Why Food Will Always Be Cheaper in Mexico
What is the Cánasta Basica?
Tomatillos - usually on the list
Many aspects of life in Mexico don’t make sense to a newcomer. However, in creating a personal inventory of things that do make sense, two things come to mind immediately: 1) price tags that are the real price of the item, taxes are included and 2) Mexico’s Cánasta Basica.
The Cánasta Basica is a list of foods and items that are considered essential to the average Mexican family. As such, prices for these goods are fixed by the government. To determine what food items are included, the government factors in the number of family members, average salaries, and in the case of food, food nutrients, availability, and calories.
To be precise, there isn’t a single Canasta Básica but rather various ones, as the list is based on regional surveys of the population. The list varies according to what region you live in and what entity administers it.
Foods usually found on the Cánasta Básica
Tomatoes, chiles, limes, avocados, onions, potatoes, oranges, rice, tortillas, milk, bread, eggs, beans, beer, soap, cooking oil, corn, cucumbers, lettuce, canned tuna, sugar, flour, cornmeal, peas, wheat flour, coffee, table salt, eggs, oatmeal, baby food, oranges, peas, sardines, cocoa powder, toilet paper, cookies (one brand, a cracker-like cookie), pasta for soups, broth bullion, and tomatillos (a type of green tomato).
Recently added to some regions’ lists are beef, chicken, dried fish, purified water, dehydrated jicama, garbanzo beans, fruits and vegetables according to the region, Jello, peanuts, sesame, amaranth, and chia. The number of foods included on the list has been rising in recent years. The prices of many of them were decreasing before the pandemic interrupted the global food supply chain.
In addition to basic foodstuffs, the Cánasta Basica includes non-food items like batteries, razors and razor blades, home cleaning supplies, children’s schools supplies, personal hygene items like deodorants, toothpaste, floss, medicines for the flu, allergies, heart conditions and diabetes. Some regions include bicycles, natural gas and televisions.
The rising price of food during the pandemic
As widely reported by major media outlets, globally, food prices have shot up in the U.S. due to disruptions in the food supply chain due to the pandemic. The price consumers paid for groceries in the U.S. jumped 2.6% in April compared to the previous month, the largest monthly increase since 1974, according to statistics released Tuesday by the U.S. Department of Labor.
These global events are being felt in Mexico to some degree, notably on chicken breasts, eggs, black beans and rice. So far these increases have barely affected shoppers. The Canasta Basica came into existence when riots occurred after the prices of tortillas rose and workers took to the streets. Given that history, it’s unlikely the prices on certain staple foods will ever be high.
The most favorable exchange rate for expats in years
Most expats still keep most of their money in U.S. banks. Another factor working in your favor as an expat in Mexico is the exchange rate, which has been favorable for years and downright outrageous recently. The dollar presently exchanges at 23.8 pesos to the dollar, by far the highest rate of exchange that I have experienced since moving to Mexico in 2014.
Calabacitas - a typical Mexican dish of zucchini and corn.
Let’s say, for example, you use a credit card with no foreign transaction fees to purchase 2,500 pesos worth of groceries at the more normal rate of 18 pesos to the dollar, the charge to your credit card would be $138 dollars. At the present exchange rate of 23 pesos the dollar, the charge to your credit card charge would be $108 dollars.
The favorable exchange rate reduces the amount of money you need to withdraw from your U.S. bank for you spend for anything you pay for in pesos, such as electric bills, clothing and entertainment. Sometimes landlords quote and ask for rent in dollars rather than pesos for exactly this reason. Still, Mexico remains largely a cash country and most of your purchases will be made in pesos. The savings add up.
Cooking in Mexico is simpler and cheaper
Many ingredients that you are used to using in your recipes at home are not available in Mexico. This makes cooking easier and cheaper, with less waste because daily dishes common to Mexican cooking call for the same ingredients.
As you will find in my upcoming book, The Lazy Expat: Healthy Recipes That Translate in Mexico, locally-sourced recipes capitalize on items such as fresh pineapple, mangoes, avocados, zucchini, and limes, all of which are very inexpensive in Mexico.
My grocery bill has always been at least 30% and often 50% l lower in Mexico than my bill in the U.S. If one shops in open markets (I shop at larger Mexican chains), is vigilant, and shops like a native, especially in terms of not buying imported goods, likely you can reduce your bill by half.
Prices for food have consistently risen in the U.S., even when factoring in inflation. Purchasing food in Mexico will never come close to what we pay, and will pay in the future, for food. Cheaper food, housing, healthcare - the biggest expenses you have in retirement, certainly strengthen the case for why Mexico makes so much sense.
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About the author:
Kerry Baker is the author of four books for expats and aspiring expats. The first was the Interactive Guide to Learning Spanish Free Online, which is currently being updated. The second book is If I Only Had a Place, a book on renting the most attractive places for much less. The Mexican Solution: Saving your money, sanity, and quality of life through part-time life in Mexico,” is both a how-to and a book that will give you insight as to what to expect from Mexico as a culture.
The Lazy Expat: Healthy Recipes that Translate to Mexico contains 150 healthy, easy to prepare recipes for 2-4 people than can be prepared in a simple kitchen in both the U.S. and Mexico.