New Mexico chile farmers, producers, processors, industry supporters and state officials gathered in Las Cruces this week at the New Mexico Chile Pepper Institute’s annual chile conference where New Mexico Chile Association President Dino Cervantes told attendees the nation’s largest chile crop is stabilizing.

The Chile Institute, operated by New Mexico State University, stages the conference each year to provide industry updates and to provide a forum where industry participants can plan for the future of a challenged industry.

“We’re sort of stabilizing,” Cervantes told the crowd, but warned many challenges lay ahead. He says chief among them are competition from foreign chile imports, escalating labor costs, water issues and a crop that is vulnerable to plant diseases.

The event was staged in Las Cruces, the heart of New Mexico chile country. Doña Ana and Luna counties in the southern part of the state are the top two chile-producing counties in New Mexico. Overall, the state leads the nation in chile production.

Officials reported that in 2012 about 9,600 acres of New Mexico chile were harvested, up slightly over the previous year, according to USDA numbers. But in 2010, chile acres dipped to a 40-year low (8,500 acres) as pressure mounted from Mexican chile imports, from higher labor costs and drought conditions that limited irrigation. At one point in the 1990s, the state chile crop had reached just over 35,000 acres.

New Mexico chile processor Lou Biad told the conference “the world is now competing for the chile market,” citing growing competition from Mexico, South America and China. He said labor costs for foreign growers hovers around $2 a day while New Mexico growers pay from $9 to $10 an hour to domestic workers.

Biad is the owner of Rezolex, Ltd., a modern processing facility of paprika oleoresin. In addition, the Biad family owns and operates extensive farming operations and four major chile de-hydrating plants from Texas to Arizona.

“They (foreign competitors) can produce a product for a lot less than we can and the global industry is growing,” he said.

In addition, New Mexico chile growers say there are fewer government regulations for foreign growers, which provides another unfair advantage.

New Mexico chile, a better choice

State agriculture officials say New Mexico chile maintains one clear advantage.

Jaye Hawkins, executive director of the New Mexico Chile Association, says New Mexico chile has a reputation as the chile with the most unique flavor. She points to the popularity of the Hatch chile variety, the preferred chile by New Mexico green chile lovers.

“New Mexico consumers are savvy about chile quality and variety and there will always be a demand for Hatch chiles. Chile is still roasted in parking lots each fall across the state and restaurants are loyal to native varieties. This is working in our favor, but this alone can’t salvage an industry so threatened by foreign competition,” Hawkins says.

And the growing problem of drought and water shortage is a problem quickly rising to the top of growers’ challenges, she said.

“Chile grows well in arid climates, but water is still required.  Irrigating from ground wells increases production costs considerably, and New Mexico hasn’t escaped the drought,” Hawkins said.

Legal disputes between Texas and New Mexico and rising friction between Mexico and the U.S. over legal rights to water in the Rio Grande River Basin are evidence of the growing concern over water in the region. Last month Texas filed a federal lawsuit over water rights to the river as the threat of another year of drought across the Southwest looms over growers as they prepare for the new crop year.

Producers in New Mexico face another problem—young farmers are abandoning chile in favor of more profitable crops. While chile farming traditions run deep in New Mexico, making a profit is more important.

Eddy County Extension agent Woods Houghton says many younger chile and nut farmers in southern New Mexico are turning to more traditional crops like cotton because of drought conditions, foreign competition and labor issues. He says the threat of introduction of diseases and pests from Mexican red chile imports poses another problem.

In December, two shipments of Mexican red chile were stopped at border entry points in Texas and New Mexico because pests were discovered in the shipments. Digital images of the insects intercepted in New Mexico were sent to a USDA entomologist for identification. The pests were identified as Brochymena sp. Pentatomidae, commonly called a stink bug. Entomologists identified the insects discovered at the Presideo, Texas, point of entry as Chrysomelidea Epitrix sp., or flea beetles.

“These pests can ruin an entire crop if introduced into an area where there are few safeguards against it,” reported USDA officials.

In response to the discoveries, U.S. Customs and Border Protection agents issued an Emergency Action Notification (EAN) and ordered the shipments returned to their point of origin in accordance with the U.S. Code of Federal Regulations.

New Mexico Chile Law is working

Chile association officials at the conference say New Mexico’s new Chile Advertising Act is working to help domestic chile sales at a time when foreign imports are putting pressure on local growers because it makes it unlawful for vendors in the state to label fresh or processed chile as being from New Mexico unless it was actually grown in the state. Vendors in New Mexico subject to the law include groceries, restaurants, convenience stores, farmers' markets and roadside vegetable stands.

During other conference activity, Gary Nabhan, a research scientist based at the University of Arizona’s Southwest Center, reported on climate change and water scarcity in the Southwestern U.S. Attendees also heard about recent research solutions for disease and pest management and learned about the latest updates on mechanical cleaning of chiles.

Researchers from the New Mexico Chile Pepper Institute announced the completion of a draft map of the chile genome, a major step toward making genetic improvements in the chile crop. NMSU Associate Professor Stephen Hanson told attendees potential genetic modifications to chile could help control plant diseases, such as a gene that could help fight the pathogen phytophera.

NMSU Professor Paul Bosland, co-chairman of the conference, told the group the Chile Institute has raised some $500,000 so far that can be used to fund a permanent researcher dedicated to chile. He said the goal is to generate about $1 million to finance the project.

About 220 attendees turned out for the conference.