Imports of Mexican Fresh Produce Kept Arizona Trade from Tumbling Even Farther

For well over a century, fresh fruits and vegetables grown during winter months in Sinaloa and Sonora have been shipped north through Arizona. From the very early days when the markets were localized in Arizona, the industry developed into multi-billion dollar businesses serving markets all over the United States and a large part of Canada. Even with rising competition from other ports along the U.S.-Mexico border, Arizona’s major port of entry, Nogales, had remained one of the top gateways for Mexican fresh produce into the U.S.

As other economic links started developing across the border – most notably production sharing within the maquiladora framework since the 1960s, and strengthening manufacturing integration under the first North American Trade Agreement (NAFTA) in early 1990s – fresh produce imports were overshadowed by manufacturing product imports in the total trade statistics. In the second decade of the 21st century, imports of fresh produce through Arizona ports of entry accounted for between 15% and 20% of total imports. During the 2020 pandemic, imports of fresh produce climbed close to a 25% share of total imports from Mexico through Arizona ports. This increased share in total imports resulted not only from a sharp decline of manufacturing products, but also from an actual increase in the dollar value of imported vegetables and fruit.

Which of the fresh produce categories have contributed to these overall high levels of imports? Have any shifts occurred in the composition of imported fresh produce that could be linked to the impact of the pandemic? How does Nogales, the “king” of imported tomatoes and grapes, compare with its competitors the two other major fresh produce importing ports in Texas, Hidalgo and Laredo?

While Still Dwarfed by Manufacturing Imports, Fresh Produce Gained Ground 

As shown in Figure 1, since 2015 the dollar value of imported fresh produce through Nogales District[1] had been on a slow but steady rise. In 2020, the combined value of imported vegetable and fruit was more than $3.8 billion, an increase of 6% from 2019 [2]. At the same time, manufacturing imports fell 17.2%. The decline in imports of all other commodities was less dramatic, remaining in the vicinity of 3%.

Figure 1. Nogales District: Imports From Mexico, 2015-2020

Vegetable Imports Unscathed by the Pandemic, Unlike Fruit and Most Other Commodities

As demonstrated in Figure 2, imports of vegetables through Nogales District ports in 2020 did not slow down, but rather exceeded the dollar value of the previous year. Aside from a short decline in 2017 – largely due to “tomato wars” between Mexican tomato importers and Florida tomato growers – imports of vegetables through Arizona had been on the rise during the last five years. In 2020, vegetable imports were valued 41.7% higher than in 2015. At the same time, fruit imports, while 20.8% higher than in 2015, experienced a decline of 12.2% from the pre-pandemic year. By comparison, all other commodities declined in value from both the 2015 and 2019 levels 23% and 33%, respectively.

Figure 2. Nogales District: Imports from Mexico (2015 = 100)

Tomatoes in Top Position, Exceeding 2019 Imports by $183.1 Million

Between 75% and 80% of imported Mexican vegetables through Nogales District ports have typically been composed of four major vegetable types: tomatoes, peppers, squash, and cucumbers [3]. In 2020, these four vegetables were worth more than $2 billion, or 76.9% of the total $2.7 billion total for imported vegetables. Most recently, lettuce overtook asparagus in the fifth place after reaching imported value of more than $100 million, but still trailing at distance behind the top four. As shown in Figure 3, tomatoes, squash, and lettuce were the major contributors to the overall increase in the value of vegetable imports in the pandemic year 2020 as compared to 2019. Imports of tomatoes also increased in volume (over 10%), but lettuce topped the list with a more than 60% increase in volume from a year ago [4].

Figure 3. Top Vegetable Imports Through Nogales District

Grapes in Top Position Among Imported Fruit

At the Nogales District ports, and especially at the port of Nogales itself, grapes have grown in importance among fruit imports from Mexico. In fact, since 2015, imported grapes climbed to reach the top position replacing the long-time leaders melons and papayas. In 2020, imported grapes were valued at $502 million, which made them overall number 3 among all fresh produce imports, following tomatoes and peppers, two Nogales favorites. Other imports in the fruit category were melons and avocados, as shown in Figure 4. Dollar-wise, imports of grapes experienced the largest over-the-year decline in 2020 falling 17.3%, but still remaining in the top position. Melons in second position were also affected dropping 14%, while third-positioned avocados appeared to be least affected among the top fruit imports, declining 5.2%.

Figure 4. Top Fruit Imports Through Nogales District

Among Southern Ports, Nogales’ Trend in Vegetable Imports Remains in Middle Range

With the exception of El Paso, Texas, all major southern ports experienced an increase in value of imported vegetables from Mexico during the pandemic year 2020 compared to 2019. Vegetable imports in 2020 were also valued above those in 2015. As shown in Figure 5, Texas’ giants Laredo and Hidalgo were leading with the highest growth rates, while Nogales and Calexico followed in the middle range ahead of Otay Mesa.

Figure 5. Vegetable Imports from Mexico Through Southern Ports of Entry (2015 = 100)

Nogales’ Fruit Imports Were More Affected Than at Laredo and Hidalgo

Figure 6 compares trends in the last five years in imports of Mexican fruit through five major southern ports of entry. With the exception of El Paso port, imported values in 2020 were higher than they were five years ago at every port, with Laredo, Hidalgo and Otay Mesa experiencing the highest growth rates when compared to 2015. In 2020, Texas’ port Hidalgo, the major gateway for Mexican fruit imports – most notably avocados – barely held even in imported value over 2019. However, the second largest fruit importer, Laredo, was the only southern port of entry with a higher value of fruit imports in 2020 compared to 2019. A 13% drop at Nogales port was deeper than at Otay Mesa (-1.5%), but not nearly as drastic as at El Paso (-77.3%).

Figure 6. Fruit Imports From Mexico Through Southern Ports of Entry (2015 = 100)

Nogales – The King of Grapes

While Nogales holds a top position among southern ports as the “king” of tomatoes, it is less known that the port deserves yet another “royal” title with respect to imports of grapes. As demonstrated in Figure 7, in the last two decades, Nogales has dominated the imports of Mexican grapes [5]. Geography is the main contributing factor. Sonora is the main producer of grapes in Mexico, accounting for approximately 85 % of the entire harvest in Mexico [6]. Early grape varieties are shipped between May and mid-July using a window between grapes imported from Chile and Peru in winter months, and domestic grapes from California in summer [7]. Until 2020, Nogales accounted for more than 98% of all imported grapes from Mexico. In 2020, for the first time, Nogales’ share fell by a notch to a still overwhelmingly dominant 96.8%, resulting from the combined impact of a decline at Nogales and a slight increase in imports through Hidalgo, Texas.

Figure 7. Dollar Value of Grape Imports from Mexico, 2003-2020

Nogales’ Position Remained Unchanged

At the end of the (first) pandemic year 2020, Nogales had remained in the leading position among all southern ports of entry for Mexican vegetables. As shown in Figure 8, Nogales port accounted for 30% of all imported vegetables from Mexico ahead of Laredo (21%) and Hidalgo (19%). The two largest California ports for imported vegetables, Calexico and Otay Mesa, facilitated less than 10% each.

Figure 8. Vegetable Imports from Mexico Through Southern Ports of Entry

In imports of Mexican fruit, Nogales has remained in third position with a 14% share, still trailing behind the overpowering ports of Hidalgo (37%) and Laredo (26%), Figure 9. Hidalgo and Laredo rose to top positions thanks to the popularity of Mexican avocados, but Nogales remains the king of grapes. 

Figure 9. Nogales' Position in Fruit Imports Through Southern Ports of Entry

Importance of Fresh Produce Imports

While the major purpose of presenting these data is to illustrate the impact of the pandemic on cross-border commodity flows, they are only a tip of an iceberg of complex and multi-layered economic relations within the North American fresh produce industry. It is truly astonishing that the flow of fresh produce from the fields in Mexico to the consumers north of the border were much less impacted by the pandemic, unlike the manufacturing industries or movement of people. The trade statistics suggest that there were no major disruptions either in production or delivery to the border, suggesting further that jobs associated with the production, packaging, transportation and marketing operations were not impacted in the same way as jobs in manufacturing industries. In the economy of Nogales and Santa Cruz County, where a significant portion of local jobs and incomes depend on the fresh produce industry, these results are indeed encouraging in that jobs were preserved in this industry and this in turn helped to buffer the overall impacts of this extraordinary economic downturn.