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Sriracha sorrows fade as new farms harvest jalapeños

Caleb Hampton

California Farm Bureau

Over the past several months, a vegetable farmer in the Imperial Valley pulled off an improbable feat that may help solve an urgent supply shortage – at least for those who crave some extra heat in their rice, soup, noodles or stir-fry.

Shoppers who set out to buy a bottle of Huy Fong Foods' Sriracha sauce in recent years likely went home empty-handed. That's because in 2022, after churning out the sauce for decades, the company in Los Angeles County ran out of its key ingredient – red jalapeño – and shut down its processing plant.

For 28 years, Huy Fong sourced all of its peppers from Ventura County farmer Craig Underwood of Underwood Ranches. But in 2017, the partnership collapsed after a payment dispute that led to a jury awarding $23 million to the farmer.

Since then, Huy Fong, while secretive about its suppliers, has reportedly sourced jalapeños from farmers in Mexico and the southwestern U.S., but with mixed results. A couple years ago, the company announced a lack of inventory had left it "unable to produce any of our products."

The "severe shortage" persisted for more than a year, leaving restaurants and hot sauce aficionados in dire straits. Last summer, third-party retailers were selling the iconic green-capped bottles, previously worth about $5, for as much as $150.

Huy Fong blamed its supply issues on drought-related crop disasters across multiple growing seasons, though other hot sauce brands that use jalapeños did not experience the same challenges.

A key reason for Huy Fong's shortage, growers and pepper experts said, was that the company evidently failed to rebuild a supply network with enough farmers. For a pepper processor, "that is just absolutely critical," said Stephanie Walker, co-director of the Chile Pepper Institute at New Mexico State University.

Jalapeños are difficult to grow because of their long growing season – typically about 80 days for transplanted crops. "When they're in the ground longer, they're going to be exposed to more risks," such as pests, diseases and extreme weather, Walker said.

Red jalapeños, which are picked after the pepper turns from green to red – with a growing season of about 120 days – and must then be harvested within a short window, can be especially challenging.

"We learned over 28 years how to grow and harvest jalapeños," Underwood said. At its peak, he grew 2,000 acres of jalapeños for Huy Fong, planting multiple crops each year. The farm even designed its own mechanical harvester and hauled the peppers from the field to Huy Fong's facilities.

"What we did for them was rather complicated," said Underwood, whose company still grows jalapeños and makes its own brand of Sriracha sauce.

Before Huy Fong's inventory dried up, its Sriracha was the top-selling hot sauce in 31 states, according to consumer data from Instacart. Since then, Huy Fong lost market share as competitors and newcomers filled the void. A Huy Fong representative said no one from the company was available to comment.

To get back in business, Huy Fong needed peppers. But "finding really good pepper growers is challenging," Walker said. In addition to pest and weather risks, labor costs caused many U.S. growers to abandon the crop. Where could Huy Fong go?

According to California pepper growers, last summer, a man described variously as "a broker," "a gentleman" and "a guy in Coachella" sounded out farmers to grow large amounts of red jalapeños for an undisclosed processor.

"He was trying to put together a very quick, very large jalapeño program," said Alex Jack of Jack Brothers, Inc., who farms in the Imperial Valley and received a call from the man in July.

When he got the call, the jalapeño seedlings were already growing in a greenhouse in Northern California, Jack said. The broker needed farmers to sign contracts and plant the peppers within a few weeks before they were too late to transplant.

It was an unusual approach. "Unless they have a grower or growers already lined up," Walker said, "I'd consider it very risky to start a large number of transplants. My guess is that they were quite sure that they'd be able to get growers on board."

It was mid-July, and the man wanted to know if Jack could plant 500 acres, using drip irrigation, by Aug. 15.

"They were doing things unconventionally," Jack said, possibly "because they were in a predicament where they had to just get things rolling and hope it all worked out."

The Jack family has farmed in the Imperial Valley for more than a century, and Jack has farmed there since 1989, but he had never grown jalapeños. Planting so many so fast "would be like a new NFL franchise winning the Super Bowl in its first season," Jack said. "It's crazy."

To start with, at the height of the Imperial Valley's sweltering summer, much of his team was away on vacation.

Jack called up his ranch manager and irrigation specialists, and hired more workers through a farm labor contractor. "We brought everyone back and we got it all planted," he said. "It was a Herculean effort."

Setting up the irrigation system in time was only possible, Jack added, with knowledge his family gained through generations of farming. "It's a lot of years of experience from Jack Brothers doing drip irrigation that helped us put this whole program together," he said.

High-value crops such as chili peppers are almost always grown on drip irrigation, Jack said, because the system, while expensive, enables farmers to "fine-tune the growing of the crop" by administering precise amounts of water and fertilizer.

The jalapeños benefited from underground piping for drip irrigation Jack already had on some of his fields. "We did about half the jalapeños on our permanent drip field, and we did half on portable systems," he said. He estimated it took 25 people working full time for a month to plant the crop, finishing in late September.

Then came a massive storm from the Gulf of Mexico, followed by multiple days of triple-digit heat. "I thought we were in trouble, but the peppers came through with flying colors," Jack said.

A fleet of mechanical harvesters, purchased by the client for this year's crop, began harvesting the jalapeños just after Christmas. "Considering everything we went through and how little time we had to plan for it, the crop looks really good," Jack said.

Growing the crop successfully has made him the confidential processor's largest supplier, he said. With harvest wrapping up, Jack is preparing to plant 210 acres of jalapeños for the spring season. They should be ready to harvest in June.

Beyond that, Jack isn't sure what the future holds. He does not have a long-term contract to continue growing peppers.

In November, Huy Fong said it had resumed production, noting in a statement, "We continue to have a limited supply that continues to affect product availability."

In recent weeks, consumers began reporting lower prices for Sriracha and wider availability. Jack said he still doesn't know with certainty where all his red jalapeños are going, though growers familiar with the scale and urgency of the program said it may be no great mystery.

Caleb Hampton is an assistant editor of Ag Alert. He may be contacted at [email protected].

Permission for using this article was granted by the California Farm Bureau Federation.

 

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