Drought and Agricultural Prices in Mexico

Introduction : This study investigates the relationship between meteorological conditions and agricultural economics in Mexico from 1988 to 2024, with a focus on the impact of drought conditions measured by the Standard Precipitation Index (SPI) on agricultural prices, as indicated by the Agricultural Consumer Price Index (Agro CPI). Methods : Using SPI values over one-month and 24-month periods, we conducted a cluster analysis to examine how precipitation variability affects agricultural prices. The Hierarchical Density-Based Spatial Clustering of Applications with Noise (HDBSCAN) was employed for this analysis due to its efficiency with large datasets and minimal parameter requirements. Results : The analysis revealed a significant negative correlation between prolonged drought periods and Agro CPI, especially in drought-prone clusters. The study found that the effects of drought on agricultural prices are cumulative, with the full impact appearing over successive growing seasons. The 24-month SPI was determined to be a better predictor of the long-term effects of drought on Agro CPI than the one-month SPI. Conclusion : These findings underscore the importance of considering long-term drought impacts in agricultural planning and market forecasting, highlighting critical insights for policymakers and stakeholders involved in agriculture and food security.