Weather instability in Mexico: A guide for produce businesses.

In the past few decades, Mexico’s agriculture has been greatly affected by its changing climate. The country has experienced higher temperatures, more frequent and intense weather events like droughts and floods, and altered precipitation patterns. These changes are likely due to global warming and its impact on the region.

Rising temperatures in Mexico have been a clear pattern lately. Climate change has played a part in the increase in average temperatures, which directly impacts crops. Many agricultural crops need certain temperatures to grow their best, and higher temperatures can create issues with pest and disease control, while also impacting crop yield and growth.

Another important factor has been the greater frequency of severe weather events like droughts and floods. These weather events can cause serious harm to farming, with crops ruined, agricultural structures damaged, and farmers losing money. Furthermore, these extreme events can disrupt production and hurt the country’s food security.

With respect to changes in precipitation patterns, an irregular distribution of rainfall has been observed, with periods of prolonged drought followed by intense and erratic precipitation. These alterations impact crop planning and management, as farmers must adjust to these evolving conditions to guarantee the sustainable production of agriculture.

Main climatic risks by season

Spring

Spring in Mexico is usually characterized by irregular rainfall and storms that can cause flooding and waterlogging, affecting soil quality and crop development. Additionally, high temperatures pose a threat as increased solar radiation and heat waves can lead to plant heat stress and reduced yields. This season also has the potential for extreme weather events, such as late frosts that can damage cold-tolerant crops, adding to the challenges growers face.

Summer

During this season, the biggest threat is water scarcity due to reduced rainfall and higher temperatures. When combined, this can cause droughts that decrease the amount of water available for crop irrigation, ultimately reducing yields and agricultural product quality. In addition, hot weather can cause plants to experience heat stress, impact their growth, and raise the chances of pest and disease infestations. Another critical concern is the threat of storms and hurricanes that may result in flooding and harm crops, particularly in coastal regions.

Autumn

During the fall months, the biggest danger is the fluctuation in rainfall. This season brings weather events like droughts or heavy rains, which can harm crop growth. Also, the temperature can change suddenly, with hot days and cold nights, which can stress plants and disrupt their growth cycle. Another important factor is the occurrence of extreme events, like early frosts, which could harm cold-sensitive crops and impact yields.

Winter

This season can also bring about a scarcity of rainfall, escalating the possibility of drought and water scarcities for irrigation. During winter, the primary concern is the drop in temperature, which can cause frost and freezing temperatures to damage cold-sensitive crops, delaying their growth and affecting production times and yields. Unforeseeable changes in weather and extreme occurrences, like unexpected frosts or abnormal snowfall, are posing extra complications and difficulties for farmers this season.

Historically most impacted crops

Fruits

Avocados: Is a fruit highly affected by climate change in Mexico. The most historically affected region is Michoacán, which is the main producing state in the country. The climatic events that have negatively impacted avocado production are mainly prolonged droughts and torrential rains, which affect the flowering process, pollination and fruit development.

Mangos: production of this fruit has faced serious difficulties due to extreme weather events, mainly in the states of Sinaloa and Veracruz. High temperatures and late frosts are the factors that most affect this tropical fruit, as they can damage the trees and significantly reduce production.

Strawberries: this is another fruit that is highly vulnerable to adverse weather events, especially in states such as Guanajuato and Baja California. Unexpected frosts and high temperatures can affect the quality and quantity of production, affecting the flowering and ripening of the fruit.

Apples: production has been affected in regions such as Chihuahua and Durango due to extreme weather conditions such as late frosts and hailstorms, weather events that seriously affect the production of this fruit, damaging trees and reducing fruit yields.

Oranges: these fruits are often greatly affected by abrupt weather changes, especially in states such as Veracruz and Tamaulipas, where heavy rains and hurricanes can cause flooding and directly damage the trees, affecting the production and quality of the fruit.

Vegetables

Tomatoes: This is the most widely grown vegetable in the country, and the regions most affected historically include Sinaloa and Baja California. The climatic events that have negatively impacted its production are mainly high temperatures and prolonged droughts, conditions that affect the proper development of the fruit and allow the incidence of pests and diseases.

Pumpkins: this vegetable is vulnerable to adverse climatic events in Mexico, especially in states such as Zacatecas and Guanajuato, where high temperatures and late frosts are climatic factors that negatively affect growth and development, reducing its yield and quality.

Chile peppers: The various types of chiles are important in the Mexican diet and have also been historically affected by climate change, especially in states such as Yucatán and Oaxaca, where they have experienced negative impacts on their production due to droughts and intense storms.

Onions: production has faced challenges in states such as Guanajuato and Michoacán due to adverse weather events. Late frosts and high temperatures can negatively affect onion quality and yields, posing a risk to farmers.

Carrot: this is a vegetable affected by climate change in Mexico, particularly in regions such as Puebla and State of Mexico, where extreme weather events, such as droughts and storms, can alter the proper development of carrots and affect their quality and yield.

What to expect in the future?

Mexico will encounter considerable challenges regarding the climate outlook during the following years. The primary issue is that average temperatures will go up in various regions of the country. Urbanization is one of the main causes of the temperature increase, as densely-populated urban areas generate heat islands, which boost temperatures. This could have significant effects on agriculture, especially on the availability of water resources.

Variations in rainfall patterns across the country are expected. Some regions will have less precipitation, leading to longer periods of drought and potentially limiting water availability for agriculture, industry, and human use. Meanwhile, other areas will encounter more frequent, intense rainfall and storms, increasing the risk of flooding and landslides that may jeopardize agricultural infrastructure.

Extreme weather events are expected to occur more often in Mexico in the near future. Hurricanes and tropical storms could become more frequent and destructive due to the rise of sea surface temperature. We are aware that these extreme weather conditions have devastating impacts on coastal areas and therefore, agricultural production will become more exposed.

How can ProducePay help mitigate weather-based supply chain unpredictability?

At ProducePay, we are on a mission to mitigate the volatility of the fresh produce industry and increase predictability throughout the produce supply chain. In the context of weather shocks, we offer a variety of solutions that can help mitigate challenges:

• Securing Supply
  • Spot Trading – Our spot trading solutions allow growers and buyers to react quickly when volatile weather impacts expected trades. Buyers can find new sources outside their usual programmatic trading by tapping into the ProducePay network, while growers in the network can be positioned to fill those gaps and ship more produce.
  • Programmatic Trading – By joining the ProducePay network, growers can showcase their offerings to an extensive nwtword of pre-vetted international buyers. Simultaneously, buyers can connect with a multitude of verified growers as well as gain insight into each grower’s profiles: commodity offers, availability, certifications, and more. This creates new opportunities to build long-term relationships and grow business.
  • Quality Visibility – Through ProducePay’s Quality Visibility capabilities, growers and buyers gain access to advanced quality monitoring and control throughout the supply chain stages, providing transparency to all parties, reducing rejection rates and costs, and ensuring on-time and in-full delivery of high quality produce.
• Quick-Pay Financing – Our flexible funding enables growers and buyers to optimize their cash flow based on their needs. If bad weather causes harvest to get pushed out and Growers need to bridge the cash flow gap, we can provide the capital they need. Additionally, buyers can leverage Quick-Pay to pay their growers faster while retaining the flexibility of their usual terms, giving them a competitive edge when securing supply.

Pre-Season Financing – By providing growers with working capital – up to $30M in as little as 30 days – we enable them to invest where their farm needs it most. They can use the capital to recover from weather damage; they can invest in operational efficiency through proper drainage systems or another technology; they can drive sustainability practices with renewable energy systems – or any other operational need.

Sources: Conagua, Conagua, Conagua, Scielo, Cambio Climático, Agricultura, Agricultura, IADB