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.

“The ideal green chile machine must be gentle and cause less damage and field loss,” Hughs said to the pepper crowd. “The only machine that came close to meeting the criteria was an Israeli machine that is currently commercially available. Nearly 80 percent of the fruit harvested by the machine was marketable. One chile was broken for every eight chiles harvested whole.”

The USDA-ARS unveiled a green chile harvester during a pepper conference tour stop at the Leyendecker Plant Science Research Center.

“We are trying to reduce human drudgery (hand picking) and keep the producer in business,” Hughs said.

Also on display at the Leyendecker facility was a green chile de-stemmer which will be brought to market. The de-stemmer was developed after four years of work and 15 prototypes, under a partnership between the NMCA and the New Mexico State University’s Manufacturing Technology and Engineering Center (M-TEC).

The 40-foot-long, 10-lane “computer controller cutter” utilizes six Windows-based computers plus video cameras to identify the stem on the chile. Scissor-shaped knives cut the stem off at the rate of 10,000 pounds per hour.

M-TEC will test the de-stemmer at processing plants this fall.

“Our target is a 90-95 percent de-stem rate with less than a 10 percent yield loss,” said Ryan Herbon, M-TEC’s de-stemmer project leader.

Doña Ana County's declining status

Doña Ana County is the top chile producing county in New Mexico with about 3,900 acres in 2009. Jeff Anderson, NMSU Extension agronomy and horticulture agent for the county, calls the status of the county’s chile industry “shaky.”

Anderson says the major causes in acreage decline over the years include (in order): disease pressure; urban development with rising land prices; an aging grower population; and labor.

“Before more restrictive immigration laws and 9-11 it was easier to get laborers from Mexico who were willing to work in the chile fields,” Anderson said.

He believes the chile industry will level out over time in part due to ongoing NMSU genetic pest and disease resistance breeding, including the control of phytophthora.

“Once we get a handle on breeding for disease resistance and improving the soil health there will probably be an upsurge in chile production,” Anderson said. “But we must also have mechanization to keep competitive and moving forward.”

In conversations with chile growers, Anderson says some growers are considering switching from annual crops including chile to pecan production. Chile in New Mexico is usually rotated with cotton, onions and alfalfa. 

Even with current higher cotton prices, Anderson does not see cotton as a current, viable economical crop locally for now due to overproduction overseas.

“There are exciting things ahead, however, with gossypol-free cotton,” Anderson said. “Gossypol-free cotton seed can be used for cattle and chicken feed, plus human consumption since it’s very high in protein. “This may be an incentive to give the cotton industry a push and keep chile as a viable crop for New Mexico.”

Doña Ana County’s top acreage crops, in order, include pecans (more than 25,000 acres), alfalfa, onion and chile.

In addition to formal presentations, pepper conference attendees participated in red and green-based chile tours, and a tour of the Hatch, N.M., chile-growing region, the chile production capital of the world.

Those on the green trip toured Border Foods, Inc., the largest green chile and jalapeno processing facility in the world located in Deming, N.M. Most of the chile processed at the plant is grown in New Mexico with some brought in from Mexico.

Chile pepper production provides about 15,000 full- and part-time jobs and about $465 million to the New Mexico economy.

cblake@farmpress.com