New Mexico’s Chile Farmers Stung by Cut-Rate Competition

The mayor of this southern New Mexico town won’t eat a plate of eggs unless they’re smothered with chile sauce.

Gilbert Bartlett loves the tongue-singeing peppers.

“I get my chile bottle out and I have a little for breakfast, lunch and supper,” he said. “I love that hot chile and can eat it as hot as anybody.”

Bartlett lives in the heart of the Hatch Valley--the largest chile-producing area in the nation. The valley is covered with rows and rows of what has become over the last century the state’s most valuable vegetable crop.

Farmers this season are harvesting what they call one of the best crops in years. However, they are grappling with an uncertain future as market prices for chiles, onions and other commodities spiral downward and the number of imports continues to rise.

And, in a state that so loves its chile it has become the de facto state symbol--the hot peppers adorn everything from road signs and T-shirts to dish sets and jewelry--many farmers have cut back on the acres they grow, and some are considering getting out of the business.

“Chile really transcends being just a crop in New Mexico,” said Paul Bosland, director of the Chile Pepper Institute at New Mexico State University. “It’s really part of culture, part of our essence, part of our experiences.”

Bill Gomez, an economist with NMSU’s Cooperative Extension Service, said a consistent increase in imports has left many New Mexico farmers with overstocked warehouses and no growing contracts.

New Mexico’s raw chile crop has brought in an average of $55 million a year for the last 10 years. When processing--turning the peppers into products ranging from salsa and canned jalapeno slices to food coloring--is added, the industry is worth about $250 million a year.

About 80% of the crop is grown for processing, while the other 20% is for fresh market.

Competition heated up in the mid-1990s as the pepper industry started turning its sights toward the global market. Chiles from Mexico trickled through New Mexico ports of entry until 1995, when imports skyrocketed from 5,700 pounds to 48,500 pounds a year.

Many farmers blame the North American Free Trade Agreement for the increase in imports. NAFTA, which took effect in 1994, was designed to eventually do away with tariffs on imported goods.

“Mexico has been coming in with that cheap chile, and we can’t compete,” said Alex Franzoy, an 89-year-old farmer whose father was the first grower in the Hatch Valley to raise chiles for market.

Franzoy’s father planted about 10 acres of chile north of Hatch and sold his peppers for 10 cents a pound. Today Franzoy is working hard to make just $1 more a pound than what his father made years ago.

“My No. 1 chile is selling for only $1.30, and sometimes I can’t even get that,” Franzoy said. “We can’t afford to grow it for that price.”

Bartlett believes New Mexico’s peppers will remain a force in the market despite the low price of chiles funneled in from outside the country. He said the reason is taste.

“There’s just something about the soil here that it just turns out with a better flavor,” he said.

Bosland said the state’s intense sunlight and cool nights result in a unique flavor.

People do not realize a New Mexico pod type tastes different from a bell pepper and jalapeno, he said. The taste, which is often hidden beneath the singe of the pepper, is different from varieties grown elsewhere.

Farmers, who began harvesting their crops in August, are thanking a gentle growing season for keeping pests and plant viruses at bay. Their thanks is delivered with last year’s disastrous season in mind.

Farmers lost millions of dollars as inclement weather and a wave of diseases and viruses battered the chile plants. Thousands of acres were left with wilted, fruitless stands.

According to statistics from the New Mexico Department of Agriculture, the number of acres harvested in New Mexico has dropped 25%, from 21,500 in 1998 to 16,200 in 1999. That’s down 18,300 acres from the peak in 1992.

Nearly 400 farmers scattered throughout the state raise chile. Many families have been growing the hot peppers for decades.

Dickie Ogaz, who has been growing chile for nearly 40 years and now tends about 120 acres, said that he grew up helping his father with the farm and that his sons followed in his footsteps until they went to college. Ogaz’s youngest son decided to stick with farming, while his other two became engineers.

Ogaz and other farmers say the family affair could soon become a thing of the past.

“It’s already happening here in our community and everywhere else. There’s no money in it,” he said. “When I started farming, you could make a good living with a little bit of land. But now you can’t; everything is so expensive.”

Chris Franzoy, another member of the 500-strong Franzoy family, is also aware of the inherent gamble of farming.

“People tell me that the stock market is a gamble,” he said. “But if you ask a farmer in his opinion what is more risky, investing $100,000 into his farming operation or investing $100,000 in the stock market, he would tell you he’d rather invest it in the stock market.”

Franzoy said he was born into chile farming, but he believes his children will likely have a different livelihood.

“I will definitely discourage them against farming because everything is against us,” he said as he looked across hundreds of rows of 2-foot chile stands.

Franzoy said he believes farmers are faced with big problems as long as there is a trade agreement with Mexico.

“The garlic and tomato people squeal. They got enough of them together and managed to get the government’s attention and have a tariff imposed. We have a tough time,” he said.

Bartlett said that during his 53 years in the Hatch Valley he has watched the farming community dwindle. Now, he said, only a dozen families farm there.

“People can’t figure out why businesses have had to close up in Hatch over the years,” he said. “That’s not hard for me to figure out when you got 40 or 50 farmers in the valley making a living and then a dozen farmers take over the land.

“It’s getting hard for these little towns.”