Narrative: e. 1. A.

Texas Agricultural Regions

Texas ranked sixth overall in value of agricultural exports in 2012, and eighth in fresh vegetable production, accounting for 2.1 percent of the U.S. total. Texas’ fresh vegetable production was valued at $439 million in terms of cash receipts that same year. The leading counties for vegetable acres harvested were Hidalgo, Starr, and Cameron. Other important counties were Frio, Uvalde, Duval, Webb, Hale, and Zavala. Texas also ranked tenth in fruit and tree nut production with production valued at $190 million.

Land preparation, planting, irrigating, and harvesting are ongoing activities. Therefore, agricultural employment occurs at numerous locations and at any time during the year. Usually, employment for farmworkers begins in the Lower Rio Grande Valley region, served by the Lower Rio Grande Valley and Cameron County Workforce Development Boards (Boards), and the Winter Garden and South/Central region, served by the Middle Rio Grande Board, and moves northward to the Texas Panhandle as the agricultural season progresses. Workers who follow this crop pattern may also migrate to other states.

Review of Prior Year’s Agricultural Activity in Texas

For the Program Year 2015 (PY’15) Agricultural Outreach Plan (Plan), TWC has used the last complete and readily available data. Although Texas regions support a wide variety of agricultural activities, data is not collected by a single entity using consistent time frames and methodologies. Data is limited for agricultural activities such as producing wheat, grain, and other crops, and labor demand production such as cotton ginning. Furthermore, available data sources do not collect production and forecast data based on a federal program year; for the purposes of this plan, calendar years are used when there is no other data available. TWC is working with agricultural associations and other sources to improve on the data available for future plans.

Table 1 summarizes the agronomic crop production statistics for each of Texas’ primary growing regions for Calendar Year 2012 (CY’12) and CY’13. CY’14 data is currently unavailable. Regional production statistics for horticultural crops are also unavailable at this time. For agronomic crops, the vast acreages of grain and row crops in the high plains and rolling plains make up most of the 11.3 million acres planted in the plains region. The eastern region of the state accounted for the bulk of the rest of agronomic crop production in Texas. Agronomic crops are typically less labor intensive, because more capital machinery is used in planting and harvesting as compared to most horticultural crops.

Table 1. Texas Agronomic Crop Production by Region, 2012-13

All data are from National Agricultural Statistics Service, USDA, and Texas A&M AgriLife Extension Service.

Review of the Prior Year’s Agricultural Worker Activity in Texas

The Lower Rio Grande Valley has the most labor intensive production, accounting for the majority of horticultural crops in Texas, followed by the Winter Garden and south/central regions. However, horticultural crops are grown throughout the state. Table 2 provides data on Texas vegetable production and average monthly labor with crop information for CY’13and CY’14. Fruit and vegetable production is typically the most labor intensive.

Table 2. Texas Vegetable Production & Average Monthly Labor, 2013-14

Calendar 2013

All data are from National Agricultural Statistics Service, USDA, and Texas A&M AgriLife Extension Service.

*Pecans are an alternate year crop.

Table 2. Texas Vegetable Production & Average Monthly Labor, 2013-14

Calendar Year 2014

All data are from National Agricultural Statistics Service, USDA, and Texas A&M AgriLife Extension Service.

*Pecans are an alternate year crop.

Projected Level of Agricultural Activity in Texas for the Coming Year

As seen nationally, some areas that historically have had high concentrations of agricultural work have experienced industry reduction relative to other types of work, such as in the oil and gas, construction, and retail industries. With that, there also has been a shift in the labor market. While some workers and their families who have long performed agricultural work are now being employed in nonagricultural industries, other workers are struggling to identify transferable skills that will allow them to obtain nonagricultural jobs. A good example is the Eagle Ford Shale boom in the Winter Garden region and the Cline Shale in west Texas. Oil and gas employers have a relatively large demand for qualified employees. Yet, they find few qualified applicants, in part because the local MSFW population lacks the relevant transferable skills and training. The industrial shift has created a challenge for agricultural employers, as well. Texas is designated as an agricultural supply state, yet many agricultural employers face diminishing laborers to meet demand. With other employment options available that may be less physically taxing, and fewer immigration controls in place, more workers seek nonagricultural jobs. The state’s major citrus growers’ associations have expressed concern that the labor shortage is one of their most critical issues.

Projected Migrant and Seasonal Farm Workers (MSFW) in Texas

According to data from the National Agricultural Statistics Service, USDA, and Texas A&M AgriLife Extension Service, TWC estimates 289,600 MSFWs in the coming year. Although it is possible that jobs may be lost due to natural disasters and other adverse events, the number of MSFWs that reside in Texas is anticipated to escalate. Currently, there are more than 9,200 active agricultural employers in Texas, based on the North American Industry Classification System codes reported for each employer’s unemployment insurance (UI) tax accounts.

Table 4 lists job postings for agricultural employers in Texas for PY’14 and PY’15.

Table 4 - Wagner-Peyser Act Services to Agricultural Employers

¹ Number of job postings does not accurately reflect the number of employers because employers may file multiple postings within a year. Each posting may contain multiple job openings.

² PY’14 and PY’15 data represents the July 1-June 30 period.

¹PY’14 and PY’15 data represents the October 1-September 30 period.

There are several economic, natural, or other factors that affect agricultural production in the state. These are in no particular order of importance, and more than one issue may exist at any given time:

• The cost of fuel
• Secondary sources of income related to energy production
• Varied weather patterns, ie, going from really dry years to really wet years seems obviously has a huge impact, and with a state as large as Texas, that typically varies by part of state
• Tax policy as it relates to succession from generation to generation - the high average age of farmers is part of this issue
• Various environmental policies enforced by Environmental Protection Agency and Texas Commission on Environmental Quality
• Immigration law and enforcement, particularly as it impacts the availability of labor for fruit and vegetable production but also in other ag sectors
• Invasive species coming from other part of the U.S. or from other countries which can negatively impact the productive capacity of Texas agriculture
• The changing nature of U.S. agriculture domestic policy to a more crop insurance based program
• The conversion of agricultural land to developed land, whether for housing or commercial uses
• Water availability impacted by things like weather, the increased need for urban water, and issues related to the U.S.-Mexico water treaty

Economic Impact of Imported Fresh Produce from Mexico

Produce imports from Mexico fuel significant economic activity in the Lower Rio Grande Valley of Texas. The U.S. imported $7.78 billion of fresh and frozen produce, with more than 98 percent entering by land ports between Mexico and Texas, New Mexico, Arizona, and California. When considering only fresh fruits and vegetables, which is more than 90 percent of the total, imports reached $7.65 billion. About 45 percent of U.S. fresh fruit and vegetable imports worth $3.44 billion entered through Texas land ports. Over the next five to seven years, produce imports from Mexico are expected to grow with the majority of this growth coming into the U.S. through Texas.

Based upon a linear trend forecasting approach, as shown below in figure 2, it is estimated that U.S. produce imports from Mexico via truck will increase nearly 32 percent. Most of this growth will occur through Texas ports, with imports expected to grow in the Lone Star State by 62 percent. By 2020, Texas is projected to account for slightly more than half of all U.S. produce imports from Mexico. This growth in imports has implications throughout the border economy, and the Texas economy in particular.

Concurrently, U.S. interest rates are expected to rise, causing the dollar to appreciate, which may spur even more imports. The improvement to Mexican Federal Highway 40 between Mazatlán and Reynosa will reduce transportation time by six or more hours between Mazatlán and the Lower Rio Grande Valley and shave $500 to $1,500 off of truck transportation costs per load. Actual import data through mid-August 2013 revealed that year-to-date total imports compared to 2012 are up by 13.8 percent; Texas is up by 26.2 percent. Fruit and vegetable imports from Mexico are projected to grow to 615,672 truckloads by 2020, or a 73.1 percent increase over 2012. Texas ports, mainly in the Lower Rio Grande Valley, will handle nearly 59 percent of these imports at 362,274 truckloads. Incorporating this information with input from industry experts from U.S. shippers and brokers and Mexican exporters, a revised forecast was developed as shown below in figure 3. This forecast incorporates a 30 percent growth rate for Texas imports for 2014 and 2015 before returning to the previous trend.

Figure 2.

http://www.texasworkforce.org/development/wioa-csp-appendix-4-p-8.pdf

Figure 3.

http://www.texasworkforce.org/development/wioa-csp-appendix-4-p-9.pdf

Estimated Economic Impact

The economic impact of produce imports on agricultural and farmworker activity in the State is compelling. Direct economic activity attributed to the produce import industry was $136.9 million during 2012, requiring an additional $148.6 million from supporting industries for a combined impact of $285.5 million. By 2020, this impact is expected to grow to $312.0 million in direct activity and $338.7 million in supporting activity for a total $650.7 million ripple throughout the Texas economy. Direct output will be led by the truck transportation and warehousing sectors ($90.6 million each), followed by sorting, grading and packing ($76.5 million) and customs brokers ($54.3 million).

About 6,920 jobs will be required across Texas to support import operations. Sorting, grading, and packing required 2,086 jobs; warehousing, 1,087 jobs; truck transportation, 746 jobs; and customs broker services, 450 jobs.

Table 3. Summary of Economic Activity from U.S. Produce Imports from Mexico over Land Borders, 2012 and 2020 Forecast with Industry Input

Source: Agricultural Marketing Service, USDA and Department of Agricultural Economics, Texas A&M University/Texas A&M AgriLife Extension Service/Texas A&M AgriLife Research