Regional Branding Boosts New Mexico's Chile Pepper Industry

Feb 1, 2019  | 6 min  | Ep4424

The Super Bowl, for many, is mostly about commercials, camaraderie, and maybe even a little football. But let’s face it, food is the real star of the weekend. Each spread is different but all will likely contain something with a little pepper induced heat.

Chile peppers compete on the same field as award-winning wine with soil and weather conditions influencing taste. But the battle for branding is only part of the marketing mix for the nation’s growers.

Josh Buettner has more in our Cover Story.

In the Land of Enchantment, New Mexico’s signature farm commodity casts a spell on the taste buds – sparking a fiery debate.

Reporter: “So the big question: red or green?”

Robert Gonzalez/Algodones, New Mexico: “Green.”

Karleen Gonzales/Algodones, New Mexico: “Red.”

Chile peppers - green or red - have enriched the southwestern palate for longer than apple pie has been American.

Sergio Pendragon/Pedregon Family Farms – Hatch, New Mexico: “We let it tumble in there and the skin just comes right off.”

Marti Heath/Mesa, AZ: “Green chiles make everything better!”

John Heath/Mesa, AZ: “Oh yeah. We eat them on everything.”

Every year, tourists flock to the small town of Hatch, New Mexico, the self-proclaimed Green Chile Capitol of the World, to celebrate and devour a fresh harvest.

Frank Martinez/Jackson, Tennessee: “I just love this place. I’ll probably be back next year to buy more chiles so I can have it all year long.”

More lucrative green, New Mexico chiles turn red the longer they stay on the vine – offering a different taste profile and dried powder.  The crop has entwined with local identity.  Hanging ristras are symbols of health and good luck.  And New Mexico has enjoyed good fortune as the national leader in chile pepper production - though fault lines may be appearing.

Dr. Jay Lillywhite/NMSU: “If you look at production in the United States in 2016, California accounted for about two thirds of that production and New Mexico accounted for slightly under a third.”

Dr. Jay Lillywhite is an agricultural economist with New Mexico State University – where hybrid research done over century ago gave birth to today’s robust strains. And on campus in Las Cruces, the Chile Pepper Institute continues to educate and promote and industry he claims is worth over $400 million annually.

Lillywhite adds that although New Mexican chile production has ceded 35,000 acres from the early 1990’s to down around 8,000 today, the state’s processing infrastructure still beats out domestic competition.  But pressure from other states, and Mexico, have some digging deeper as a buffer against disruption.

Dr. Jay Lillywhite/NMSU: “There’s only so much chile that can be grown in the Hatch region and only so much chile that can be grown in New Mexico. And as that demand continues to increase, if you can actually build a marketing campaign around that, there will obviously be premiums.”

Hatch Valley growers have adopted a distinct branding strategy to distinguish their product from a host of others.  Adjacent to the Rio Grande, the region has long been hailed for its unique blend of favorable soil and climate conditions.

Preston Mitchell/Owner - M&H Produce/Hatch Chile Store: “The Hatch Valley here in southern New Mexico has become synonymous with high quality green chile.”

Grower Preston Mitchell says yields here average 20 to 30 tons per acre – with prices ranging from $500 to over $600 per ton for green varieties. 

Preston Mitchell/Owner - M&H Produce/Hatch Chile Store: “You can hear that nice crisp pop as it pops open.  Tear that pod open and you’ll see just a thin little yellow strip running up that vein and that’s the capsaicin in the pod that you taste as heat.”

Labor costs can bite into profits because harvest is done by hand.  Mitchell says finding workers is a challenge in itself.  Mechanization – long rumored – remains elusive - and drought - all too abundant.

Gary Esslinger/Treasurer-Manager/Elephant Butte Irrigation District/Las Cruces, New Mexico: “Ninety-five percent of the water that fills up Elephant Butte comes from snow pack runoff and we just haven’t had it in since 2003 on a regular basis.  We may have one good year, maybe two and then nothing….”

Elephant Butte Irrigation District covers over 90 thousand acres of irrigable land in southern New Mexico.  Manager Gary Esslinger says low levels in reservoirs on the Rio Grande north of Hatch helped force ratepayer allotments down from an average 3 acre-feet to just 10 inches in 2018.  But a complicated set of decades-old agreements also legally require the utility to satisfy surface water deliveries downstream first - to Texas and Mexico.

Gary Esslinger/Treasurer-Manager/Elephant Butte Irrigation District/Las Cruces, New Mexico: “We certainly have to abide by the law and yet try our best to supply the water that’s necessary to these farms.  And it’s a constant battle…and the litigation is always flowing here.  It never stops.”

E-B-I-D has been at the center of legal wrangling between the federal government, Colorado, New Mexico and Texas for over a decade in regards to water rights under the Rio Grande Compact agreement.  The case is expected to go to before the U.S. Supreme Court next year.

And it’s a gamble for New Mexico, says Esslinger, adding that new stakeholders, ushered in by recent population booms, are unfamiliar and unwilling to compromise with water laws drawn up over 80 years ago.

Gary Esslinger/Treasurer-Manager/Elephant Butte Irrigation District/Las Cruces, New Mexico: “It’s the public at large that really doesn’t understand the complexity of how we have to operate down here.  It’s really easy for me to explain to a farmer what’s going on because of the drought.  Most of these farmers have been here three and four generations.  Some of them even five.”

Preston Mitchell/Owner - M&H Produce/Hatch Chile Store: “My great, great grandfather is actually credited with being the first chile farmer in the Hatch Valley.  His name was Joseppi Franzoy and he was an immigrant from Austria.”

Preston Mitchell’s operation mostly pumped ground water to irrigate crops during the past season.  But over time, only salty, brackish water is left in uncharged aquifers – making an infusion of fresh Rio Grande river water essential.

Preston Mitchell/Owner - M&H Produce/Hatch Chile Store: “The drought is a major concern to growers in this area.”

Mitchell has had to grow his business to remain profitable.  Expanding acres, processing and roasting chiles have all become a part of the mix.  As word spreads, and orders for Hatch Valley green chiles come in from across the globe, Mitchell reiterates regional branding is a vital ingredient for future growth.

Preston Mitchell/Owner - M&H Produce/Hatch Chile Store: “Hatch chile is sought for by buyers at grocery stores such that they will not take chile from elsewhere.  So it kind of allows us to have this little niche within the overall green chile market and continue to be able to farm profitably.”

For Market to Market, I’m Josh Buettner.







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