The Future of Hatch, NM Chile

Every year, it seems that media organizations love to talk about how there is a shortage of green chile. I doubt that we will run out of delicious roasted chile any time soon. That being said, there are some problems facing green chile that will lead to price increases outpacing inflation.

Problems facing chile in New Mexico

Water

Water is perhaps the number one issue facing chile production in New Mexico. The fact is, we are a desert state that doesn’t get a lot of rain or snow. To make matters worse, much of the water that we do have is used in inefficient ways, such as golf courses and growing grain for the beef industry. In order to increase beef production, there are massive federal subsidies on cattle feed such as alfalfa. Water that goes toward feeding cows in Texas is water that does not go to chile in New Mexico. Restricting water usage on things that don’t provide human food is perhaps the easiest way to fix this problem, but the beef industry is incredibly powerful.

Labor

An open secret among the chile community is that many chile pickers are illegal immigrants. The fact is, picking chile is a grueling job requiring someone to hunch over a 2 ft chile plant in the summer sun with no shade all day. There are few ways to really improve this. It is just an incredibly difficult job with fewer and fewer people wanting to do it. Many people are attracted by the high wages, but end up washing out after only a day or two. This is perhaps the problem with the most difficult solution, as young people everywhere seem to be uninterested in farm work.

Fertilizer

The war in Ukraine has increased the prices of fertilizers by a huge amount across the world. The results of this are often lower yield per acre and increased cost of production. This problem will hopefully be solved once Russians depose Putin and leave Ukraine. Whether this happens in a year or five is anyone’s guess. A Ukrainian defeat will likely cause this problem to be much longer term, as Russia and the US have no hope for positive discourse in the near to mid future, unless Putin is blamed as the fall guy.

Some reasons for optimism

Hatch chile is becoming more popular

It seems that around August, grocery stores all around the US are carrying green chile. Although the chile that grocery stores like to deal with is bred specifically to pass federal produce grading standards and not for spice or flavor. There is a reason why most chile in New Mexico is sold in burlap sacks, while outside of New Mexico it comes in boxes. Regardless, the increased demand puts higher pressure on farmers to produce chile, regardless of problems facing its production.

New Mexicans will fight for chile

I firmly believe that once people realize that chile is in trouble, more people will come forward and fight for more water to be reserved for growing chile. The entire American southwest is facing a growing water shortage, but it should not be allowed to impact something so integral to our local culture as New Mexico chile.

My predictions for the future of NM chile

I believe that the average cost for a sack of chile will rise by about 10% a year going forward. Unless we get winters with a lot of snow, there will be supply side cuts which will raise the cost for both wholesale and retail. Although chile will get more and more expensive, there will still be plenty of chile available in New Mexico. Most likely there will be less and less retailers like ourselves selling, as it is getting harder and harder to do business. When prices go up, people blame us and other retailers like us for the increase. Although revenue is rising for us on a yearly basis, profit is decreasing. The trend of chile is to go up, simply because most of the production inputs are also getting more expensive. Rising cost of living is pushing the price up even further.