Opinion

The Shifting Landscape in U.S.–Mexico Produce Trade

Regulations, consumer demands, and supply chain challenges are reshaping a crucial cross-border market.



By Federico Schaffler

In recent years, American customers have become more aware of the origins of their food. Many consumers now choose fresh fruits and vegetables that are ethically produced, sustainably sourced, and organic, influencing their decisions and forcing businesses to modify their supply chains. As a result of this change, the produce trade between the U.S. and Mexico is changing as Mexican exporters — key suppliers to their northern neighbor’s market — have to adapt to evolving store expectations.

However, while consumers are becoming more interested in sustainable goods, the sector still faces several obstacles. Supply chain interruptions, climate change, inflationary pressures, and shifting trade regulations complicate a complex system. Retailers and importers must balance these demands to guarantee that fresh, premium produce keeps making its way onto American grocery store shelves at competitive costs. Resilience and creativity are now necessary rather than discretionary in this changing environment.

Rising Demand for Organic and Sustainable Products

Over the past 10 years, the demand for sustainably and organically cultivated produce in the United States has increased dramatically. According to the Organic Trade Association, fresh vegetables contributed significantly to the approximately $60 billion in organic food sales in 2023. Nowadays, consumers want fair labor policies, ecologically-friendly production methods, and transparency in farming practices in addition to the “organic” designation.

Major American retailers, such as Walmart, Kroger, and Whole Foods, have become more stringent in their procurement practices. Many now demand that suppliers adhere to strict sustainability requirements, like fair labor certifications, decreased pesticide use, and water conservation measures. Mexican growers are under more pressure than ever to meet these demands while controlling expenses and ensuring that several regulatory frameworks are followed.

These changing expectations are both challenging and an opportunity for many Mexican producers. Growers investing in precision farming, organic certification, and water-efficient irrigation techniques will have a greater chance of landing long-term agreements with major American merchants. Additionally, suppliers who can commit to sustainability are increasingly preferred by retailers trying to stand out in a crowded market.

Retailers’ Challenge: Balancing Profitability with Sustainability

U.S. retailers must balance affordability and sustainability as consumer demand for sustainably sourced produce rises. Food prices have increased due to inflationary pressures, inefficient supply chains, and rising manufacturing costs. It’s also unclear whether retailers will cover the extra expenses of sustainable sourcing or if customers will pay for them. Additionally, these costs will surely increase the amount that customers pay if additional tariffs are imposed due to current political initiatives.

Several grocery chains have historically depended on the trading relationship between the U.S. and Mexico to keep fresh produce reasonably priced. Mexico’s year-round production and affordable labor costs contribute to pricing stability in the U.S. However, retail pricing models are under strain as compliance costs for Mexican growers increase in tandem with sustainability goals.

Some businesses are exploring ways to lessen this difficulty by optimizing their supply networks. Strategies include investing in direct sourcing contracts, cutting out intermediaries, and utilizing digital tools like blockchain to enhance traceability. These initiatives increase efficiency and transparency but also bring about new complications that must be managed carefully by those responsible for the process.

Politics and Trade: New Leaders, New Policies

As both the U.S. and Mexico have recently transitioned into new federal administrations, the future of agricultural trade remains uncertain. Claudia Sheinbaum, Mexico’s first female president and a scientist by training, has a background in climate policy and sustainability. Her administration may introduce new initiatives that align with global trends in environmental responsibility, potentially influencing agricultural regulations, sustainability standards, and trade agreements that impact the produce trade between the U.S. and Mexico. If these efforts materialize, they could further push Mexican producers toward greener practices while also providing incentives for sustainable investments.

On the U.S. side, the unpredictability of President Trump’s approach to trade and sustainability presents another layer of uncertainty. His past policies, in his previous and in his current administrations, have included tariff escalations and trade restrictions that have had ripple effects across industries, including agriculture.

If new tariffs or regulatory changes arise, they could alter cost structures, impacting both Mexican exporters and American retailers. As a result, businesses on both sides of the border must remain vigilant and adaptable, preparing for policy shifts that could influence the produce market dynamics.

Supply Chain Adjustments

The produce trade prioritizes supply chain resilience despite changing customer preferences and pricing issues. Climate change, logistical problems, and possible changes in trade policy (such as the approaching 2026 USMCA review and potential new tariffs) seriously threaten the stability of fresh produce imports. These factors will affect retailers and, most importantly, consumers.

Both Mexican exporters and U.S. merchants are putting these issues into practice by enhancing supply chain resilience in the following ways:

  • Cold Chain Logistics: Investing in transportation infrastructure and refrigerated storage helps prevent spoilage and guarantees that fruit retains good quality during the trip. 
  • Digital Traceability Tools: AI-powered logistics platforms and blockchain enhance product tracing and allow merchants to confirm their suppliers’ sustainability commitments. 
  • Diversification of Export Markets: To lessen reliance on a single customer, some American exporters are entering the European and Asian markets, even though Mexico is still the United States’ top trading partner. Mexico is also experiencing this. 
  • Sustainable Farming Innovations: Water conservation techniques, soil health management, and precision agriculture satisfy retailer demands while promoting long-term environmental sustainability.

The U.S.-Mexico agricultural trade may stay competitive while meeting changing market demands by implementing these strategies.

Preparing for the Future of the Produce Trade

Sustainability, supply chain resilience, changing consumer expectations, and politics will all impact agricultural commerce between the U.S. and Mexico in the future. While obstacles such as regulatory demands and climatic hazards remain to be overcome, there are still plenty of opportunities for development and innovation.

Mexican companies must invest in robust supply chain solutions and follow sustainability trends to maintain access to the U.S. market. Retailers’ capacity to satisfy changing customer needs without sacrificing profitability will depend on their ability to maintain affordability, efficiency, and transparency.

Working together, U.S. retailers and Mexican suppliers will be more critical than ever as the industry navigates these developments. Proactively adjusting to these developments can help businesses prosper in a market emphasizing resilience, quality, and sustainability.

  • Federico Schaffler has a PhD in Public Policy and is currently the Foreign Trade Administrator for Foreign Trade Zone #94 in Laredo, Texas. These comments and opinions are personal and do not represent or imply the official position of the City of Laredo.