Mexico's tequila industry is sitting on roughly 500 million liters of unsold spirit in 2026, a surplus built over a decade of agave overplanting that outran demand, according to the industry's regulatory body, the Consejo Regulador del Tequila.
That figure has circulated in trade coverage since early 2025 and sits behind a Bloomberg opinion piece published October 16, 2026, titled The Tequila Crisis and Curing Mexico's Long Hangover, which treats the glut as the comedown from a celebrity-fueled export boom. The underlying numbers are specific: agave that growers sold for 30 to 32 pesos a kilo at the 2021 peak now moves for as little as 2 to 5 pesos a kilo on the spot market, even as the CRT's own first-half 2026 tally shows production still running ahead of what the market is absorbing.
How a decade of overplanting produced the glut
The imbalance traces back to a shortage, not a surplus. Rising demand through the 2010s pushed buyers to pay premium prices for agave, and those high prices drew new growers who planted extensively across Jalisco and neighboring states. Registered agave producers climbed from 3,180 in 2014 to 42,200 by 2024, while the area under cultivation more than doubled between 2018 and 2023, according to Mexican government figures cited across trade reporting.
Agave takes roughly seven years to mature, so the plantings from that rush are only now reaching harvest age, arriving just as demand has cooled. The result has been a price collapse: agave that fetched 30 to 32 pesos a kilo at the 2021 peak is now selling for 2 to 5 pesos a kilo on the spot market, or six to eight pesos under longer-term supply contracts.
What farmers and one major producer are saying
Francisco Javier Guzman, head of the Barzón Agavero, an organization representing about 5,000 traditional growers, has said high prices during the shortage years pulled new entrants into agave farming who had no prior connection to the crop. Traditional growers are now asking buyers to pay about 60 US cents a kilo just to cover production costs, while intermediaries farmers call coyotes have been buying agave for as little as 10 US cents a kilo from growers with no other outlet.
Cristóbal Casillas Silva, director of agriculture operations at José Cuervo, told Wine-Searcher the surplus is no longer only a pricing problem. He said "three out of four plants will never be harvested" because the industry simply does not need them, and warned that agave left standing and unharvested creates conditions that favor the fungal diseases and pests already present in the region.
What the CRT's 2026 figures show
Aurelio López Rocha, president of the CRT, told the council's July 24 National Tequila Day briefing that Mexico produced 302.1 million liters of tequila in the first half of 2026, while exports reached 214.4 million liters, a 3.3 percent increase over the same period a year earlier. That production required 1.17 million metric tons of agave, and the council counted 229 authorized producers and 3,402 registered brands at the time. On an annual basis, the CRT says the agroindustry produces about 598 million liters of tequila and supports more than 100,000 direct and indirect jobs across 181 municipalities.
A separate estimate published in Forbes in January 2026 put the live surplus lower, at 100 million to 200 million liters, describing it as roughly a three-to-six-month supply that production slowdowns and short-term distilling suspensions are steadily working down. That same analysis noted that spot-market pricing does not capture the full picture, since most agave is secured through long-term contracts between growers and distillers, and that today's uneconomic spot prices are expected to push out growers who planted on speculation without contracts in place. Market researcher IWSR expects the oversupply to persist through 2030, even as the top end of the US market splits between resilient ultra-premium demand and a contracting super-premium tier.
Where new agave acreage is appearing, far from Jalisco
The long planning cycle behind the glut has not stopped new plantings elsewhere. In California, growers facing weak wine demand and water limits have begun planting agave as an alternative crop, Bloomberg has reported, even though anything grown outside Mexico's designated appellation states cannot legally be sold as tequila or mezcal under denomination-of-origin rules that confine production to Jalisco and parts of Nayarit, Michoacán, Guanajuato and Tamaulipas. Steve Vierra, a soil scientist and consultant in California wine country, has described agave there as a speculative crop, since distillers are not yet offering the pre-plant purchase contracts that growers in established crops typically rely on.
What this means
This desk will be watching whether the surplus keeps shrinking at the pace the CRT and Forbes describe, or whether cheap agave simply pulls more bulk tequila into distribution faster than drinkers can absorb it. The gap that matters most is between growers locked into long-term contracts and the speculative planters now selling into a two-peso spot market; how Mexico treats that second group, through platforms like the CRT's direct-sale tool or through tighter planting rules, looks like the real test of whether this hangover actually cures.