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.