The Texas Tropics

Rising Volume, Fluctuating Costs
As development escalates across The Valley, cities like Pharr and Mission, where the Pharr Bridge and Anzaldúas Bridge are located respectively, are attracting companies looking to build their own warehouses and cold storage facilities close to a key border crossing. Although the Anzaldúas Bridge can’t cross produce trucks yet due to an infrastructure issue, efforts to remedy the situation are moving forward quickly.

“As you’d expect with rising volumes, we’ve seen a boost in demand for cold storage space and rising costs,” says Erickson of TIPA. “Many people are expanding existing spaces or building new ones, and that’s creating construction jobs throughout the area. There’s kind of a race to build cold storage space.”

Not All Roses
While many in The Valley expect the current good times to continue, not everyone paints such a rosy picture.

Despite the growth, many in the produce industry continue to face challenges, such as the volatile weather, labor shortages, and increased competition from unexpected sources.

Unpredictable weather patterns—or no patterns at all—have made it tough to plan ahead. “We used to be able to say ‘it’s fall, so the temperature will drop by X, the relative humidity will be Y, and it will probably rain this much’—but we can’t predict anymore, and that’s disrupting the marketplace. The volumes and quality aren’t constant anymore,” Usabiaga says.

For Jorge Vazquez of Latin Specialties, LLC based in Houston, it’s about competition. More companies are flush with cash and are expanding at a breakneck pace, ­creating an environment of hyper-competition. “Companies with access to cheap money, pressured by lower margins and emboldened by the new Food Safety Modernization Act requirements, are circumventing the normal distribution chain and going directly to farmers [in Mexico],” Vazquez says. “This is bad news for companies in the middle, including many in The Valley.”

The Ambiguities of Less and More
In addition, while some celebrate lower fuel prices, others think the consequences of cheaper logistics will allow anyone to puchase smaller quantities of a product at the same price as full loads, thereby putting pressure on pricing.

Add to this the ongoing challenge of finding steady, skilled labor—which is becoming more scarce and expensive—as well as the violently fluctuating weather swinging from drought to flooding, and the situation takes on a more serious tone. Vazquez, for one, doesn’t see any short-term solution in sight.