By Isabella Silva, ALC Marcom
A harsh reality of climate and economic twists is unfolding in the heartland of Mexico, where a colorful abundance of strawberries and avocados usually flourish. The country is painted with the struggles of a severe drought, hurricane surprises, and a resilient agricultural community striving to adapt to the shifting circumstances. I had the opportunity to interview Mark Santos, Manager of Santos International and TransKool Solutions, to hear firsthand how the economic climate in Mexico is affecting the year-round supply of produce coming into the United States.
“Mexico as a whole has been struggling with severe drought. Water shortages affected many commodities greatly across the board. The state of Michoacán, where the majority of strawberries and avocados come from, has felt the brunt of this,” stated Santos. “Then comes the irony of Hurricane Otis that went from a Category 1 to a Category 4 hurricane in less than 48 hours.” While the Zamora area, a significant agricultural region, escaped direct impact, other vital areas suffered, leaving a trail of damaged crops and economic uncertainty.
During these climatic challenges, Mexico faces an intriguing economic landscape. Despite the hardships, Santos shares that the peso stands strong against the dollar, maintaining a formidable exchange rate of 17-18 MXN, compared to previous fluctuations of 25 -27 MXN. “A stronger dollar encourages Mexican exports to the United States as Mexican growers strive to recover their investment in dollars. A weaker dollar has had growers questioning whether they should take on additional expenses such as freight and transmit times to get their product to the U.S.” With its predictable payment upon delivery terms, the Mexican market presents a tempting alternative. Adding to the complexities, Santos said, “Mexico is also struggling with labor shortages, forcing the industry to import labor from southern regions to fill the gaps.”
The Pharr International Bridge, a port of entry for the U.S.-Mexico border, reported the lowest crossing number of agricultural loads in the last quarter in comparison to the same time frame in the past five years. Santos gives an example, “we have a customer that would traditionally move about 180 loads of berries in October, and this year moved 110 loads.” However, in the grand scheme of things, every climate has its season, and while challenges persist, there are brighter days ahead. “Mexico continues to see an increase in planted acreage, especially in high-end commodities such as berries and avocados. Geographically, it is still in the best position than any other country to export to the U.S.”
Mark Santos has been a longtime friend with Allen Lund Company and the Lund family. Given the alignment in company culture and shared values with Santos International, the decision to collaborate six years ago was a natural progression. ALC takes pride in the partnership with the Santos family and draws upon their great insight, expertise, and local knowledge in McAllen, Texas, which is essential with Mexico being the United States largest trading partner.
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Isabella Silva graduated from St. Edward’s University in 2022 with a BA in Communication and minors in Psychology and Health Communication. She started working at the Allen Lund Company in July 2022 in the Marketing department.
isabella.silva@allenlund.com
Interviewee: Mark Santos, TransKool Solutions
In 2017, Allen Lund Company and Santos International came together and announced a new company, TransKool Solutions. This joint venture delivers top-tier warehousing solutions, specializing in LTL and FTL services, load consolidations, and Customs brokerage.