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Produce Imports from Mexico on the Rise: An Interview with Bret Erickson, TIPA President and CEO
Business is booming in the Rio Grande Valley region of Texas as a result of soaring traffic in fruits and vegetables being imported from Mexico. In fact, for seven out of the past eight years, the area has experienced double-digit increase in total volume of fresh produce coming in from the south.
To adjust to the new business dynamic and change with the market, the Texas Produce Association, formed in 1942 to represent the business, economic and political interests of Texas-grown fruits and vegetables, adopted a new name that was more inclusive of the growing demand for Mexican produce: Texas International Produce Association (TIPA).
“Year after year we found ourselves spending an increasing amount of time managing international trade issues on fresh produce imports from Mexico to Texas, so in 2012 we decided to change our name to be more inclusive of our actual duties as an organization,“ explains Bret Erickson, TIPA president and CEO. “By expanding to address the issues and opportunities surrounding the importation and marketing of foreign-grown produce that was being shipped through Texas ports, our membership has nearly doubled in the past three years.”
Not only did the name change welcome the addition of produce import and production companies, it also crystallized the organization’s mission and helped define its niche in the industry. Today, TIPA’s member companies include growers, domestic shippers, import shippers, specialty shippers, distributors, and material and service providers.
Texas in Mexico
While TIPA represents both Texas and Mexico-based growers, it has found that many times its largest domestic producers are also some of its largest importers. “Texas companies are working on both sides of the border, growing products in Mexico, either contracted or on their own farms, and importing their goods into Texas,” says Bret. “Importing from Mexico not only increases profit margins, but it also helps keep customers happy by extending the seasons of sought-after produce and allows employees to keep jobs longer than the traditional growing season we have here in Texas – there are a lot of positives.”
As with all industries, supply and demand dictate vitality and business development, but there are several other factors that have impacted and forced industry growth of the Mexican produce import business:
1. Consumer demand
A nationwide demand for fully-stocked produce shelves, regardless of season, has left many retailers looking to international growers for support. “Consumers want cilantro, tomatoes and onions year-round, but all produce doesn’t grow during the same season,” explains Bret. “However, by purchasing products from various regions of Mexico, retailers can always have a constant supply.”
The agriculture industry is very labor intensive, and due to laws, regulations and the inability to supply a steady stream of workers in the United States, Texas-based producers are facing a lack of available laborers to maintain their crops. Savings on the cost of labor for Mexican workers is just another positive factor for producers who grow south of the border.
Droughts in Texas and throughout the United States have significantly impacted the domestic produce market. “Over the past years, we’ve had farmers in Texas that have let fields go fallow because they didn’t have enough water allocated for their crops,” Bret says. “Water is a valuable resource and we don’t have enough of it. Mexico, however, has water to maintain a steady crop.”
4. Aging growers
According to the latest figure from the USDA, American farmers are a quickly aging population. In the last 30 years, the average age of U.S. farmers has grown by nearly eight years, from 50.5 years to 58.3 years.
“Farming is very capital intensive, and for the most part our young people don’t have the kind of money it takes to get started,” explains Bret. “Whether the lack of interest is financial or a result of urbanization, the reality is that as our producers start to phase out, we have no one to replace them. Fewer domestic producers mean less product volume, so retailers are going to be looking elsewhere to fill their shelves.”
As Mexico continues to become an increasingly sophisticated produce powerhouse, exporting more fruits and vegetables to the U.S. than any other country, Bret believes producers will relentlessly seize opportunities for agricultural success south of the border – and assures members that TIPA will be there to facilitate and aide in any challenges that may arise
Click here to view the digital brochure featuring the Texas International Produce Association.