Border crossings through Hidalgo account for $30 billion in goods, an increase of 98 percent from 2003. The Hidalgo Port also contributes jobs to the state’s economy (over 50,000) and more than $7 billion in gross domestic product.
The Intelligent Bridge
While there are 12 border crossings in the Rio Grande Valley, the Pharr International Bridge is by far the most critical to the produce trade. As the only full-service commercial bridge in the Valley, this 3.2-mile long crossing connects Pharr with Reynosa.
FRESH FORUM Do you have any industry predictions for 2018?
Luis Bazan, Pharr International Bridge
“I know it’s going to be a big year for [Pharr International Bridge] based on the latest studies. We’re growing right now. We ended the year on a high note, with 5 percent growth across the board. I know Laredo ended at 4 percent, and that’s a good indicator for us for what the future holds—and we’re preparing for the future. We’re going to see tremendous growth in the next two years. We want to make sure to accommodate the growth that’s coming.”
Armando Flores, Ace Customs Broker, Inc.
“I believe that foreign fresh produce will decline, and therefore the ultimate consumer will pay a little more for it.”
Jerry Garcia, London Fruit, Inc.
“The country is probably going to get a higher volume of avocados and mangos coming in, especially out of Mexico. We expect to grow in all three products: avocados, mangos, and limes. We’re working on growing and hiring people to accommodate that growth.”
Roger Lucero, Villita Avocados, Inc. “Determination on what the United States decides to do with NAFTA is going to be the big factor when it comes to our (Mexico) trade with both the United States and Canada. We deal with both countries quite a bit.”
“This is the sixth largest and most important land port of entry in the nation, as compared to other land ports, seaports, and airports in the United States,” states Bazan. “And we’re the fourth largest and most important land port of entry with Mexico.”
The Pharr Bridge, which boasts the fastest commercial crossing in the Lower Rio Grande Valley, has come a long way since it first opened in 1994. Today, there are first-rate facilities and cutting-edge technology, including gamma ray inspection equipment and cold storage units to keep produce fresh and safe for distributors on both sides of the border.
It is also one of only three international bridges implementing the Free and Secure Trade program (FAST), which provides expedited entry for produce shippers. Thanks to its state-of-the-art technology, Mexican residents often refer to it as “The Intelligent Bridge” or the “Port of Entry of the 21st Century.”
Expansion & Improvements
According to Bazan, an average of 4,300 trucks cross over the Pharr International Bridge every day, including 2,300 northbound and 2,000 southbound vehicles.
The Rio Grande Valley sits at the southernmost tip of Texas on the bank of the Rio Grande River, which snakes along the U.S.-Mexico border. Home to just over a million residents, the Valley’s swelling population is fueling major business expansion throughout the region’s four counties—Cameron, Hidalgo, Starr, and Willacy—and beyond.
The largest of the four Valley counties, Hidalgo, includes the cities of McAllen, Edinburg, Mission, and Pharr. According to some economic forecasts, the McAllen-Edinburg-Mission metro area is expected to add 31,300 jobs over the next five years. Much of this extraordinary growth is thanks to the Valley’s booming produce trade.
Garden-Fresh Gateway
With nearly 44 percent of all U.S. fruit and vegetable imports coming from Mexico—and half of these shipments moving through Texas—the Rio Grande Valley is prime real estate indeed, and suppliers can send shipments throughout the nation with ease.
“We’re on the border right in the middle of the country,” points out Jerry Garcia, vice president at London Fruit, Inc. in Pharr. “Because of our location, we can go to any destination in the United States.”
Luis Bazan, bridge director for the Pharr International Bridge, says the Rio Grande Valley is essential to international trade because of its connectivity to major distribution centers. “In Pharr alone, we’re considered a mecca for produce distribution,” he explains.
“We have one [industrial] park, for example, that’s dedicated specifically to cold warehouses,” adds Bazan. “These products are then shipped to the northeastern quadrant of the United States, which is where you find your major markets and higher density population. But it all ties into the major corridors coming in from Mexico.”
Sizzling Trade & Hot Commodities
Although the Valley has acres of prime, fertile land and can grow a wide range of fruits and vegetables throughout much of the year, from berries in the spring and summer to cabbage, turnips, and herbs year-round, the bulk of the produce trade in the area revolves around imports.
Many of the major commodity imports are indeed grown in the state but most are consumed in the surrounding counties, while imports from Mexico are sent to the Midwest and East Coast buyers.
Primary top produce commodities crossing the border range from tomatoes, onions, lettuce, and peppers to avocados, mangos, lemons, and limes. While the majority of these items hail from Mexico, a rising portion originates in South America and even the Caribbean.
Alligator Pears
“Our number-one commodity is fresh Hass avocados from Mexico,” comments Armando Flores, a licensed customs broker with the aptly named Ace Customs Broker, Inc., in Hidalgo. According to the Hass Avocado Board, 93 percent of Hass avocados sold in the United States come from Mexico, with the United States claiming 78 percent of production.
Roger Lucero, in sales for Villita Avocados, Inc. in Pharr, says the company handles only avocados. “We import from Mexico and Peru, and we have growing operations in both locations,” he says.
London Fruit is exploring its options as well, by dabbling in imports from new trade partners, which includes Dominican avocados and mangos from Ecuador. “We’re just this year starting to look into it,” Garcia says.
Short Supply
Unfortunately, due to weather-related crop shortages in Mexico, suppliers had a difficult time sourcing the popular fruit in 2017 and prices climbed. In September, the average wholesale price for a 48-count case of avocados was $83.75, more than double the $34.45 for the same time in 2016, according to the American Restaurant Association.
“In 2017, we did see some shortages for avocados,” concedes Garcia. “Avocado people like to manipulate the market sometimes; sometimes it’s nature and sometimes it’s manmade.”
In Garcia’s opinion, Mother Nature was the biggest issue in 2017—both Texas and Mexico dealt with severe storms and hurricanes, and Mexico suffered earthquakes in Chiapas, Puebla, and Morelos. Each of these events affected the fresh produce supply chain not only last year, but have had serious repercussions for this year’s crops and supply.
In addition to avocados, Garcia says London Fruit’s top commodities are mangos and limes, which come primarily from Mexico. “We finance [operations] there for growing, so some is our product, and some is product growers bring to the packing sheds,” he explains.
Like avocados and other items, once again, “weather really affected the volume of fruit coming in last year,” Garcia says. “Weather contributes a lot to the way trees flower. Mango [supply] fluctuated because of the weather, and it also affected limes.” Since both mangos and limes are popular exports to the United States and supply was hard to come by, prices soared for these commodities.
Ports of Entry
Although Texas is home to numerous trade hubs, the Hidalgo Port of Entry (including the Pharr International Bridge, McAllen-Hidalgo International Bridge, and Anzalduas International Bridge), is a major import/export artery.
Border crossings through Hidalgo account for $30 billion in goods, an increase of 98 percent from 2003. The Hidalgo Port also contributes jobs to the state’s economy (over 50,000) and more than $7 billion in gross domestic product.
The Intelligent Bridge
While there are 12 border crossings in the Rio Grande Valley, the Pharr International Bridge is by far the most critical to the produce trade. As the only full-service commercial bridge in the Valley, this 3.2-mile long crossing connects Pharr with Reynosa.
FRESH FORUM Do you have any industry predictions for 2018?
Luis Bazan, Pharr International Bridge
“I know it’s going to be a big year for [Pharr International Bridge] based on the latest studies. We’re growing right now. We ended the year on a high note, with 5 percent growth across the board. I know Laredo ended at 4 percent, and that’s a good indicator for us for what the future holds—and we’re preparing for the future. We’re going to see tremendous growth in the next two years. We want to make sure to accommodate the growth that’s coming.”
Armando Flores, Ace Customs Broker, Inc.
“I believe that foreign fresh produce will decline, and therefore the ultimate consumer will pay a little more for it.”
Jerry Garcia, London Fruit, Inc.
“The country is probably going to get a higher volume of avocados and mangos coming in, especially out of Mexico. We expect to grow in all three products: avocados, mangos, and limes. We’re working on growing and hiring people to accommodate that growth.”
Roger Lucero, Villita Avocados, Inc. “Determination on what the United States decides to do with NAFTA is going to be the big factor when it comes to our (Mexico) trade with both the United States and Canada. We deal with both countries quite a bit.”
“This is the sixth largest and most important land port of entry in the nation, as compared to other land ports, seaports, and airports in the United States,” states Bazan. “And we’re the fourth largest and most important land port of entry with Mexico.”
The Pharr Bridge, which boasts the fastest commercial crossing in the Lower Rio Grande Valley, has come a long way since it first opened in 1994. Today, there are first-rate facilities and cutting-edge technology, including gamma ray inspection equipment and cold storage units to keep produce fresh and safe for distributors on both sides of the border.
It is also one of only three international bridges implementing the Free and Secure Trade program (FAST), which provides expedited entry for produce shippers. Thanks to its state-of-the-art technology, Mexican residents often refer to it as “The Intelligent Bridge” or the “Port of Entry of the 21st Century.”
Expansion & Improvements
According to Bazan, an average of 4,300 trucks cross over the Pharr International Bridge every day, including 2,300 northbound and 2,000 southbound vehicles.
“We’ve seen our numbers surpass anything we’ve seen in the past,” he confirms. “We’ve hit about 10 percent growth in southbound crossings and about 13 percent growth for northbound crossings since last year.”
As for the amount of produce that crosses through Pharr, Bazan says the numbers are “staggering.” Nearly 65 percent of produce that originates from Mexico comes through the Pharr port of entry, he estimates.
There are also a handful of exciting projects in the works. “By the year 2021, hopefully sooner, we’ll have built five major infrastructure projects inside the federal port of entry,” Bazan explains.
The projects will add more commercial northbound entry and exit lanes; construction of a regional agricultural training center and lab; and a dock expansion, which he says “will be a cold inspection facility for fresh produce that requires different temperature settings for different types of products coming in from Mexico. So,” Bazan continues, “these projects are tailored for the produce industry.”
Funding & Future Goals
Funding will come from a “public-private partnership that will allow us to fast-track these projects,” Bazan explains. “We know the federal government does not have the needed funding, nor the resources. Instead of waiting 10 or 15 years for these projects, the city of Pharr can do it in the next 4 or 5 years.” He says the City of Pharr will have invested about $30 million by the time the projects are completed.
Year after year, as traffic across the Pharr International Bridge continues to grow, Bazan says these types of expansion projects are necessary. “Over the next 10 years, we’re forecasted to average year after year anywhere from 18,000 to 20,000 additional trucks coming through this bridge,” he observes.
“That’s a great forecast for us and we couldn’t be happier,” he stresses, “but at the same rate, we know there’s a lot more trade to be done. We’re working towards becoming the model port of entry.”
Roadblocks in the Valley
While the future certainly looks bright for the Valley, the region’s buyers and sellers have faced several familiar obstacles in the last year—from weather and shortages to food safety and trade negotiations. And of course, there are always more challenges, any given day, on the horizon.
Food Safety Protocols
One challenge of major consequence is compliance with a component of the U.S. Food and Drug Administration (FDA) and U.S. Department of Agriculture’s (USDA) food safety protocols. Though importers and suppliers have been aware of the Foreign Supplier Verification Program (FSVP), they must now get into compliance with its requirements or face serious consequences.
Ace’s Flores says FSVP implementation will be a burden for most importers. “Many importers do not want to get involved as the FSVP contact and are either just the ‘selling agent’ or buying f.o.b. (free on board),” he remarks. “The FDA has put all the responsibility on the U.S. importer.”
Trade Talks
Another issue continues to haunt every produce importer in the Valley: renegotiation of the North American Free Trade Agreement (NAFTA).
“I think the toughest challenge by far has been the NAFTA renegotiation,” Bazan says. “Trade is continuing, but at the end of the day, there’s a lot of uncertainty… Based on the latest information we’ve gathered, the talks [will continue] through the first quarter of 2018.”
Flores has been in the industry since before NAFTA. “If NAFTA is voided and duties come into play, then the ultimate consumer will pay for the extra charge. Also, all U.S. customs brokers who do not have good operating cash flow will be hurt.”
Lucero’s hope is that the renegotiations will not affect the produce industry or the nation’s food supply. “Bottom line, anything they do affects U.S. consumers—and what they’re spending money on.”
Bazan says Pharr International Bridge has formed a NAFTA renegotiation team, including current and former board members, trade professionals, and even other ports. “At the end of the day, this affects us all—not just Pharr. It will affect everyone,” he says.
“We’ve been spearheading some initiatives. We went to Washington three or four times in May and June to visit with top ranking officials and put our unified voices out there to talk about the challenges we see in the distance,” continues Bazan. “We’re pushing for a flexible and fair trade plan that everybody can benefit from.”
Outlook: Good Despite current challenges and uncertainties, suppliers in the Rio Grande Valley remain optimistic about the road ahead, and so do their fellow Texas residents.
According to research by Texas A&M University, the Lone Star State will account for 52.4 percent of all U.S. produce imports from Mexico by the year 2023, compared to 48.6 percent in 2015. This level of expansion could result in an estimated 7,700 jobs and an economic impact of $815.2 million—that’s something to look forward to.
Bazan narrows the focus a bit: “Regardless of the NAFTA negotiations or whatever is going on in Washington, we have to continue planning and doing our part,” he says. “Pharr is open for business; we have a positive outlook regardless of what’s happening at the national level.”
