Cross-Border Appeal: Why Mexico Will Retain its Importance to the US Produce Industry

Originally printed in the December 2023 issue of Produce Business.

Mexico’s importance to the U.S. and Canadian produce supply chain can’t be overstated. Each year, Mexico accounts for an estimated 39% of all fruit and vegetables imported into the U.S. and, if anything, imports from Mexico are growing. According to a forecast from Texas A&M University’s Center for North American Studies, the value of produce imports entering the U.S. from Mexico are predicted to total more than $53 billion in value terms by 2030.

For Lance Jungmeyer, president of the Fresh Produce Association of the Americas (FPAA), a group that lobbies for ease of trade between Mexico and the U.S., there are some good reasons behind Mexico’s significance as a produce supplier.

Firstly, he points to Mexico’s “outstanding climate,” or rather its range of microclimates that allow the geographically diverse country to grow a wide range of items year-round. Such climates include the semi-desert of the north, where tomatoes and grapes are produced in Sonora and neighboring Chihuahua, down to more lush, tropical regions of Chiapas and Veracruz, where lemons, mangos, papayas and bananas are in abundance.

Another reason, Jungmeyer continues, is Mexico’s access to an available workforce and, in most areas, water. Like much of the rest of the agricultural industry, Mexican producers have struggled for manual labor over the last 12 months, while drought remains a challenge for regions like the Yaqui Valley in Sonora.

But for the FPAA president, the most significant factor is the part played by the United States-Mexico-Canada Agreement (USMCA), the cross-border deal between the U.S., Canada and Mexico, and successor to NAFTA, that took effect in 2020. Jungmeyer describes it as “probably the most successful trade agreement in the world.”

“As a result of the USMCA agreement, the governments of these countries are cooperating on food safety, plant health and phytosanitary issues, and they are cooperating on high-level trade issues where Mexico has an advantage over other countries,” says Jungmeyer.

MAKING STRIDES

At the same time, Jungmeyer says Mexico is making strides thanks to growers embracing new technologies, especially when it comes to greenhouses. “Growers in Mexico are investing in greenhouses that are world class and, by having greenhouses, growers are able to plant varieties of, for example, tomatoes that they can pick year-round, whereas if they grow in the field, they can only pick two or three times a year,” he explains.

By using greenhouses, Jungmeyer says Mexico’s producers benefit from more predictable harvests that avoid the typical ups and downs of a production cycle, while also delivering products with improved quality and appearance.

“Producing in a greenhouse means they can prevent common problems, such as sun-blush in bell peppers and wind-scarring on tomatoes,” he says.

In terms of which products have been the star exports for Mexico, the FPAA’s Jungmeyer says berries have been “really flying off the shelves” in recent years, while prospects for papayas also look strong. “Mexico always does a lot of papaya and if growers organize themselves a little better in the future, we might see a papaya marketing board,” he says.

Jungmeyer believes Mexico may be able to fill gaps caused by drought conditions for growers in California, which were only recently alleviated.

EVOLVING IMPORTS

Based in Nogales, AZ, IPR Fresh imports a wide range of products on an annual basis from Mexico, with a particular focus on colored bell peppers, European cucumbers, slicer cucumbers, watermelons and sweet corn.

Over the past year, IPR Fresh’s Jose Luis Obregon says the company’s Mexican produce business has faced its fair share of challenges, including market conditions and weather-related issues. “A colder winter led to crop delays, causing our peak production to shift by a month,” he recalls. “This resulted in unusually heavy volumes during non-traditional times.”

In contrast, Obregon says 2023 volumes have been lower, compared to the previous year, due to Hurricane Otis affecting growing areas.

As a company, IPR offers Mexican produce year-round, although imports peak between December and May. At the same time, Obregon says IPR’s offering from Mexico has evolved, with the importer, which celebrated its 20th anniversary in 2023, recently adding bell peppers.

“We are dedicated to expanding our grower base and striving to become the largest bell pepper importer in the U.S,” he adds.

Based in McAllen, TX, importer Cabefruit Produce is part of Grupo Cabello, a family-run business that produces mangos, jackfruit, avocados, limes and other fruits from Mexican farms located in Tapachula, Chiapas, Cihuatlán, Jalisco and Tepic.

According to Norma Mesias, Cabefruit’s marketing coordinator, the past 12 months have brought unexpected challenges. Impacted by climate change, Mesias says growers faced harsh conditions, making it a trying period, with volume down by 50% compared with previous years.

Despite these challenges, she says Cabefruit and Cabello’s commitment to producing quality remains unwavering. “We acknowledge the potential effects on supply and demand, but are determined to find innovative solutions to maintain our production standards,” says Mesias. “We exist to provide people with the best experience and quality in fruit despite the unpredictable circumstances we encountered.”

NEW SOURCES MAKING IMPACT

One of the undoubted giants of the produce industry when it comes to imports of Mexican avocados and mangos is Oxnard, CA-based Mission Produce. According to the company’s director of Mexico sourcing, Monica Robles, the produce industry experienced a great Mexican avocado season from November 2022 to July 2023, with plentiful supply and great quality.

During Mexico’s off-season in the summer, Mission complements the lower Mexican volumes with supply from its vertically integrated farms in Peru. Then after the Peruvian season wraps up, its ramps back up volumes from Mexico.

In terms of the current season, Robles says the Mexican crop is offering plentiful supply, although she says rain-caused delays in the key production state of Michoacán have resulted in fruit is peaking on smaller sizes.

On the mango side, Mission’s mango sourcing manager, Marco Villavisencio, says the company has enjoyed a successful 2023 season, delivering consistent volumes and quality for programs. “Starting down in Oaxaca, we sourced mangos of the top varieties from all the major growing regions up to northern Sinaloa,” he says. “Volumes were comparable to previous years, and despite some weather events, quality remained good throughout the season.

MERCHANDISING OPPORTUNITIES

Despite the challenges, IPR’s Obregon believes there are numerous opportunities to increase sales of Mexican produce, especially in promoting the consumption of healthy products like fresh produce.

“To effectively promote, merchandise and market Mexican produce, retailers should consider factors like seasonality, quality and cultural relevance,” he recommends. “They can use in-store displays, social media, and partnerships with local restaurants to maximize sales.”

Likewise, Mission’s Robles says retailers can benefit from promotional opportunities for smaller avocados during peak December-June avocado season. “Retailers can leverage our Mission Minis bags, and can speak to our category management team for strategies to get the most out of their avocado category,” she says.

For Mission’s Villavisencio, Mexican mangos offer substantial opportunities for customer programs, thanks to the wide spectrum of varieties available in the region.

“The industry can drive consumption by educating the consumer on mango uses, such as how to cut a mango, how to determine ripeness, and how to incorporate mangos in more recipes,” Villavisencio adds.

Cabefruit’s Mesias says a significant challenge for the produce industry today is a lack of basic education regarding produce knowledge and eating habits. To counter this, she advocates for produce nutritional tables to be made readily available for shoppers, a simple, yet impactful, change she believes could make a substantial difference in consumer choices.

However, she believes there is still more retailers could do to boost sales. “Promoting produce requires staying fresh and relevant,” Mesias argues. “Retailers should highlight what’s in season and high volume, as informed consumers are more likely to increase their produce consumption and satisfaction. Each fruit has its time to shine, and aligning promotional efforts with peak production seasons can enhance customer engagement.”