Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Winter freeze devastates Texas produce industry; $100 million industrial park to be built near U.S.-Mexico border; USITC determines blueberry imports don’t harm U.S. growers; and CBP seizes marijuana worth $1.1 million.
Winter freeze could devastate Texas produce industry
The arctic blast that barreled through Texas last week dealt the Rio Grande Valley produce industry a blow, harming crops and potentially damaging future groves in the region.
The weather event was one of the worst the Rio Grande Valley has ever seen, said Tommy Wilkins, director of sales at Donna, Texas-based Grow Farms Texas.
“I have been in the business for 45 years and I do not recall this widespread cold and the temperature level they got down to, and for a significant amount of time it stayed down,” Wilkins told FreightWaves.
Grow Farms Texas is a grower, distributor and shipper of everything from bell peppers, eggplant and squash to red cabbage, sweet onions and avocados.
“This will be a major hit to growers across the board. It will be a couple of days before we see the total extent of damage,” Wilkins said.
The Rio Grande Valley is the epicenter of the Lone Star State’s produce industry. The area stretches across the southeastern tip of Texas along the U.S.-Mexico border. The region includes cities such as Donna, Edinburg, McAllen, Mission and Pharr.
More than 35 types of fruits and vegetables are grown in the Rio Grande Valley, including grapefruit, oranges, avocados, cabbage, aloe vera, onions, cotton, sugarcane and watermelons.
The produce industry in the valley includes cold storage warehouses, wholesalers, distributors, customs brokers and transportation companies.
The winter freeze will affect the entire industry, from growers to shippers to packing and transport drivers, said Dante Galeazzi, president of the Texas International Produce Association.
Along with the freezing temperatures, the Rio Grande Valley like most of Texas had to contend with blackouts that affected millions across the state.
“The loss of power has been a tremendous issue. It makes accessing product in the warehouses nearly impossible,” Galeazzi said. “Most forklifts are electric now, so without a way to charge that equipment there was no way to move pallets of product in warehouses without power.”
Galeazzi said power began returning to the valley around Wednesday for many businesses, and warehouses were coming back online.
“Unfortunately, we’re seeing there are no trucks to move product out of these warehouses. Equipment is being delayed throughout the state by snow, icy roads, sleet and freezing rain,” Galeazzi said. “Even if you could get a truck, how would they get out of the area with all the fuel shortages?”
FreightWaves’ Reefer Outbound Tender Reject Index for Texas (ROTRI.TX) shows reefer rejection rates rising from near 27% on Feb. 11 to almost 32% on Thursday. Reefer rejections for Houston (ROTRI.HOU) rose from 36% to 61% over the same period, while Dallas (ROTRI.DAL) reefer rejections hovered around 28% for most of the week.
The increase in reefer rejections in Houston and across most of Texas is an indication carriers have less availability, which is pushing rates back up.
“I heard [Thursday] morning that there was several hundred loads posted available, and something like five trucks available with transportation rates for spot market transactions several thousand dollars higher than the week prior in the same lanes,” Galeazzi said.
Wilkins said the freeze will force his company to change shipping strategies this season.
“We will not load the truckload volume like we would have for sure in previous years,” Wilkins said. “Citrus, onions, dry vegetables, watermelons, what an unfortunate blow to farmers who give it their all.”
April Flowers, director of marketing for Lone Star Citrus Growers (LSCG), said it is too soon to tell how much damage the freeze caused to their groves.
“It will take several weeks to get a clear picture of the extent of the damage, but we already had an early bloom on some trees that was lost in the freeze, so we’ll likely have a smaller crop next year — the jury is still out on that estimate,” Flowers said. “The next several weeks will provide a clearer picture as the trees defoliate and then have an opportunity to flush.”
LSCG is based in Mission, Texas. The company is a grower, packer, marketer, juicer and shipper of Texas red grapefruit and oranges.
Flowers said part of the company’s crop hadn’t been harvested when the freeze hit on Feb. 14.
“LSCG was fortunate in that we only had about 15% of our remaining crop still hanging on the trees,” Flowers said. “That fruit won’t make it to the fresh market, and it is now being harvested for juice. I have heard other grower estimates as high as 50-60% still on the tree.”
Bret Erickson, senior vice president of business affairs at J&D Produce, said their vegetable crop was severely damaged.
Edinburg, Texas-based J&D Produce is a grower and shipper of fresh greens, honey sweet onions and melons.
“We are still assessing all of our crops with the hope we may be able to salvage some of our items, but only time will tell,” Erickson said. “As far as onions, we are cautiously optimistic that we may have avoided a complete loss, but again, we still need more time.”
Erickson said although there is still a lot of uncertainty on what the final damage will be, “there is no question that this was a very damaging weather event for all vegetable and citrus producers in our region.”
$100M industrial park to be built near US-Mexico border
Construction recently began on a $100 million, 50-acre industrial park called the Landmark at Otay near the U.S.-Mexico border in Southern California.
The Landmark at Otay will be 845,830 square feet of Class-A development spread across four buildings ranging in size from 153,630 to 240,975 square feet.
The project aims to take advantage of the growing commercial traffic near the Otay Mesa port of entry, as well as infrastructure improvements near San Diego, according to Tom Simmons, vice president of Majestic Realty Co.
“Low vacancy rates and need for additional industrial inventory make this the ideal time to bring Landmark at Otay to market and open up opportunities for additional companies to expand — in this important geographic market,” Simmons said in a statement.
California-based Majestic Realty is developing the Landmark at Otay in a partnership with Sunroad Enterprises and Colliers International Group.
USITC determines blueberry imports don’t harm US growers
After a six-month investigation, the U.S. International Trade Commission ruled that imported blueberries “do not seriously injure” the domestic blueberry industry.
The 5-0 ruling by USITC commissioners ends an inquiry that could have resulted in recommendations of tariffs on imported fresh and chilled blueberries in order to protect U.S.-based growers.
Mexico is one of the leading suppliers of blueberries to the U.S., accounting for $219 million worth of imports in 2019, according to the U.S. Department of Agriculture. Peru was the top supplier of blueberries to the U.S. in 2019, accounting for $485 million.
The determination was hailed as a victory by the Fresh Produce Association of the Americas (FPAA), a Nogales, Arizona-based group representing produce importers.
“While FPAA is pleased with the determination, FPAA remains extremely concerned by the number of trade investigations opened recently by U.S. Trade Representative on imported produce, especially key commodities from Mexico, our No. 1 trade partner,” the group said in a statement.
CBP seizes marijuana worth $1.1M in Laredo
U.S. Customs and Border Protection (CBP) agents in Laredo, Texas, recently discovered 5,280 pounds of alleged marijuana in a tractor-trailer.
The seizure occurred Feb. 13 at the World Trade Bridge cargo facility. Officers found 336 packages of alleged marijuana in the trailer of a tractor hauling auto parts from Mexico. The narcotics have an estimated street value of $1.1 million.
The case was turned over to the Department of Homeland Security Investigations.
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