Suppliers Expanding
With more demand and more loads coming across the border, several businesses have had to expand to keep up. Villita Avocados found available storage space was a challenge this past year. “On average, in past years we’ve brought in roughly 5.5 million boxes of avocados, but this year it was 7.5 million, and certain times it got tough,” says DeBerry.
The company’s new packing center in Uruapan will allow the release of two shipments a day, which will greatly increase the company’s ability to bring more fruit to the border. The facility boasts the “latest technology in both cooling and ethylene controls. Our current warehouse holds about 65 loads and the new one will hold approximately 200 loads, and will have 6 ripening rooms and a 40-load capacity freezer.” The developments will allow Villita to fulfill its own needs as well as offer repack services to others.
Traveler Produce’s Camacho believes the boom supports enough business for everyone. “Hidalgo County is growing in infrastructure and commerce-wise. There’s a variety of produce companies, which means more competency and services in the area. For example, there are more cold storage services and every month warehouses are being built.”
“In the long run, all of these changes and updates should add additional shelf life to fruit, which will help customers have better, consistent quality they can rely on,” remarks DeBerry.
Technology Ups Its Role
Another way Villita Avocados is responding to the need for better quality is through better technology in its transportation services. The company recently launched a fleet of 20 trucks with thermal tracking to monitor temperatures every mile. “Maintaining the cold chain the entire time is very important to avocados, to extend shelf life,” DeBerry says.
Camacho agrees, and sees technology playing an increasingly important role in the fresh produce supply chain. “To give produce long shelf life while it is being stored or transported, we need technology,” he affirms.
Traveler Produce also keeps an eye on its assets while on the road. “Each day we use temperature recorders that let you know not only the temperature but also track the truck,” Camacho says. In addition, the company’s sales team has a mobile app allowing them to view inventory in real time.
“Technology is not an expense,” Camacho insists, “it is an investment.” Whether it’s food safety regulations from the field to the store, or ongoing communication, technology is crucial. “We need it to keep growers, buyers, and shippers informed,” he notes, and is happy with the improvement in produce software. “At Eagle Cold Storage, we know what pallet is in what position on the rack, we monitor temperatures, and we offer new ramps where product is never in touch with the environment.”
Suppliers Expanding
With more demand and more loads coming across the border, several businesses have had to expand to keep up. Villita Avocados found available storage space was a challenge this past year. “On average, in past years we’ve brought in roughly 5.5 million boxes of avocados, but this year it was 7.5 million, and certain times it got tough,” says DeBerry.
The company’s new packing center in Uruapan will allow the release of two shipments a day, which will greatly increase the company’s ability to bring more fruit to the border. The facility boasts the “latest technology in both cooling and ethylene controls. Our current warehouse holds about 65 loads and the new one will hold approximately 200 loads, and will have 6 ripening rooms and a 40-load capacity freezer.” The developments will allow Villita to fulfill its own needs as well as offer repack services to others.
Traveler Produce’s Camacho believes the boom supports enough business for everyone. “Hidalgo County is growing in infrastructure and commerce-wise. There’s a variety of produce companies, which means more competency and services in the area. For example, there are more cold storage services and every month warehouses are being built.”
“In the long run, all of these changes and updates should add additional shelf life to fruit, which will help customers have better, consistent quality they can rely on,” remarks DeBerry.
Technology Ups Its Role
Another way Villita Avocados is responding to the need for better quality is through better technology in its transportation services. The company recently launched a fleet of 20 trucks with thermal tracking to monitor temperatures every mile. “Maintaining the cold chain the entire time is very important to avocados, to extend shelf life,” DeBerry says.
Camacho agrees, and sees technology playing an increasingly important role in the fresh produce supply chain. “To give produce long shelf life while it is being stored or transported, we need technology,” he affirms.
Traveler Produce also keeps an eye on its assets while on the road. “Each day we use temperature recorders that let you know not only the temperature but also track the truck,” Camacho says. In addition, the company’s sales team has a mobile app allowing them to view inventory in real time.
“Technology is not an expense,” Camacho insists, “it is an investment.” Whether it’s food safety regulations from the field to the store, or ongoing communication, technology is crucial. “We need it to keep growers, buyers, and shippers informed,” he notes, and is happy with the improvement in produce software. “At Eagle Cold Storage, we know what pallet is in what position on the rack, we monitor temperatures, and we offer new ramps where product is never in touch with the environment.”
Political Concerns
When we asked contributors to discuss how the results of the presidential election would impact trade and the fresh produce industry, their thoughts were varied, but with some agreement on a few prominent issues.
Camacho and Flores are both uncertain whether Trump will follow through on his campaign promises. Camacho is much more concerned about the North American Free Trade Agreement (NAFTA). “NAFTA cannot be altered; these three countries [the United States, Mexico, and Canada] depend on each other.”
FRESH FORUM What were your toughest challenges this past year? Will you be facing the same obstacles in 2017, or are you better equipped to deal with them?
Richard Ruiz, Ruiz Sales
One of the toughest challenges in our business is procuring premium quality limes. We work hard with our grower-partners to invest and ensure they can get the best possible crop, since a great pack starts with a great grower.
Yasmani Garcia, Sweet Seasons
A lot of regulations are in the grey area and not clear. All our stuff crosses in customs—papayas are held under review and tested. Sometimes when they come back, they’re no longer good because the procedure takes longer than the shelf life of the product. This continues to be a challenge that falls out of our hands and as an industry needs to get better.
Pedro Camacho, Traveler Produce / Eagle Cold Storage
The biggest challenge was trying to keep everybody informed and involved with food safety regulations and practices, from the farm to the distribution center.
Eli Reyes, Nicho Produce
The past year our toughest challenge was having to deal with new vendors coming in to give us competition. This year, we’re better equipped to handle all the changes within the school districts and are more than capable of competing with all the new vendors.
Michael DeBerry, Villita Avocados
Space; this past year we saw a record year for production, and space was sometimes an issue. That’s why we built the new warehouse: it will provide us with all the space we need and allow us to increase our volume out of Mexico as well. We also made some additions to our facility in Michoacán to increase our packing capacity there as well. Space and capacity are challenges throughout the year, and one of the reasons for these changes.
Art Salinas, Bonanza 2001
Weather is always an issue. When speaking about the bigger picture, we all face obstacles with the weather, low demand, and dealing with too much supply. These are all obstacles we face if not once, then twice a year, and sometimes there’s a real good year when we don’t face them at all. The biggest work is at the farm—doing what’s needed for the products to be sold at a premium or just sold period. Rain was a factor last summer; rain in the right place at the wrong time.
Felipe Moreno, Moreno Produce
One of our toughest challenges is getting to know different growers and meeting ones that subscribe to how our company deals with quality. We go out and visit to see the farms, how they’re producing, and that everything is being properly set up.
Armando Flores, Ace Customs Broker, Inc.
Competition with more brokers in the market…and upgrading software to be able to communicate with Customs—they’re using ACE (automated commercial environment) software that came into effect this year—and we’re still implementing it. It adds 34 different agencies into the software, and depending on the products imported, the required agents are notified of particular items. It’s still a learning process between Customs and ourselves, but will eventually expedite all transactions.
When it comes to immigration and building a wall between the United States and Mexico, Flores says, “I believe the wall will have more of a negative impact than NAFTA revocation. Regardless if NAFTA is revoked or not, the ultimate loser will be the consumer,” he warns, since tariffs and duty charges would become an added expense for fruits and vegetables. “Duty on some produce is by value percentage and others by net weight,” he continues. “If NAFTA is revoked, I can see small customs brokers going out of business if they don’t have good, solid cash flow.”
Under NAFTA, produce is exempt from duty fees; without this protection, Flores says fresh avocados, for example, would incur a duty of 11.2 cents per kilogram, fresh papaya would ring up a duty of 5.4 percent of value, and watermelon, depending on the time of year, would have a duty of either 9 or 17 percent of value.
All of these added fees would increase prices for everyone along the supply chain. “As you can see, it seems to make a difference, but it will all depend on supply and demand,” Flores contends. “I’ve been involved in the customs brokerage field for over 30 years—before NAFTA—and the ultimate consumer will dictate how and if there is any decrease of imports, and the impact of the revocation of NAFTA.”
DeBerry, too, refers to supply and demand. “The market forces will play out like they always do and at some point, supply will meet demand. That being said, there will be some posturing on both sides of the border to be sure—and there may be a hiccup or two along the way—but in the end, everything will end up working like it always does, as far as produce items are concerned.”
Ruiz of Ruiz Sales has no NAFTA concerns and no reservations whatsoever for the coming four years and new administration. “My projections on the effects for the Rio Grande Valley is that our elected president, Donald Trump, will secure borders, reform immigration laws, [and] create jobs.”
Further, Ruiz believes Trump will follow through on many other issues, many of which will affect produce suppliers, such as deregulation and lowering taxes for small businesses. In this vein, Bazan has similar thoughts.
“I believe Trump is a smart guy, he’s a business man,” Bazan says. “He’s going to connect with business individuals and once he does, I believe he’ll make the right choices.” He also believes the Pharr Bridge will “continue growing as one of the most prominent land ports in the nation. We’re ranked thirtieth of all land ports, and out of the thirty, we’re the sixth most important gateway for commerce with the rest of the world, so we need to continue on that path.”
Ruiz is also confident Trump and others will “empower high-technology education to compete worldwide, and support U.S. veterans’ medical needs. These are all blessings for a safe Rio Grande Valley that will promote prosperous trade, business growth, and a great bright produce future.”
Future Outlook
The political climate may foretell change, but chances are any major shifts in international policy or trade will take time. In the meantime, the Pharr International Bridge will continue its pivotal role in trade, especially for fresh fruits and vegetables. With ease of access and further expansion plans on the horizon, most hope and still believe Mexico imports through Texas will continue to surge in the years to come.
With fresh produce, it’s about all the tiny things that line up from plenty of hard work and a little bit of luck that result in a perfect piece of fruit or finished product. “There are many variables,” confirms Salinas. “Nine things have to go right for the tenth to go right as well, and the tenth is importing.”
“In my opinion, if the weather was perfect we would have more produce than what we consume,” remarks Camacho. He foresees the future as “a protected environment for commodities that will allow us any kind of produce during any seasonal time of year.” This is already becoming the norm for growers in Mexico, he says, where shield houses and greenhouses dot the countryside.
Partnerships and communication are also of the utmost importance. “We are deeply affected by what happens on both sides of the border—it’s not like Vegas where everything stays there,” comments Bazan. But with the tenets of hard work, reciprocity, and faith, for those with fresh produce roots in the Rio Grande Valley, the horizon keeps expanding.
