In February 2024, the board of directors of Rio Grande Valley Sugar Growers Inc. announced Texas’ last sugar mill would close. That sugar cane harvest and milling season was to be the Santa Rosa mill’s last.
Why? Mexico had starved the area for irrigation water.
“For over 30 years, farmers in South Texas have been battling with Mexico’s failure to comply with the provisions of the 1944 Water Treaty between the U.S. and Mexico that governs water sharing between the two nations on the Colorado River and the Lower Rio Grande,” the board wrote in its Feb. 22, 2024, announcement.
“We regret the impact our closure will have on communities across the Valley, especially those closest to the mill, La Villa, Santa Rosa, and Edcouch,” it added. The board described the mill as supporting up to 100 local sugar cane growers and employing “over 500 full-time and seasonal workers annually.”
There are two months remaining in the current five-year water cycle in the 1944 treaty, and Mexico hasn’t delivered even half of the water it owes. While it will likely send some additional water this cycle, it probably won’t make up the total.
The lack of full water deliveries will hit growers in the area hard, according to experts. But the lack of water will also hit the industries that support agriculture — and the people who work in those industries or supply them.
In one way or another, experts advise to remember the sugar mill.
Short- and Long-Term Impact on Growers
As produce growers in the Rio Grande Valley look to the prospect of a fourth year of water shortages in 2026, Dante Galeazzi, president and CEO of the Texas International Produce Association, says they will have to make some tough decisions soon.
“They’ve got to decide ‘what am I going to plant?’” he says. “We are sitting just barely better than we were last year at the same time. Not a whole lot better; we still don’t have the water we need to put in a full crop.”
The more distant future is more concerning, however.
“The longer term is perhaps an even more bleak picture for our farmers, unfortunately,” Galeazzi says. He points to the lessons of COVID when it came to big disruptions on supply chains and how markets don’t just magically rematerialize when the stressor goes away.
“If our industry is on average producing 30% less, that means someone else’s region picked up 30% more business. So, when we do get water — and we will have a hurricane and we will get water down here — we will have to fight tooth and nail to get any additional business we can. That really, in my opinion, is the big concern.”
But with growers being water-stressed for so long, that usually also means being profit-stressed.
“Folks down here aren’t all going to have the money to go out and reestablish market share, so that means they’re going to have an uphill battle trying to reclaim that space in the marketplace,” he says.
Impacting the Ecosystem of Agricultural Production
That dynamic applies to more than just growers, however.
“Everyone that goes into the ecosystem of agricultural production are all impacted by this,” Galeazzi says. This can be anyone from seed and chemical companies to the companies that make the boxes, pallets, and packaging for produce. He gave the example of trucking companies: “If they don’t have people to truck for, they’re out of business.”
Similarly, he highlighted the massive infrastructure that goes into making the H-2A program function smoothly — workman’s comp, staffing agencies, buses, housing — as an example of what can be lost.
Lucas Gregory, associate director and chief science officer of the Texas Water Resources Institute, explains the interconnected dynamic in the context of the sugar mill.
“If you have an irrigated operation, like a citrus grove or sugar cane, that has to have water, and if that water is not there, that’s it,” he says. “That’s what happened to sugar cane industry. There was not enough volume that could be guaranteed to keep the mill viable. So, the mill closed, and now with no mill, no sugar cane.”
A recent review by Texas A&M AgriLife Extension Service attempted to quantify what the impact of the lack of water deliveries from Mexico on citrus and vegetables in the area. The review estimates the region would lose $358.6 million annually and 6,079 total jobs lacking irrigation water.
“It’s a domino effect that’s felt within the community,” Galeazzi says. “In the four counties that make up the [Rio Grande Valley], something like 56% of the population lives outside municipal limits. That’s a lot of people who are going to be tied into agriculture in the rural community. Those are the guys who are going to get hit on top of the farmers.”
Impact on Irrigation Districts and Beyond
The effect of low water deliveries from Mexico is also real for irrigation districts.
Sonny Hinojosa, current water advocate and former general manager at the Hidalgo County Irrigation District No. 2 in San Juan, Texas, explains that irrigation districts in the state have two sources of revenue: the water delivery charge and a flat rate assessment. But both come down to delivering water.
“So, if we don’t have the water, we’re not generating revenue, and you have to start laying people off, and we don’t have money for improvements or maintenance,” he says.
That is the situation playing out in Delta Lake Irrigation District in Edcouch, Texas.
“That’s a big majority of my revenue to keep the doors open here and to keep my employees working and buying equipment,” says Troy Allen, the district’s general manager. “We normally rely on selling at least 80,000 to 120,000 acre feet of water annually to stay alive. And last year was a very, very tough year for us; we sold just a little under 30,000 acre feet worth of water.”
When speaking to The Packer in mid-August, he said the district has only sold 12,000 acre feet this year.
“We’ve really had to tighten our belts to survive,” he adds, explaining that his district usually employs between 51 to 55 people, but now only has 37. He says that, even with how tied into agriculture the region is, many people don’t realize “if we don’t survive, then the farming industry doesn’t survive.”
Hinojosa similarly described irrigation districts as little-known but essential entities in the Texas political landscape.
“We fall between the cracks. Municipalities get all the attention because of the population,” he says.
But negative impacts to irrigation districts are not just a farming issue; they also serve municipalities. Allen says his district serves a few small municipalities, though often at a loss. Galeazzi describes the whole network that depends on water from Mexico as likely to face adjacent economic impacts.
“If the irrigation company has no water, those guys are out of jobs. That infrastructure doesn’t get reinvestment, doesn’t get updated or modernized, further dilapidates, creates further inefficiencies,” he says. “That’s that adjacent community, that adjacent economic downturn, that’s happening as a result of this water scarcity the longer that it goes on in our region.”
Your next reads:
