Could a produce supply chain issue cause rising prices?  

A massive blockade along the Texas border is expected to cause supply chain issues and lead to higher prices for produce and perishable goods in the coming weeks. The blockade comes as a result of Texas Governor Greg Abbot’s new border security policy.

Under the new measures, commercial trucks coming from Mexico into Texas are required to undergo additional safety inspections. The U.S. Customs and Border Protection (CBP) agency flags Abbot’s action as redundant, stating that:

“It is not necessary to protect the safety and security of Texas communities and is resulting in significant impacts to local supply chains that will impact consumers and businesses nationally”.

Governor Abbot is aggressively fighting to maintain strict border control for trade trucks. This comes as a direct response to President Biden’s recent announcement that the expulsions dictated by the Title 42 will expire at the end of May.

Abott declared that “The Biden Administration’s open-border policies have paved the way for dangerous cartels and deadly drugs to pour into the United States, and this crisis will only be made worse by ending Title 42 expulsions”.

Title 42 was enacted as a migration management tool by former President Donald Trump at the start of the COVID-19 pandemic, mainly denying entry to migrants seeking asylum through the southern U.S. border.

 

The major slowdown caused by the additional inspections is set to impact the produce industry in a dramatic way. In a letter addressed directly to Governor Abbot, Lance Jungmeyer, president of The Fresh Produce Association of the Americas, stated that:

“Delays from DPS inspections mean that up to 80% of perishable fruits and vegetables have been unable to cross daily. This is causing losses of millions of dollars a day for employers and employees who have been idled.”

Jungmeyer added:

“If DPS inspections stopped today, it would take over a week for the supply chain to return to normal. Unfortunately, the loss of inventory, freshness, and sales will never be recovered, and these losses are a direct economic loss to Texas companies, and lost sales to their customers around North America.”

The Texas border blockade has led to severe drops in commercial traffic, up to 60%, notes the Customs and Border Protection agency. The waiting times also peaked at around 300 minutes.

Angered by Governor Abbot’s aggressive and unfair actions, Mexican truck drivers have also blockaded several bridges along the border in protest.

A report issued by the Texas Department of Transportation highlighted that Mexico is Texas’ main trading partner, accounting for 34% of the state’s trade in 2019 and over $104.3 billion in imports during the same year.

Until the normal flow of commercial trucks along the Texas border is resumed, the supply chain for produce and perishable goods will be drastically affected. Produce quality will likely suffer and prices are expected to rise, due to low stocks. 

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