Mexico’s government is preparing a response to the collapse in prices for tequila’s blue agave, President Claudia Sheinbaum said on October 16, 2026. Agriculture Secretary Columba López is developing proposals after talks with growers, according to El Economista.
Growers are still waiting for the terms: the October 16 announcement, as reported that day, included no budget, eligibility rules, guaranteed purchase price or start date.
Sheinbaum said she wanted a comprehensive proposal ready before meeting the growers. That presidential meeting remains pending, according to Agencia Reforma’s report in Plano Informativo.
The immediate problem is finding buyers for plants that have taken years to grow. An abundance of cheap agave gives distilleries more choice, while an independent farmer with a field ready to harvest can struggle to sell at all. Slower tequila sales make that imbalance harder to clear.
The crop takes years to catch up with the market
High agave prices encourage planting. The extra crop reaches harvest size years later, when the tequila market may have changed completely. Blue agave can take six to eight years to mature, with growing conditions and the plant’s sugar content helping determine when it is ready. Diageo annual report.
That delay helps explain the repeated swings between scarcity and surplus. When many growers plant in response to the same high prices, their fields can come ready together. Buyers suddenly have more agave than they need. If low returns then discourage planting and field care, the conditions for a later shortage can begin to form.
Sheinbaum traced the surplus to planting that began before the pandemic and increased during the tequila boom, followed by slowing demand, according to Sociedad Noticias’ transcript. Today’s crop reflects decisions made across several years; it cannot be adjusted as quickly as a distillery’s next order.
Tequila uses blue agave, Agave tequilana Weber variety azul. Mezcal uses many agaves, grown in different regions and traded through different markets. A surplus of tequila agave tells us little about the availability or price of a particular mezcal maker’s plants.
Having a buyer changes the grower’s position
El Informador reported prices as low as MXN 0.50 per kilogram for independent growers on October 16, compared with MXN 6.50 for traditional growers with longstanding tequila-company contracts. These reported examples describe different trading relationships; they are not national average prices.
A farmer selling on the open market must find someone willing to buy the crop now. An established purchase agreement gives a grower a route to a distillery.
A purchase contract can secure a buyer without protecting the grower against a falling price.
One grower interviewed by the Financial Times in February 2025 had secured a purchase contract that encouraged him to plant more, but it offered no price protection.
A grower’s income depends on how much agave the buyer will take, when it will be harvested, how the price is calculated and who pays for harvesting and transport. A headline price per kilogram leaves much of that income unexplained.
Tequila demand has lost its earlier momentum
The US is tequila’s dominant export destination, so a slowdown there reaches back into Mexican fields.
Sales by US spirits suppliers of tequila and mezcal combined fell 0.3% by volume in 2025, while their revenue fell 4.1%, according to the Distilled Spirits Council’s US tables. Lower price tiers gained volume and the two higher tiers declined. The figures cover the combined US category, with ready-to-drink cocktails counted separately.
Diageo reported a 15% decline in its worldwide tequila sales volume for the year ended June 30, 2026. It also reported softer US demand, stronger competition and distributors ordering more cautiously. When orders slow, distilleries can reduce their agave purchases while they sell the tequila they already hold. Diageo annual report.
Earlier support has reached some growers
The Tequila Regulatory Council, or CRT, opened applications for its Agave Responsable Social program in October 2024. The scheme connects qualifying traditional growers directly with tequila companies and promotes farming under contract. The CRT describes it as part of work involving the industry and federal and state governments. CRT’s May 2025 account.
In March 2026, the National Chamber of the Tequila Industry reported more than 200,000 metric tons sold through the scheme, with 1,426 growers having completed sales. CNIT.
The CRT’s May 2025 criteria included a grower registration dating from 1994–2017 and a maximum inventory of 100,000 plants, alongside tax and environmental requirements. A grower registered after 2017 would not have qualified under those rules. Eligibility for the proposed October response remains to be announced.
José Luis Zaragoza, president of Sistema Producto Nacional Agave Tequila, welcomed the government’s interest and called for closer planning of supply and demand and more cultivation contracts, El Informador reported. The government has yet to explain which measures it will adopt.
Will cheaper agave mean cheaper tequila?
Cheaper agave can reduce the cost of making tequila. The bottle price also covers distillation, packaging, aging, freight, taxes and the margins taken along the distribution chain.
A bottle sold today may have been made with more expensive agave bought years earlier.
Becle, the company behind Jose Cuervo, said lower input costs were gradually working through older, more expensive inventory in its 2025 results. Its fourth-quarter gross margin improved partly because agave costs had fallen.
In February 2026, Reuters reported that Becle executives were avoiding price cuts as aggressive as those of competitors. Diageo said it was changing Casamigos’ price to make the brand more competitive. Companies can use the savings to protect profits, offer discounts or do some of each.
For drinkers looking for a discount, compare the same bottle and size at the shops available to you. A discounted bottle may be good value, but it tells you little about what the farmer was paid.
What growers need from the next announcement
A useful proposal will have to explain who can participate, how much agave buyers will take and how growers will be paid. Any price support will also need to say who funds it. Direct sales could reduce the share taken by intermediaries. Growers also need enough orders from distilleries to absorb the harvest.
Longer term, matching planting to likely purchases could soften the next swing. That means accounting for agave already in the ground, the years left before harvest and the tequila that companies expect to sell. Contracts can help growers plan when their purchase and price terms give them meaningful security.
For farmers trying to sell this season’s crop, the decisive details will be the buyer, the harvest date and the payment.