Agricultural and livestock production value in Mexico: sources of growth, 1980-2010

Abstract

Engel's Law states that as household income increases, food demand increases accordingly. If income continues to rise, family food consumption stabilizes and an increasingly smaller proportion of income is devoted to food. When families meet their food needs, food market grows with the population, or food is exported. At this point, agricultural production units compete for market and expand their production through extensive growth: more acreage and livestock; intensive growth: higher yield per hectare and productivity per animal, and a production shift: produce more than it is worth. This research aimed to measure and show that from 1980-2010 Mexican agricultural sector has shifted from a cereal-based agriculture to one essentially based on meat, eggs, milk, vegetables and fruits production. Discrete rates were determined in the period of analysis of agricultural products to measure real income growth, area, performance, composition and price effect. For livestock products, discrete rates for real income, inventory, animal productivity and price impact were calculated. Results indicate that products with higher production growth are those with a positive trend in real income and lower risk, however grains, fodder and industrial products exhibited higher volatility.