Did this decrease happen gradually or did it drop off quickly? What has been the trajectory? And is this the current state of affairs?

I believe this will continue throughout the year because one of the major players, Cuervo, is still using their own agaves. According to the latest report I saw from them, their biological assets suggest they can produce almost 60 million liters of Tequila this year. Last year, they sold approximately 95 million liters. So, they can produce more than half of this year's requirements. They're using their own agave and buying less agave at a lower price. The supply of agave is currently very high. Therefore, I think the price will stay between 15 to 18 pesos for the rest of the year. There might be a slight increase in November and December due to the end of the rainy season when other distilleries could start their production. However, I don't think the price will exceed 20 pesos. It will likely be between 15 and 18.

What are your expectations for pricing from here on out? Considering the CRT data we've both reviewed, do you think prices will drop further or will they hold at their current levels? What's the outlook?

I've been in talks with some agave producers because I also need agaves for production. They are now open to making long-term contracts, typically for five or six years, which is the normal cycle of the agaves. They are considering offering a fixed price, not a different price for each year. They haven't mentioned the price yet, but I think it will be around 14 pesos.

Let me clarify a few things. Are you suggesting that there could be a floor at 14 pesos because some producers would be content to contract at that level to secure a good supply? But if there are farmers who don't have such contracts, could the spot market price go lower?

Yes, the spot market price could indeed go lower. Just a few hours ago, I was looking at the latest inventory report from the CRT. As of the end of June, there were 1.375 billion agave plants. The largest quantities are from the years 2020, 2021, and 2022. With the current agave inventory, we have enough to produce Tequila for between 13 and 18 years, given the current agave plantations.