The New Mexico Chile Pepper Industry: Description, Labor Issues,

and Economic Impact

Presented By: Teri Hall

Objectives:

1. Describe the New Mexico Chile Pepper Industry

2. Describe the current labor situation and labor issues relevant to the New Mexico chile pepper industry;

3. Provide estimates of the industry’s employment and economic impacts on Doña Ana County;

4. Evaluate the economic effects of industry changes.

Agriculture and the Chile Pepper Industry in New

Mexico and Dona Ana County

Chile Pepper Imports From Mexico Through New Mexico Ports of

Entry

0

10,000

20,000

30,000

40,000

50,000

60,000

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

Me

tric

To

n

Chile Pepper Acreage Harvested in 1999

New Mexico Chile Pepper Industry

Green Chile Red Chile

Red Chile Powder

Spice Mixes

Mash

Canned

Dried/Dehydrated

Oleoresin

Frozen

Fresh

New Mexico Chile Industry

Branded Products

Color Extraction

Food Coloring

Product Mixes

Wet Processed(Retail, Industrial, Food Service)

Red Chile Paprika

Flakes

Pods

Powders

Livestock Feed

Dried/Dehydrated

Dried/Dehydrated

By-Products

Jalapeno

Canned Frozen

Fresh

Branded Products

Product Mixes

Dried/Dehydrated

Cosmetics

Capsaicin Extraction

Wet Processed(Retail, Industrial, Food Service)

Cayenne

Spice Mixes

Dried/Dehydrated

Powders

Chile Peppers processed in Southern New Mexico by chile type

and growing regionGreen Chile

and Cayenne Peppers

(tons)

Jalapeno (tons)

Green Chile Peppers and

Jalapenos (tons)

Red Chile Peppers

(tons)

Mexico 22,650 11,100 0 1,500

USA1 3,150 4,440 0 0

Texas 0 0 0 67

New Mexico2 29,550 1,850 2,250 7,243Dona Ana County 16,304 1,110 5,032 15,675

Other3 9,797 3,518 1,258 12,250

Total 81,451 22,018 8,540 36,735

• 10,000 farm laborers• 3rd grade education• 100% Hispanic

descent• 40% U.S. citizens• 20-40% illegal

immigrants working• Average family is 4.2

people• Average household

income is $7,000/year

Demographics characteristics of hired farm workers in Doña Ana County

Source: Local interviews and previously published material

Labor as a percentage of production cost for hand and mechanical chile harvest in Doña Ana and Sierra Counties, 1995, 1997, and

2000.

*Labor cost divided by total production costs.Source: Eastman, 1997

  Hand Mechanical

1995 1997 1995 1997

Red Chile 41.22% 49.07% 9.71% 11.56%

Jalapeños 42.57% 47.16% 6.54% 7.79%

Total estimated industry workforce needed by month

Source: Eastman, 1996, Processor interviews conducted 5/2001-9/2001

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

January April July October

Chile PepperProduction

Dona Ana County ChilePepper Processing

Luna County ChilePepper Processing

Regional Chile PepperProcessing (includingDona Ana and LunaCounties)

IMpact Analysis for PLANning (IMPLAN)

• Direct effects• Indirect effects• Induced Effects• Backward linkages• Full-time equivalents

Green Chile Pepper, Jalapeño, and Red Chile Industry Input-Output Modeling-Doña Ana and Luna

Counties Combined

Sector Industry Direct Indirect Induced Total26 Agricultural-Forestry-Fishery Service 0.0 1,534.4 3.8 1,538.218 Vegetables 699.0 64.4 0.9 764.367 Canned Fruit and Vegetables 649.0 2.1 0.1 651.2

103 Food Preparations-NEC 278.0 1.6 0.9 280.6447 Wholesale Trade 0.0 207.5 16.9 224.568 Dehydrated Food Products 142.0 0.9 0.0 142.9

435 Motor Freight Transport and Warehouse 0.0 125.4 8.1 133.5454 Eating and Drinking 0.0 31.8 81.9 113.856 Maintenance and Repair Other Facilities 0.0 88.3 10.2 98.5

474 Personal Supply Service 0.0 71.4 10.1 81.50 All Other 0.0 538.5 550.6 1,088.8

1,768.0 2,666.3 683.5 5,117.8Total Employment Impact

Source: IMPLAN 2001, Model Output

Summary

• Thesis objectives– Chile pepper

processor interviews– Description of the

chile pepper industry– Review existing

information– Application of

IMPLAN

Implications

• Inaccurate and limited industry data

• Significant “employment” economic impacts on the local economy

Shortcomings

• Exercise caution when looking at results

• Backward linkages• Accurate

representation of the local economy

• Agriculture employment data

Recommendations

• Unanswered questions

• Create new sector within IMPLAN

Questions?