Although much of lowland Nicaragua has a climate conducive to growing sugarcane, poor transportation has limited production to roughly the same area in northwest Nicaragua where bananas are grown. Most sugarcane is processed into whitish centrifugal sugar, the raw sugar of international commerce. Some plants further process the sugarcane into refined granulated sugar. Demand for sugar remained comparatively low until the United States-imposed embargo on Cuban sugar began in 1960. Demand then soared, and sugar production tripled over in the next two decades. Like all other agricultural products, sugar production was severely hit by the United States trade embargo on Nicaraguan products from 1985 to 1990. Production of raw sugarcane stood at 2,300 tons in 1989.

The first cattle were brought to Nicaragua by the Spanish in the 1500s, and farm animal raising was a mainstay of the early colony. Drier areas on the western slopes of the central highlands were ideal for cattle raising, and by the mid-1700s, a wealthy elite, whose income was based on farm animal raising, controlled León, Nicaragua's colonial capital. In the late 1900s, as was true in the late 1500s, cattle raising has been concentrated in the areas east of Lago de Managua. Most beef animals are improved zebu strains. Smaller herds of dairy cattle- -mostly Jersey, Guernsey, or Holstein breeds--are found near population centers. From 1979 to 1989, the total number of cattle dropped by a third because of widespread smuggling to Honduras and Costa Rica and illegal slaughter of the animals for sale of meat on the black market.