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Los Lunas, N.M. • The sweet aroma of roasted peppers is wafting throughout New Mexico, signaling that fall is around the corner and the green chile harvest is in full swing.
The annual ritual has everyone from Gov. Susana Martinez to farmers, chefs and hot pepper aficionados professing their love for all things green chile. They're quick to argue that the quality of New Mexico's signature crop is unmatched.
The seasonal attention highlights a growing demand for the New Mexico-grown hot peppers, even as the number of acres planted and harvested each year has been shrinking.
Labor costs, international competition and concerns over long-term water supplies in a region that's no stranger to drought have worked against chile producers in the state.
"It's really difficult for our farmers to compete cost-wise" and that reality poses a threat to the state's commercial chile industry, said Jaye Hawkins, executive director of the New Mexico Chile Association.
"If we can't compete, eventually, we're going to lose it despite the demand," she said.
It has been years since salsa dethroned ketchup as the nation's favorite condiment, and the use of peppers in the U.S. has been on an upward trajectory, now topping 2.3 billion pounds annually. New Mexico has a share of that market, supplying both fresh and dried chilies to restaurants and major spice companies, but domestic supply isn't keeping up with demand.
In the grip of a drought, most New Mexico farmers have been forced to rely on well water to irrigate their crops as flows in the Rio Grande have receded to record lows. With more pumping in the Hatch and Mesilla valleys, some farmers have seen their aquifers drop and the water grow more and more salty.
Stephanie Walker, a vegetable specialist at New Mexico State University, said chile plants can be sensitive to the salt so crop growth and yield can be affected.
Still, experts say the shrinking of the industry cannot be blamed solely on drought.
Hawkins pointed to worker shortages, cheaper labor in Mexico and less restrictive environmental regulations in other countries as prohibitive factors.
"All these things add up for the growers, and it creates an environment where we have to charge more for our product," she said.
Federal agriculture statistics showed New Mexico's chile acreage dropped last year to a four-decade low. About 8,600 acres were harvested that year. During the industry's height in the early 1990s, the harvest topped 34,000 acres.
The industry typically infuses around $400 million into the state's economy and employs thousands of workers. This year's harvest is now more than half complete, but it will take time for farmers and the industry to calculate yield and economic impact.
Most of the farms in New Mexico that grow chile whether commercially for big processing plants or for local farmers markets are small by national standards. Hawkins said one farmer taking 80 acres out of production for drought or other reasons can have a ripple effect.
"It wouldn't take very long to whittle it away," Hawkins said of New Mexico's remaining chile acres.
"I don't think we're ever going to see a day when there is no chile grown in New Mexico, but I think we could definitely see the day when there's not any chile grown commercially in New Mexico," she said.
State agricultural officials are working with the industry to reverse the trend through marketing and certification programs.
At New Mexico State University, Walker and other researchers have been busy trying to improve upon the flavor and pigments of popular varieties. They're also trying to figure out how to make a more robust green chile pepper that can withstand being knocked around by a mechanical picker.
"Chile has been part of New Mexico's identity for hundreds of years," Walker said. "It's part of the art. It's part of the culture. They're practically part of our soul here in New Mexico. It would be a great tragedy if we lost the chile industry here."