The fiesta’s over for Mexico’s agave farmers
The tequila boom was a great thing for agave growers, until it wasn’t
As a boy, Antonio visited his father’s dairy farm several times a week and helped feed the cows and sow corn. His family, mostly farmers from small towns in the western Mexican state of Jalisco, were surprised but supportive when he trained to become a doctor.
But in 2018, the tequila boom in the US presented Antonio, who requested we not use his real name, with an opportunity to get back into the fields and connect with his father. With the price of agave, the key ingredient in tequila, reaching record heights, everyone with a patch of land was rushing to plant the crop, or to sell their land to others keen to do so. As it peaked at some 30 pesos ($1.45) per kilogramme, doctors, dentists, and many others piled into the business. The number of registered agave growers rocketed from 3,180 in 2014 to 41,000 in 2023. For several years, the region was abuzz with a sense of possibility, even among those without land to grow on. Opportunistic investment companies set up crypto-esque trading websites encouraging Tapatíos, people local to the area, to place bets that the price of agave would keep rising.
Antonio, 44, and his partners spent two million pesos ($97,300) over the following years renting land, buying agave plants and paying for their maintenance. He kept up his medical practice but would go as often as he could to his plantations, which he used as both an investment and an escape. If he had chosen another crop — corn, say — he’d currently be expecting his seventh harvest. But agave is a plant designed to survive in desert environments. It guards its energy carefully and takes up to seven years to reach maturity.
A couple of years after he planted his crops, Antonio secured a contract with a tequila producer promising to buy his plants. The deal gave him the confidence to plant more, but did not include any kind of price protection. In 2022, when his first crops were still a couple of years from maturity, he started to hear about falling prices. Within two years the spot price had plummeted to between 1 and 3 pesos per kg. “We started to plant all excited, making the investment when things were good without really knowing that it’s all cyclical,” he says.
Stories like Antonio’s are now crystallised into tequila industry lore: the hapless middle-class professionals who helped fuel the agave oversupply crisis that is now rocking Jalisco. “There are a lot of people that invested in agave with borrowed money, some even sold their houses,” he says. He has slashed the maintenance on his crops, risking disease, and hopes to salvage something to pay off his debts. “A lot of the responsibility is with the tequila industry. If there hadn’t been that contract, I wouldn’t have planted as much as I did.”
The main road from Guadalajara, Mexico’s second city, to the town of Tequila is lined with agave. Row upon row of the plant stretches in a sea of blue-grey, up into the foothills of Jalisco’s mountains. On the roadside, the jagged crop frequently escapes its fencing and bursts from the verges, growing in the dust kicked up by passing cars.
The strain of agave that grows here, Agave tequilana, or blue agave, is the primary ingredient in tequila. Once a party spirit consumed by the shot in nightclubs and in margarita mixes, tequila is positioned today as a premium sipping liquor. Multinational drinks giants such as Diageo, Bacardi, Suntory and Pernod Ricard have invested billions acquiring tequila brands, building ever-larger distilleries and mechanising production processes in a bid to secure a foothold in alcohol’s next big thing. Diageo’s chief executive vowed in 2023 to take tequila global with brands like the wildly popular, George Clooney-founded Casamigos — bought out by Diageo for $1bn in 2017 — and legacy label Don Julio.
Behind tequila’s celebrity-fuelled hype is an agricultural sector strained to breaking point. Although tequila remains the world’s fastest-growing spirit, the peak growth is over, and drinkers have been cutting back on boozing. That was already particularly true in the US, tequila’s largest export market, before President Donald Trump proposed launching a trade war. While large producers with long-held relationships with the tequila houses are able to ride out the cycle, farmers without solid contracts are now desperately trying to offload their agave in a saturated market.
Agaveros, agave growers, from the Jalisco highlands have been driving down into the towns, begging distilleries to buy their piñas — the heart of the plant, which is cooked and macerated to make the juice that becomes tequila. “They were lining up, knocking at the gates,” says Guillermo Erickson Sauza, a fifth-generation producer from the historic Sauza tequila family.
Sauza’s distillery, Fortaleza, which has a cult following among American tequila connoisseurs, is in the heart of the town from which the spirit gets its name. Encircled by hills, Tequila is a tangle of low, brightly painted buildings, strung with flags and housing makeshift tourist spots. Behind high gates and colonial arches are around 20 tequila distilleries, some more than 200 years old, past which the odd pedibus carrying drunk holidaymakers jolts along.
Sauza, who cuts a distinctive figure in a rancher’s hat and biker jacket, says he was stopped in the street last year by farmers who begged him to take a truck of piñas from them each month. “That’s what it’s come down to,” he says. “They lose 10 years of their life [to the crop].”
Small farmers are already beginning to abandon the crop, burning semi-matured plants and replanting with corn. Fears are growing among the tequileros, tequila makers, that disease will spread through the abandoned fields.
This price boom and bust is not a first for the industry. Shortages in agave force the price up, which in turn incentivises more planting, resulting in an inevitable oversupply. Sauza recalls a similar situation 15 years ago. Experts say that this time, though, the scale of the boom is unprecedented. And the crisis is only set to worsen as agave planted during the boom comes to maturity.
Last month, a group of agaveros gathered to protest along the road from Guadalajara into Tequila town, temporarily blocking agave trucks. Around Jalisco, farmers have started protesting against the Tequila Regulatory Council (CRT), a regulatory body that they blame for the collapse of the price of agave.