Mexican imports a boost to Southwest economy

For more than a decade, the Southwest has shown substantial economic growth directly related to the importation of fruits and vegetables from Mexico, and that growth is expected to be even more sizable over the next decade or so.

At least that is the view garnered from a report issued by the Center for North American Studies at Texas A&M University. Each year, the center creates the report at the behest of the Texas International Produce Association. Brett Erickson, president and chief executive officer of TIPA, told The Produce News that the report quantifies the importation of fresh produce and other products and puts a dollar value on its impact.Bret-EricksonBrett Erickson

This year’s report, by virtue of the calendar, is the mid-point between the baseline year of 2007 and the forecasted projection in 2025. A graphing of the information shows an unmistakable trend of increased imports and increased value to the economic conditions in the Southwest.

“The economic impacts of U.S. produce imports from Mexico on southwestern land ports of entry are substantial, expected to total $1.62 billion by 2025 as these imports continue to grow over the next five to seven years,” concluded the study. “Additional employment will occur as 13,241 jobs will be required to support this increase in economic activity.”

With its Texas-centric focus, the report noted that in Texas alone, “the total economic activity to support the additional imports will be $794.4 million, along with 7,357 jobs.”

For 2016, the newest actual numbers in the report, the researchers found that the United States imported more than $12 billion of produce and products from Mexico during 2016, including fresh, frozen and processed fruits, vegetables and nuts. About 98 percent of these imports entered the United States by land ports of entry on the southern border in the states of Texas, New Mexico, Arizona and California. The report determined that about 90 percent of these imports are fresh fruits and vegetables, representing a total of $10.67 billion of value.

Using 40,000-pound equivalents as the average weight of a truckload, it was estimated that these shipments represent more than 463,000 truckloads. Texas has been the leading port of entry for the past six years and is expected to maintain the No. 1 slot through the furthest projection year of 2025. In fact, each year it is solidifying its hold on first place.  

When the survey began in 2007, a total of about 261,000 truckloads of product came from Mexico into the United States through those four states. Arizona accounted for around 112,000 loads while Texas chipped in with about 101,000. California added 43,000 loads and New Mexico contributed 4,378 truckloads. Arizona’s market share was 43 percent followed by Texas’ 39 percent.

In 2016, 222,000 loads came in to the United States through a Texas port representing about 48 percent of the shipments. Arizona’s 161,000 loads represented another 35 percent. California accounted for 68,000 truckloads, representing 15 percent. New Mexico, of course, lags behind but its 18,500 loads in 2016 represented a 400 percent increase in a decade.

Projecting forward, the researchers predicted that in 2025, 688,000 loads would come through the four states with Texas’ share approaching 350,000 loads, which would be more than 50 percent of the total.

To reach this projection, the researchers used what they called “a linear trend forecasting approach,” which basically uses past performance to gauge future results. They called it a “conservative approach” as no significant changes were included in the calculations. They referred to this projection as their “baseline forecast.”

The researchers said other potential impacts, such as rising U.S. interest rates and the improvement of the transcontinental highway in Mexico, could result in even more shipments.

Turning to the economic factor, the report noted that when considering the entire U.S.-Mexico border region of Texas, New Mexico, Arizona and California, there was a minimum of $516.2 million of direct economic output attributed to produce imports from Mexico during 2016.

In the next nine years, this number is projected to grow to $766.2 million, with warehousing at $268.5 million and truck transportation at $206.5 million, being the top two U.S. industry sectors benefiting most directly by the imports.

Other industries showing a direct benefit are sorting, grading and packing ($131.2 million), customs brokering ($103.3 million) and miscellaneous border services ($56.8 million).

Of course, the researchers found an indirect benefit in other economic activity from supporting industries totaling an additional $853.4 million, resulting in a total economic impact of $1.62 billion. Leading supporting industries include real estate with $119.3 million in increased economic activity, business services ($93.5 million), energy ($89.1 million), financial services ($76.9 million), health care ($60.4 million), wholesaling ($39.6 million), retail ($34.6 million), food and drinking businesses ($33.1 million), and other transportation ($30.8 million).

Ominously, the report concluded that any “delays, disruptions or related barriers to entry of fresh produce causes a ripple effect in terms of economic and employment losses across a wide spectrum of regional economies.”

Boosting apple sales with tropical flavors
Stemilt is ready to help retailers rock their apple category by providing high-quality, flavorful Pinata apples for the summer season. Stemilt’s senior marketing manager, Brianna Shales, believes Piñata apples are exactly what consumers need who want to eat healthier, cook more at home or those who want to snack on an Read More ...
Winn-Dixie expanding with eight new stores
Winn-Dixie will expand in Florida with the addition of eight new Winn-Dixie stores before the end of the year. Southeastern Grocers, Winn-Dixie's parent company, finalized agreements to purchase multiple Lucky’s Market locations and Earth Fare grocery stores throughout the state of Florida. The grocer has acquired four Read More ...
Sunkist celebrates the return of Valencia oranges, summer citrus
Sunkist Growers is transitioning into summer citrus, as most winter citrus varieties wind down. To celebrate the return of the summer season and Valencia oranges, Sunkist is launching a new campaign speaking to "the all-American summer," the fruit's immune-boosting qualities, and juicing nostalgia. In the past several Read More ...
Intergrow partnership to reduce food waste
Consumer’s have high expectations when it comes to their food. Even in produce, they expect beautifully uniformed, well presenting fruit. But at the end of the day this is farming and it is not realistic that every piece of fruit we produce to meet those requirements. Even with the strictest growing and packing practices, Read More ...
Giumarra introduces trio of premium nectarine brands
New for the 2020 California stone fruit season, the Giumarra Cos. introduces a trio of premium nectarine offerings under its DulceVida brand umbrella: Midnight Edition, Twilight Edition, and Sunrise Edition. Midnight Edition and Twilight Edition will kick off the season with first shipments beginning the week of June 15, Read More ...
Mother Earth boosts conventional mushrooms
With 53 growing houses throughout southern Chester County in West Grove, Oxford, and Landenberg, PA, Mother Earth LLC continues its strong legacy in the organic mushroom industry. Like most in the produce industry, they have been adjusting to the new normal brought on by the coronavirus. “It’s been an interesting time,” said Read More ...

Market Watch

the source pro-act

Western growing regions getting hit by rain, cooler temps

floral pulse