Farming -

The farming industry is divided in both farming and industrialized production of different cereals, grains, fruits and vegetables.

There are two ways of procuring crops: open sky and protected crop
Open sky farming: in this one the land must be prepared, fertilized and then seeded, this type of farming is most affected by Climate Change and local climate variations
Protected Crop: The crops farmed by this method are grown totally or partially inside a greenhouse, tunnel, or other
The industry was valued at US$2,104.6 billion in 2018
The industry valuation is expected to hit a target of US$2,372.2 billion by 2022 with a Compound Annual Growth (CAG) rate of 3.2%

Mexican farming output was reported at US$32.8 billion. The biggest local producer was Michoacán with a total production valued at US$4.3 billion

By the end of 2018, the industry had seeded 21.2 million hectares and 20.3 million hectares (95.7%) were harvested

The value of Mexican hectares harvested has shown an average CAG rate of 8.9%

For the first time ever, Mexico ranked in the top 10 largest exporters of farming products in 2019

China (9.0%), Brazil (6.0%) and Mexico (6.0%) registered the biggest increases in their exports in 2019, while Australia (-10.0%) and Indonesia (-7.0%) suffered big drops in their exports
The main three positions in the top 10 remained the same, with the European Union at the top, while Mexico, as a new member, arrives at the tenth place

In 2018, the industry reported exports of US$14.6 billion

Avocado ranked first and totaled US$2.4 billion (16.4% of total exports)
Fresh vegetables and legumes category ranked second at US$2.0 billion (13.6% of the total exportations)

In the same period, the industry reported imports of US$11.2 billion

Yellow corn ranked first at US$3.2 billion (29.0% of the total importations)
Soybean seeds ranked second at US$2.0 billion (18.0% of the total importations)

During the period of 2014-2018 net exports presented an average surplus of US$2.6 billion

Trade surplus was highest in 2017 at US$4.0 billion

Constant growth for the next four years is forecasted thanks to the ongoing implementation of technological resources (i.e. sensors, drones, etc.)

Expected CAG (2019F – 2022F) in farming products market value of 2.3%
The forecasted 2022 value is US$26.1 billion, representing a 9.7% increase against the 2019 forecast
Output in tons is expected to get a CAG (2019F – 2022F) of 0.8%
Expected output in 2020F is at 145.8 million tons, gaining a 3.2% against 2019F

Field Sensors & IoT (Internet Of Things)

Sensor implementation in crop fields. They provide information to the farmer about the crops through the Internet.

Equipment Sensors & IoT

Built-in machinery and tractor sensors used to obtain production data, crop soil condition, and crop mapping

Drones and Crop Surveillance

Drones replace the use of small aircrafts in the crop field, useful for crop monitoring and fumigation

Robots and Artificial Intelligence

Focused on crop monitoring, weed detection/elimination and waste reduction through production optimization

RFID Sensors (Radio Frequency Identifiers) and Monitoring

Used when harvesting and picking. Provides crop information (location, status, quality) to the final consumer
As part of this trends, CNH Industrial N.V., a UK-based company engaged in capital goods sector, announced the acquisition of AgDNA Technologies Inc., a US-based developer of farm management software platforms, for an undisclosed amount. The transaction is in line with CNH Industrial’s strategy to expand its precision and digitalization farming offering

Mexico has 12 free trade agreements with 46 countries, one with great importance is between the United States and Canada because of the trade volume

The USMCA Trade Agreement, which will replace NAFTA, is currently in a ratification process both northernmost countries. This produces uncertainty in trade between the three countries given that tariffs may still be imposed until the USMCA is ratified

The Mexican farming industry is vulnerable to the outcome of the ratification of the agreement, since 90.0% of the tomatoes produced in Mexico are exported to the USA, as well as 87.0% of the chilis produced and 78.0% of the produced avocados
Tariffs on exports would represent a hit of ~US$111 million to Mexico given that 80.0% of all farming exports go to the USA

ASERCA
Capital IQ
EMIS
FAO
Forbes
INEGI
Mergermarket
OECD
OMC
Qampo
RAE
Senado de México
SIAP
World Bank

Farming

The farming industry is divided in both farming and industrialized production of different cereals, grains, fruits and vegetables.

There are two ways of procuring crops: open sky and protected crop

Open sky farming: in this one the land must be prepared, fertilized and then seeded, this type of farming is most affected by Climate Change and local climate variations

Protected Crop: The crops farmed by this method are grown totally or partially inside a greenhouse, tunnel, or other

The industry was valued at US$2,104.6 billion in 2018

The industry valuation is expected to hit a target of US$2,372.2 billion by 2022 with a Compound Annual Growth (CAG) rate of 3.2%

Mexican farming output was reported at US$32.8 billion. The biggest local producer was Michoacán with a total production valued at US$4.3 billion

By the end of 2018, the industry had seeded 21.2 million hectares and 20.3 million hectares (95.7%) were harvested

The value of Mexican hectares harvested has shown an average CAG rate of 8.9%

For the first time ever, Mexico ranked in the top 10 largest exporters of farming products in 2019

China (9.0%), Brazil (6.0%) and Mexico (6.0%) registered the biggest increases in their exports in 2019, while Australia (-10.0%) and Indonesia (-7.0%) suffered big drops in their exports

The main three positions in the top 10 remained the same, with the European Union at the top, while Mexico, as a new member, arrives at the tenth place

In 2018, the industry reported exports of US$14.6 billion

Avocado ranked first and totaled US$2.4 billion (16.4% of total exports)

Fresh vegetables and legumes category ranked second at US$2.0 billion (13.6% of the total exportations)

In the same period, the industry reported imports of US$11.2 billion

Yellow corn ranked first at US$3.2 billion (29.0% of the total importations)

Soybean seeds ranked second at US$2.0 billion (18.0% of the total importations)

During the period of 2014-2018 net exports presented an average surplus of US$2.6 billion

Trade surplus was highest in 2017 at US$4.0 billion

Constant growth for the next four years is forecasted thanks to the ongoing implementation of technological resources (i.e. sensors, drones, etc.)

Expected CAG (2019F – 2022F) in farming products market value of 2.3%

The forecasted 2022 value is US$26.1 billion, representing a 9.7% increase against the 2019 forecast

Output in tons is expected to get a CAG (2019F – 2022F) of 0.8%

Expected output in 2020F is at 145.8 million tons, gaining a 3.2% against 2019F

Field Sensors & IoT (Internet Of Things)

Sensor implementation in crop fields. They provide information to the farmer about the crops through the Internet.

Equipment Sensors & IoT

Built-in machinery and tractor sensors used to obtain production data, crop soil condition, and crop mapping

Drones and Crop Surveillance

Drones replace the use of small aircrafts in the crop field, useful for crop monitoring and fumigation

Robots and Artificial Intelligence

Focused on crop monitoring, weed detection/elimination and waste reduction through production optimization

RFID Sensors (Radio Frequency Identifiers) and Monitoring

Used when harvesting and picking. Provides crop information (location, status, quality) to the final consumer

Mexico has 12 free trade agreements with 46 countries, one with great importance is between the United States and Canada because of the trade volume

The USMCA Trade Agreement, which will replace NAFTA, is currently in a ratification process both northernmost countries. This produces uncertainty in trade between the three countries given that tariffs may still be imposed until the USMCA is ratified

The Mexican farming industry is vulnerable to the outcome of the ratification of the agreement, since 90.0% of the tomatoes produced in Mexico are exported to the USA, as well as 87.0% of the chilis produced and 78.0% of the produced avocados

Tariffs on exports would represent a hit of ~US$111 million to Mexico given that 80.0% of all farming exports go to the USA

ASERCA

Capital IQ

EMIS

FAO

Forbes

INEGI

Mergermarket

OECD

OMC

Qampo

RAE

Senado de México

SIAP

World Bank

Valuation update Q2 2021

Valuation update Q1 2021

Valuation update Q4 2020

Valuation update Q3 2020

M&A News