The Southwest chile pepper industry is at a major crossroads and time will determine if mechanization and other advances will help save the industry hit hard by foreign competition.
“Our challenges as the (New Mexico) chile industry all revolve around labor,” said Dino Cervantes, treasurer, New Mexico Chile Association (NMCA). “Our foreign competitors have a huge advantage over us in terms of (lower-priced) hand labor costs. Until we have mechanization, foreign producers will have an advantage over us.”
Cervantes is a partner in the family-owned Cervantes Enterprises in La Mesa, N.M. He discussed pepper issues during the 20th International Pepper Conference in Las Cruces, N.M., in September. About 150 pepper researchers, processors, growers, and other industry representatives from 20 states and 12 countries attended the event.
About 80 percent of the chile peppers consumed in the United States are imported, largely due to lower hand labor costs.
China produces more than 50 percent of the world’s supply of all types of peppers – about 14 million metric tons annually. Mexico is the second largest producer followed by Indonesia, Turkey, Spain and the United States. California is the largest all-pepper producer in the U.S. with about 320,000 metric tons annually.
New Mexico is the nation’s largest chile pepper grower, followed by California, Arizona and Texas.
Plummeting New Mexico acreage
In the last 20 years, New Mexico chile acreage has plummeted by about two-thirds – from about from 35,000 acres in the early 1990s to about 12,300 acres today, according to the National Agricultural Statistics Service.
“This acreage reduction corresponds to the North American Free Trade Agreement which caused a lot of production to move to Mexico,” said Ed Hughs, research leader with the USDA’s Agricultural Research Service (ARS).
Hughs is based at the Southwest Cotton Ginning Research Laboratory in Mesilla Park, N.M. He delivered a presentation prepared by the ARS’ Paul Funk.
“Mechanization is an absolute necessity,” Hughs said. “Our harvest costs can be 50 percent of the total production costs. We can compete in land, fertilizer, and other costs except labor, which can be six to 30 times higher than other countries. Mechanization is a labor-saving way to keep the producer in business and the industry healthy.”
About 100 percent of U.S. red chile and paprika peppers are currently mechanically harvested, along with about 90 percent of the jalapeno crop. Hughs says the major need for mechanization is in fresh market and fresh-for-frozen green peppers which are almost all hand harvested.
More than 200 mechanical harvesters have been developed and tested around the world. Green chile is still mostly picked by hand due to harvester damage to the pod and the need to de-stem the pod for the whole green chile market.
In 2008, the Southwestern Cotton Ginning Research Laboratory and NMSU evaluated five harvester designs in a field with five green chile varieties.