Sugar cane was brought to Mexico by the Spanish in 1520 and by the middle of that century sugar cane was being cultivated in the tropical Veracruz region of the country. In 1535, Rodrigo de Albornoz built the first Trapiche - sugar cane mill, in the New World in the Zempoala region. The Veracruz region of Mexico continues to produce the most sugar cane due to its proximity to the Gulf of Mexico and the warm trade winds which bring rain to the region.
By the 18th century, sugar cane was a major crop in Veracruz and rum became a national beverage. Today, Mexico is home to several rum distilleries. In addition to being bottled as rum, sugar cane distillate is also blended with tequila that is not labeled 100% agave. Today Mexico has more sugar mills than any of its Caribbean neighbors. Nearly half of the more than 60 sugar mills operating in 2008 were operating under a governement loan program. NAFTA, the North American Free Trade Agreement, was expected to stabilize sugar prices in Mexico and build exports but it allowed for the importation of corn for high pructose corn syrup production which had an adverse effect on Mexican sugar prices which were already higher than other sugar producing countries due to a lack of investment in sugar making equipment. Unlike sugar production in many other countries, Mexico's cane crop is grown on mostly small plots of cane and doesn't benefit by a large economy of scale in cultivation or transportation to the mills.