I think the key point is:
"The Army has long required Lake City’s operators to ensure the plant can produce up to 1.6 billion rounds of ammunition a year. In exchange, the contractors running the facility have been allowed to use its excess production capacity to make ammunition for sale to foreign governments, law enforcement agencies and the general public. The Army says that the arrangement saves taxpayers around $50 million a year."
It is more than likely the Mexican government bought the ammo which was then reallocated to the cartels by theft/graft.