Mexico is a critical supplier of vehicles, car spare parts, electrical machinery, chemicals and agricultural products. Nearly $ 9 billion worth of fresh produce crosses the Texas-Mexico border each year, said Dante L. Galeazzi, CEO and president of the Texas International Produce Association. And last week, this product was held hostage, with businesses and goods “being used as bargaining chip,” Galeazzi said. What used to be a regular border crossing turned into a 30-hour wait for some trucks. Meanwhile, the fruits and vegetables in these trucks spoiled, leaving some shelves of product parts sparse or empty before the holiday weekend, he said. “It could take a week or more, possibly three weeks, before the supply chain is re-aligned,” Galeazzi said. In recent days, Abbott has met with the governors of the four Mexican states bordering Texas and reached agreements to end heightened controls. On Friday, after a meeting with the governor of Tamaulipa, Abbott said trade controls would end immediately. The “economic pain” was a necessary consequence of “making the public insist on the leaders of his government” to take action to curb illegal immigration, Abbott said.
“One thing after another”
Losses for fruit and vegetable growers are estimated at more than $ 240 million, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. Consumers will also pay a price as producers try to make up for some of their losses and their supplies run out. Americans can expect to spend more on strawberries, avocados and asparagus as soon as this weekend, with the effects feeling heavier in the Midwest and Northeast, Jungmeyer said. “This is not just a local issue,” said Jerry Pacheco, president and CEO of the Border Industrial Association of New Mexico. “It will hit you in St. Louis or Seattle. We are connected to a global supply chain.” “It’s a bad time to add it to consumers’ pockets to pay for their pocket money,” Jungmeyer said. At the El Corral supermarket, a specialty Mexican grocery store and meat market in Stephenville, Texas, co-owner Santos Avila was warned of shortages by his beer suppliers due to the late arrival of the glass in the US from Mexico. “It’s just one thing after another,” Avila said, noting price increases and product shortages over the past two years due to supply chain disruptions caused by the pandemic. In places like Luna’s Mexican Restaurant in San Francisco, Wisconsin, where prices have not yet risen as a result of delayed shipments from Mexico, the mere prospect of any delays or shortages in basic items such as avocados, tomatoes and limes is a concern. said owner Jenny Bustillos, who runs the restaurant with her daughter, Brittanie Sexton. Luna’s has already seen prices triple due to pandemic-related supply chain challenges and inflation, Bustillos said. A case of lime that used to cost $ 30 per case before the pandemic is now $ 90 and one case of avocado has risen from $ 40 to $ 120, Bustillos said. “Everything [we make] “It contains some kind of fresh vegetables, so this is very worrying for a business like ours,” said Sexton, Luna’s director. “Everyone who works here, we support our families with that. We are not a chain [restaurant]. That’s our livelihood. “
It adds to the instability of the supply chain
It could eventually take several weeks for supply chains to recover from the weekly slowdown at the border, said Matthew Hockenberry, an assistant professor at Fordham University who studies supply chains and logistics. “It’s also so difficult to predict, because there is so much instability in supply at the moment,” he said, noting that China’s latest wave of lockouts and the war in Ukraine are causing even more unrest. “The uncertainty about the offer is so high that adding more straw here to the camel’s back is a dangerous proposition.” Logjam also has the potential to exacerbate existing supply chain issues in the manufacturing industry, said Erik Lundh, chief economist at The Conference Board. After the early stages of the pandemic, when lockdowns in China led to significant shipments delays, it sparked renewed interest from US companies working with suppliers in Mexico, he said. “What will companies think about this?” he said. “What will they think when they see that Mexico, which has emerged as a possible alternative to China, could have such an impact on this US political sphere?” These issues could further exacerbate the inflationary woes already exacerbated by the war in Ukraine and the new Covid wave that hit China, he said. “Combined with the difficulty of crossing the border into Mexico,” he said, “it lays two different kinds of sources of inflationary pressure on top of each other and makes things even more complicated.”
