Quick answer: Agave prices collapsed because growers planted heavily during the 2018 to 2021 boom, and those plants matured just as tequila demand stopped growing. Mexico's president said on October 16, 2026 that the crop "has a problem," with prices falling from roughly 30 to 35 pesos a kilo to between 1 and 6. For drinkers, cheaper agave does not automatically mean cheaper or better tequila. Maturity, cooking, extraction and distillation still decide what is in the glass.
Our pick in a glut market: Don Londrés. Cheap agave changes nothing about how we make it: single-estate agave harvested at 7 to 10 years, cooked in brick ovens for 48+ hours, naturally fermented and distilled twice in pot stills, with nothing added beyond agave and time. That is the checklist this article recommends, and you can verify every step. See Don Londrés Blanco. Yes, we make it.
What actually happened to agave prices
At the 2021 peak, agave sold for about 30 to 35 pesos per kilo, according to President Claudia Sheinbaum, who spoke about it at her October 16, 2026 morning press conference (Infobae). She cited current prices of six pesos, four pesos and in some zones even one peso. Trade reporting puts spot prices at 2 to 5 pesos and longer-term contracts at 6 to 8 pesos (Tequila Watch).
Her explanation was simple. Tequila consumption rose during the pandemic, the industry asked for more raw material, and agave was planted well beyond the traditional zones. Agave takes six to eight years to mature, so by the time the plants were ready, demand had flattened and then slipped.
Sheinbaum said her government is preparing a "proyecto integral" through the Agriculture Ministry. No funding, mechanism or date has been announced yet.
Why a seven-year crop makes a boom-and-bust cycle
Agave cannot be adjusted year to year the way corn or wheat can. A grower who planted in 2019 could not know what 2026 demand would look like, and a plant cannot be paused. Tequila Watch reports that registered agave producers grew from 3,180 in 2014 to 42,200 in 2024, and that planted area more than doubled between 2018 and 2023.
The shortage years of 2018 to 2021 sent prices sky high and pulled in new growers, many with no prior history with the crop. Francisco Javier Guzmán, who leads the Barzón Agavero grower group of roughly 5,000 traditional farmers, described exactly that to reporters. Growers say they need about 60 U.S. cents per kilo to cover costs, while intermediaries known as coyotes have paid as little as 10 cents.
Some of the stress shows up at harvest. Cristóbal Casillas Silva of José Cuervo told Wine-Searcher that "three out of four plants will never be harvested," and warned unharvested fields can invite fungal disease and pests. Producers have also warned that up to 5 million plants could be lost without buyers, a figure Sheinbaum did not confirm.
How big is the surplus? The numbers disagree
You will see "500 million liters of unsold tequila" repeated across trade coverage, attributed to the Consejo Regulador del Tequila. Forbes estimated in January 2026 that the live surplus was closer to 100 to 200 million liters, or three to six months of supply. IWSR expects oversupply to persist through 2030, per Tequila Watch.
The honest read is that nobody outside the industry has a clean, audited number. There is no official surplus figure from the government either. For hard production data, the Consejo Regulador del Tequila is the source to check. At its July 24 briefing, CRT president Aurelio López Rocha reported first-half 2026 production of 302.1 million liters and exports of 214.4 million liters, up 3.3% year over year, with 1.17 million metric tons of agave used (via Tequila Watch). For the wider picture, see our guide to tequila by the numbers in 2026.
Does cheap agave make cheaper tequila?
Not directly, and not quickly. Agave is one cost in a bottle. The rest includes glass, labor, fuel, freight, tariffs, distributor and retailer margins, and marketing. A drop in raw material cost can widen a producer's margin without ever reaching the shelf.
It also does not change how much work good tequila takes. Mature agave still needs to be cooked slowly, extracted, fermented and distilled with care. The table below separates what the glut changes from what it leaves alone.
| Factor | Changed by the glut? | Why it matters in the glass |
|---|---|---|
| Price paid for raw agave | Yes, sharply | Hurts growers, may lower producer costs |
| Agave maturity at harvest | No | Mature plants carry more sugar and character |
| Cooking method (brick oven, autoclave, diffuser) | No | Shapes sweetness, body and flavor |
| Extraction (tahona, roller mill, diffuser) | No | Affects texture and agave expression |
| Distillation (pot still vs column) | No | Affects richness and finish |
| Retail shelf price | Not necessarily | Includes many costs beyond agave |
If you want to go deeper on the middle rows, we break them down in Tahona vs. Roller Mill vs. Diffuser and How Is Tequila Made?
What this means when you are shopping
A glut tends to reward producers with cash and scale, and put pressure on small farms and on any brand cutting corners. Here is how to read a label and a price in this market.
First, look for what the brand says about agave age and source. "Mature" should be backed by a number or a method. Second, look for how it was cooked and extracted, and whether the brand tells you. Third, treat a very low price with caution. A bottle priced far below its peers may have saved money somewhere other than agave. Our guide to what makes a tequila premium walks through the checklist.
Full disclosure: we make Don Londrés. We use mature single-estate agave harvested at 7 to 10 years, cook it in brick ovens for 48 hours or more, ferment naturally, and distill twice in pot stills in Atotonilco El Alto, Jalisco. There is nothing added beyond agave and time. We are not telling you our approach is the only good one, only that it is specific and you can check it. Terroir matters too, and our Highlands vs. Lowlands guide shows how.
What to watch next
Three things will tell you how this plays out. First, whether the government plan includes price floors, purchase programs or support for growers, and when. Second, whether big producers pause buying from November to February, which growers say is common. Third, whether CRT production and export data keep growing while domestic agave stays cheap. Those numbers will show if the market is rebalancing or just absorbing the pain.
Frequently asked questions
Why did agave prices drop so much in 2026?
Heavy planting during the 2018 to 2021 shortage produced a large crop that matured as demand flattened. Agave takes six to eight years to ripen, so growers could not react in time.
How low is the agave price now?
President Sheinbaum cited prices of one to six pesos per kilo on October 16, 2026, down from roughly 30 to 35 pesos at the peak. Trade reports put spot prices at 2 to 5 pesos and contract prices at 6 to 8.
Will tequila get cheaper because of the agave glut?
Not necessarily. Raw agave is only one part of a bottle's cost, and lower input costs do not always pass through to shelf prices.
Is there really 500 million liters of surplus tequila?
That figure is widely repeated and attributed to the Consejo Regulador del Tequila, but estimates vary. Forbes put the live surplus at 100 to 200 million liters in January 2026, and there is no audited public number.
Does cheap agave mean worse tequila?
No. Quality depends on maturity, cooking, extraction and distillation. Cheap agave is a market condition, not a flavor. What to check is how a brand makes its tequila.
Is this a good time to buy premium tequila?
Quality is set by how a bottle is made, not by the agave market. Compare brands on agave age, cooking and distillation rather than on price alone, and check our tequila FAQ if you want a primer. You can also see where Don Londrés is sold.
Sources
- Infobae, October 16, 2026
- Mexican Times, October 16, 2026
- Tequila Watch, October 16, 2026
- Consejo Regulador del Tequila
Keep reading: Tequila by the Numbers 2026, How Is Tequila Made?, What Makes a Tequila Premium
Last reviewed October 2026 by the Don Londrés team.