Agave Growth and Harvesting
07. Agave Supply & Sustainability
Agave Futures: Addressing Shortages, Availability & Sustainability
One of the tequila industry’s main challenges is ensuring a steady crop of agave for use in production. Throughout history farmers have endured alternating periods of abundance and shortage; this happens often due to a lack of information about market demand, paired with the long-life cycle of the plant itself. Because agave plants take years to mature, growers often plant when the price is high, without realizing that the real price they will obtain is 6 – 7 years later when their agave is ready to be harvested. If the price is high when planting, growers will over-plant, expecting to command that high price. Instead, the abundance of agave will drive prices down, kickstarting an opposite loop in the cycle of under-planting for the next crop.
This cycle of abundance and shortage, which many say happens about every 10 – 15 years, creates imbalances in the agave supply/demand that at times seems insurmountable when every year the industry requires millions of plants for tequila production. To create a more balanced system, agave growers should consider certain factors with long-term growth in mind:
- What will the demand be in 6 years? Will the popularity of tequila continue to rise, remain the same, or decrease?
- What are the possible losses, either by natural disasters, the requirements of other industries (i.e., agave nectar), or diseases?
- How productive will the industry be?
- Will the price of agave be attractive to businesses in 6 years?
With more data and more transparency, the industry can insulate itself against swings in supply and demand, and stabilize pricing. Currently, the agave industry, through the Tequila Regulatory Council and the Tequila Chamber is in the process of:
- Gathering information and making forecasts
- Creating models of supply-demand
- Following the other uses of agave (syrup, inulin, energy, etc.)
- Determining agave needs for each year and making that information public to aid growers in their decision making
Spotlight: Patrón Agave Farming Partner.
Most agave production for Patrón is contracted with eight primary farming families who grow agave in the Altos region or in nearby areas that produce agaves with similar characteristics. These expert growers have generations of experience and a long history with the Patrón brand. Half of them — the Lozanos, the Vázquezes, the Padillas, and the Hernandezes — have been with Patrón since we began production at the Hacienda distillery.
As part of their agreement with Patrón, farmers agree to plant a certain number of plants each year and Patrón guarantees to pay a minimum price for the plants when they’re harvested. The contracts are typically drafted year by year based on business forecasts. By guaranteeing a market and price for their agave, Patrón is ensuring that their partner farmers have income stability and are able to continue to plant and plan into the future, which means in the event there’s more agave than demand, the farmers are still guaranteed a profitable price as part of their contract. For Patrón, these long-term contracts ensure a steady supply of quality agave for years to come.
agave cycles
markets
