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Facing challenges, N.M. chile industry hangs on

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LAS CRUCES – In the early 1990s, chile was king in New Mexico.

The state’s favorite crop, in its many varieties, hit an all-time high in 1992 of 34,500 acres harvested. But that was before a landmark international free-trade agreement, NAFTA, took effect, gradually slashing tariffs on products moving between the United States and its closest neighbors.

New Mexico chile farmers and experts recall that the state’s once-robust jalapeño industry took a sharp nosedive in the late ’90s, as farming of the crop shifted to Mexico. Some of the fresh green-chile farming, too, followed, though the decline hasn’t been as severe, experts said.

About a decade ago, chile’s future in New Mexico seemed especially bleak, said Stephanie Walker, Cooperative Extension specialist at New Mexico State University.

“We had chile flooding the market from all parts of the world,” she said. “Those were probably the darkest days.”

Other competitors, such as China, ramped up farming of red chile, which has a much longer shelf life and hence can be shipped farther than green chile with no problems, experts said.

The declining acreage in New Mexico continued throughout the 2000s. Last year, acreage harvested totaled about 9,600 – about a 70 percent drop from the record high.

But some experts and farmers say the industry appears to have stabilized in recent years and may even be on the uptick. Still, some farmers of the crop said they still face a spectrum of hurdles, such as a shrinking pool of field laborers and continued pressure from foreign competitors, that create uncertainty about the future.

Hatch-area grower Jerry Franzoy said stricter immigration enforcement by federal authorities has cut down on the number of Mexican immigrants who cross into the United States and get residency status – a pool of workers farmers have relied upon for labor-intensive chile crops. Franzoy said the shortage is worse this year for the chile harvest because onion harvesting has gone longer than usual.

“We’re starting to feel it more and more,” he said. “If something doesn’t happen soon, we’re going to be in trouble for picking chile,” he said.

There are fewer workers interested, as well, said Chris Biad, who farms chile in Las Cruces and Hatch and owns a frozen-chile packaging facility in Mesilla Park. He’s shifting his plant toward more machinery, such as automated roasting equipment he’s trying out for the first time this year.

“Really, the people here don’t want to do it,” he said. “That’s why we’re trying to automate as much as possible.”

Walker said finding labor was a bigger problem in the mid-2000s, when housing construction was competing with agriculture for employees.

“In recent years, with construction down and all, growers have been able to get the labor they need, but, with the economy picking up, that may become a problem again,” she said. Hatch chile farmer Scott Adams said its tough to compete with other countries’ low labor wages. In Mexico, a field worker can get dollars per day, while in the U.S., minimum wage applies. Also, a series of other federal and state rules ultimately add to the cost of producing the crop.

“Canneries want to buy it from the American producer because they know it’s a safer product,” he said. “But when they pay half as much in Mexico as they do here, how can we compete with that?”

While chile acreage farmed in the state is an indicator of the industry’s overall health, it’s not the only one.

For instance, while acreage has declined, advances in technology and farming have prompted the amount of chile produced per acre to increase, noted James Libbin, an NMSU agriculture economics expert who belonged to a state panel in the early 2000s that was looking at ways to boost the crop.

Another key point, Libbin said, is that, economically, chile-processing plants pack a bigger punch than fresh chile-pepper sales. Salsa and enchilada sauce, for instance, have a much longer shelf life – and potential for sale – than fresh chile, which is perishable.

And the New Mexico-based processing companies need to buy certain benchmark levels of chile from not only within the state, but also the surrounding region, to stay in business, said Libbin, now an associate dean at NMSU. Because of that, chile grown in West Texas, eastern Arizona and northern Mexico contributes to New Mexico’s industry, he said. Worrying that it’s not all farmed within the state is short-sighted, he said, because the region is interconnected.

“It’s really all part of the big system,” he said.

Competition from farther abroad, however, is problematic, Libbin said.

Notable about the industry is that it has several facets, and the competition from foreign growers is different for each of them, said Marvin Clary, agronomist with the Deming-based Border Foods, which bills itself as the world’s largest green-chile processor and the U.S.’s largest jalapeño processor.

“We don’t have near the pressure as paprika and reds,” he said, referring to two other chile crop specialities.

Green-chile acreage seems fairly stable now in New Mexico, Clary said.

Clary noted that, while the jalapeño farming did shift to Mexico after NAFTA, the processing of those peppers stayed in New Mexico.

“We buy jalapeños there, but we process them here, so we’re still creating a lot of jobs,” he said.

The company has continued to buy its green chile from New Mexico growers for several reasons, Clary said. One of those is the possible time delays in crossing the international border, which could damage freshly harvested chile pods, he said. “You’re never quite sure what’s going to happen at the port,” he said. “It’s a risk to the grower and the company. So, it puts pressure to keep it (farming) here.”

For more-durable jalapeños, the border waits pose less of a problem, Clary said.

Because the fresh chile is only a small portion of the chile that’s sold in New Mexico, Libbin said residents should expect to always be able to buy peppers grown in the state.

“I don’t think there’s any danger of never finding fresh green and fresh red chile in southern New Mexico stores,” he said.

Something working in favor of New Mexico’s industry is that consumer demand for chile remains strong, experts said.

And Walker said that a chile advertising law passed in recent years by the Legislature, which prevents false branding of products within the state, seems to be helping boost demand for New Mexico chile in particular. In addition, progress is being made on an automated de-stemmer, a machine to take off chile stems that would take over a job now done by harvesters in the field, Walker said. Cayenne peppers, green chile and some red chile would benefit from that.

Without a de-stemmer, another advance that’s being worked on — a mechanical harvester for green chile — isn’t worthwhile, Walker said.

Libbin acknowledged there is a possibility that New Mexico’s industry could further decline, depending on whether and how the challenges are resolved.

“It’s still concerning, but it’s not a panic,” Libbin said.

Walker said she’s “optimistic” about the future, given recent strides.

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