under protected schemes than other products. “Depending on only these three products puts the industry in a vulnerable position. Due to the current political and climate circumstances, diversification is a must. This is in terms of crop diversification, but also looking for other export markets like Asia and/or Europe and investing in added value for primary production. As an industry, we are already committed to the research and the development for this, so changes should be noticeable in the near future.”

Díaz explains that there are some niche markets in this segment such as ready to eat produce. Also, specialties like cherry grapes or even heirloom tomatoes that have been in production for some time now. “We have not seen a significant increase in exports to the US for these products. Same goes for mini vegetables, like mini bell peppers.”

“Organic production on the other hand, is slowly but surely growing in Mexican protected agriculture. Production and exports are still rather small compared to the estimated demand, but this is a market niche that Mexican protected agriculture seems to be investing in.”

Export vs. Local market
The Mexican protected agriculture industry has been and still is focused on the export market, AMHPACs members harvest an estimated 1.2 million tons of fresh produce a year, and reports show that in 2018, 77% of the production will be destined for the US, 4% to Canada and 19% to Mexico.

“This shows that Mexican protected agriculture has grown in great measure due to the competitive advantage in costs, quality and food safety that protected production brought for tomatoes, cucumbers, bell peppers and berries. All products that are highly demanded in the US, a very strict and demanding market when it comes to quality, food safety and price”, continues Díaz.

He explains that when it comes to protected agriculture in the US market, Mexico virtually has no competition. For example, Canada exports 0.2% of the amount of protected produce that Mexico exports to the US, and Canada is one of the largest exporters of protected produce, competing with countries like the Netherlands and Spain.

As 19% remains in Mexico, this shows that the national market is also very important for the industry. “We are currently seeing a slight trend of a higher demand on protected produce in Mexico's supermarkets. The national market is not as strict or demanding compared to the US, but it’s slowly evolving and becoming more aware of the need for better quality produce.”

Changing climate
Díaz concludes by agreeing that climate change is bringing more adverse conditions for agriculture all over the world, by giving examples such as the extreme drought in California and in South Africa, more intense winters worldwide that have affected production, storm seasons with incredibly destructive results and other climatic conditions that can greatly reduce the capability to cover the food demand. “Recent events like the cold front, keep generating interest in this type of investment and we continue to see growth in Mexican protected agriculture. Nonetheless, it’s not just climate change, but also population growth, fewer resources and higher costs that will force humankind to look for production alternatives with sustainable methods, and protected agriculture is one of those.”

For more information:
Ing. Alfredo Díaz Belmontes
AMHPAC, Asociación Mexicana de Horticultura Protegida A.C.
Juan Carrasco 787 Nte. | Colonia Centro CP 80000 | Culiacán, Sinaloa, México
T: +52 (667) 715 5830

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