By WILLIAM PACK
Aug. 13, 2011, 12:52AM
SAN ANTONIO — Business is booming in the Rio Grande Valley as a result of soaring traffic in fruits and vegetables from Mexico, an increasingly sophisticated produce powerhouse that exports more fruits and vegetables to the United States than any other country.
“There is a boom. There are a lot of companies coming every week to the area,” said Joaquin Spamer, president of Colimar International Logistics, a Mission company that is expanding its cooling capacity to accommodate the increased amount of produce now coming across the border. “I think this is just the beginning.”
Mexico exported $6.4 billion worth of fresh or frozen fruits and vegetables into the U.S. last year, according to the U.S. Department of Agriculture. That was 46 percent of all the fruits and vegetables exported to the U.S. and more than three times the amount shipped from the nation’s second-leading fruit and vegetable source, Canada.
Already, the USDA figures the total value of fresh fruit and vegetable exports from Mexico grew slightly in the first five months of this year compared with the same period in 2010. The total through May was nearly $3.6 billion.
“Those people put a lot of food on our table in this country,” Pharr Mayor Leo Palacios Jr. said. “I never thought it was going to grow this big.”
More Texas producers, too, are growing their crops in Mexico to feed a voracious year-round market for fruits and vegetables in the U.S.
“Mexico can produce when the U.S. cannot,” said Curtis DeBerry, president of Progreso Produce, a Boerne-based company that expanded production into Tampico almost 30 years ago and now grows 60 percent to 70 percent of its fruits and vegetables in several Mexican states.
“Consumers want the freshest produce they can get year-round. It’s supposed to be there every day of the year,” DeBerry said.
While Arizona’s ports have been the leading entryways for Mexican produce in the past, Texas’ string of border crossings has claimed the top spot this year, according to the Texas Produce Association and the USDA.
USDA data through June shows that 3.8 billion pounds of produce moved through Texas ports from Mexico, about 170 million pounds more than Arizona’s ports. Last year, Arizona’s ports were the leaders in produce imports with 5.4 billion pounds, almost 120 million pounds more than Texas.
Rising diesel costs
High diesel costs are forcing shippers to be more efficient, and a soon-to-be completed Mexican highway across the treacherous Sierra Madre Mountains between Mazatlán and Durango will make it easier for Mexican produce to move east out of lush growing regions on Mexico’s west coast. Both factors could drive more traffic through Texas, officials said.
“If you ship produce from Mexico and want to go to Chicago or the East Coast, you can save $1,000 to $2,000 in diesel costs by coming through Texas,” said John McClung, Texas Produce Association president. “It’s become easier and cheaper to come to Texas.”
The new highway, which is scheduled for completion next year, could bring twice as much produce to Texas ports, Colimar’s Spamer said.
“It’s a matter of logistics and money saved,” he said. “It’s going to change things quite a bit.”
Guillermo Nunez, executive director of an association representing importers of Mexican agricultural products into Texas, said hundreds of jobs should be added as transportation companies, cold storage providers and customs brokers expand to handle the new traffic.
Keeping it cold
Already, cold storage facilities and cooling units that keep perishable fruits and vegetables fresh until they are picked up and distributed by U.S. customers are expanding in the Valley.
Loop Cold Storage in McAllen, for instance, has expanded its cooling capacity for three straight years, including the addition of 50,000 square feet of cooler space this summer.
In nearby Edinburg, Don Hugo Produce is constructing a 227,000-square-foot refrigerated warehouse that could create 200 jobs.
The city of Pharr, meanwhile, is adding cold storage units and contemplating more improvements at the bustling Pharr-Reynosa International Bridge, Texas’ busiest entryway for Mexican produce.
Over the years, producers like Boerne’s Progreso have found that Mexico offers more water, lower costs and more opportunities for success in agriculture. Many Texas growers have shifted at least a portion of their production into Mexico, and other U.S. companies pay Mexican growers for crops.
Sent onward from Texas
McClung said that while Texas traditionally is a leading exporter of fruit and vegetables to the rest of the U.S., about 60 percent of the produce it exports is grown in Mexico.
“The U.S. industry has moved the garden across the river,” McClung said. “Mexico has so many microclimates, they can produce pretty much any fruit and vegetable in some areas.”
Fruits like mangoes and grapes are produced in Mexico into the summer, but the industry’s busiest season is in the cold months from October to about May, when the U.S. cannot produce many fruits or vegetables.
One San Antonio-based company, formerly known as Desert Glory but now operating as NatureSweet Ltd., grows tomatoes in more than 1,000 acres of greenhouses near Guadalajara and distributes them across North America.
Bobby Patton, NatureSweet’s vice president for marketing, said Mexico provides the growing conditions that allow the company to produce high-quality tomatoes throughout the year.
The company has become accustomed to double-digit growth, Patton said, and it’s on track to do that again this year.
Mexico’s drug violence has produced changes. Some produce handlers travel in truck caravans through the most hazardous areas or avoid certain roads. A Christian Science Monitor report this year said Mexican lime producers in the state of Michoacán paid off local drug gangs so their produce could be shipped safely.
“It’s changed the way business is conducted, but it has not changed the trends in volumes,” McClung said. “People are a lot more cautious than they used to be on both sides of the border.”
The sector faces other challenges, like food safety regulations in the U.S. and staffing shortages at checkpoints that back up fruits and vegetables at the border for hours. Such delays can jeopardize contracts with some leading U.S. retailers that are strict about on-time delivery.
Jaime Chamberlain, president of J-C Distributing in Nogales, Ariz., and chairman of the Fresh Produce Association of the Americas, said he is concerned possible spending cuts for the USDA and related agencies could hurt trade. But consumers are hungry for fruits and vegetables. The produce trade with Mexico should continue to prosper as a result, Chamberlain said. “I don’t see anything really dampening our progress at all,” he said