Mexican project likely to boost local produce imports

Before the Mexican Transportation Department began constructing the highway between Mazatlan in the state of Sinaloa state to Durango in the state of Durango, traversing the straight line was dangerous and time-consuming.

The 142-mile Mazatlan-Durango highway is a $1.5 billion engineering marvel being built at an average daily pace of 5 feet that includes 11 miles of underground tunnels and 115 bridges over treacherous terrain. Scheduled for completion in 2012, the modern highway will cut travel times between the two cities from seven hours to less than three over a route that was previously impassable for most Mexican truck drivers.

But the roadway connecting remote parts of the two states also represents the final piece of an east-west highway connecting Mexico’s Pacific coast to the Gulf of Mexico — from Mazatlan to Matamoros, Tamps. And connecting those two regions creates a quicker pathway to major U.S. markets for Sinaloan farmers who grow tomatoes, squash and other fruits and vegetables in Mexico’s most agriculturally rich state.

Currently, produce from Sinaloa is shipped along Mexico’s west coast into Nogales, Ariz., the largest port for importing Mexican produce, before it heads east through the United States. But McAllen Economic Development Corp. executive director Keith Patridge said the Mazatlan-Matamoros highway provides a direct path to the eastern seaboard and allows drivers to ignore U.S. weight limits, regularly carrying two trailers behind each truck on Mexican highways.

"The reason they’re moving here is it’s cheaper to run through Mexico and then into Texas," Patridge said. "It’s substantially cheaper crossing at our point versus Nogales to get to the East Coast markets."

When diesel prices reached a high point in 2008, it cost fruit and vegetable truck drivers an average of $2.24 per mile to import into Nogales versus $2.03 per mile for Pharr crossings, according to a U.S. Department of Agriculture report. Last summer, the gap widened with a trip through Nogales costing $2.26 per mile compared to $1.67 for Pharr.

Increasing fuel costs cause more Mexican farmers to ship through Texas, making the state the nation’s No. 3 distributor of fruits and vegetables — behind Florida and California — despite annual losses in domestic production, said John McClung, the president of the Texas Produce Association, a nonprofit group representing shippers of Texas-grown fruits and vegetables and importers of foreign grown produce. Roughly 60 percent of the produce shipped from Texas was actually imported from Mexico.

The state’s growth in imports is also hastened by Mexico’s construction of east-west highways (most North American Free Trade Agreement routes originally radiated north-south out of Mexico City) and by more farm production occurring in the central part of the country, McClung said. But shipping time is the biggest factor in the state’s gain as importers realize Texas is the fastest route to get produce from the farm to the grocery shelf.

"In the produce industry, it’s all about product quality and shipping speed," McClung said, noting that Texas allows them to cut days off their schedule. "You can’t have quality or expedited movement if you don’t have the infrastructure for it. It’s not like automobile parts — it can’t sit for days in the heat."

Keeping imported produce cold has led to a proliferation of cooler space in Hidalgo County. Border Cold Storage opened in late 2008 with a capacity to refrigerate 170 truckloads of produce, juice and other foods, and two existing public warehouses are both adding 50,000 square feet of space to existing layouts.

Then later this year, Don Hugo Produce, a Chicago-based importer and wholesaler of Mexican produce, frozen products and avocados, will open a 227,000-square-foot warehouse in the produce park that will eventually offer nearly 1 million square feet of cold storage space.

José L. González, the president of Don Hugo, said Mexican importers realize they can save time and money by shipping through Texas once the Mazatlan-Durango highway is complete.

"In the last five years, the people in the produce business are building a whole bunch of warehouses" in Hidalgo County, González said. "I have said for almost 20 years that one day, the Valley is going to be bigger than Nogales, Ariz."

That time may be here soon. In 2009, the last year with available data, the Valley was only a small volume behind Arizona in fruit and vegetable imports. And that’s significant dollarwise, with McClung estimating the value of Mexican fresh fruit and vegetables at more than $6 billion.

Beyond distribution centers, a greater share of Mexican produce imports has a beneficial impact on the trucking business, food and gasoline retailers and lodging, said Jimmy Garza, the Pharr city councilman who is also director of operations for Bebo Distributing, a family-operated business that represents growers throughout Mexico and ships their produce across the United States.

Inside Bebo’s distribution center, where 90 percent of the product is imported through Mexico, employees de-stemmed boxes of jalapeños while others prepared the shipment for the Indiana grocer. Visible from the loading dock outside the warehouse, trucks traveled across the Pharr-Reynosa International Bridge, a stream of traffic Garza expects to soon come at a faster rate.

"As long as there’s a market for them, they’re going to keep coming across," he said of truck drivers carrying Mexican produce. "Everybody’s got to eat."