Farmers Blame Mexico for the Closure of a Sugar Mill. But Is the Crop Right for Drought-Ridden Texas?

Historians believe that Spanish missionaries built the first sugar mill in Texas in the 1780s at Mission San José y San Miguel de Aguayo, in present-day San Antonio. Four decades later, Stephen F. Austin’s colonists planted cane in southeast Texas, and over the course of the nineteenth century, sugar grew into one of the state’s most lucrative exports. The sprawling cane plantations along the Brazos River—worked by thousands of slaves toiling in pestilential conditions—became known as the Sugar Bowl of Texas. 

After mosaic disease decimated the state’s sugar crop in the 1920s, cane production was largely abandoned for nearly half a century. But the 1962 U.S. economic embargo against Cuba, which restricted sugar imports, helped resurrect the industry. In 1970, a cooperative of one hundred South Texas farmers raised funds to build a $28 million sugar mill in the small town of Santa Rosa, in rural Hidalgo County, about fifteen miles north of the border. The Rio Grande Valley Sugar Growers mill became one of the state’s top producers, processing around 160,000 tons of raw sugar and 60,000 tons of blackstrap molasses each year. The plant survived droughts, fluctuating crop prices, and the growing popularity of high-fructose corn syrup, factors that have forced every other Texas sugar mill to close its doors. 

But in February the co-op announced that it was shutting down—likely bringing an end to the 250-year history of sugar cultivation in Texas. The problem? Irrigation. Cane is one of the thirstiest crops in South Texas, requiring around 400 gallons of water per pound of raw cane, compared to 130 gallons for wheat and 240 gallons for soybeans. Growers get their water from the Amistad and Falcon Reservoirs on the Rio Grande, which are primarily fed by rain that falls in the Mexican state of Chihuahua. A 1944 treaty that governs access to the river obligates Mexico to give the U.S. one-third of that water—no less than 1.75 million acre-feet—every five years. We’re in year four of the current cycle, but Mexico has delivered only about one year’s worth of water. 

Texas agriculture commissioner Sid Miller told me the U.S. has been “asking Mexico nicely for twenty or twenty-five years, and it just hasn’t worked. We’ve got to get their attention somehow, with some kind of sanctions. They’re gonna have to feel the pain.” 

Technically, Mexico isn’t in violation of the treaty—it could still deliver the balance of the water by October 2025, when the cycle ends—but that will be too late for Texas sugar growers. “If you think of those two reservoirs as a bank, Mexico has an account with us, and they are very far behind,” said Tudor Uhlhorn, chairman of the Rio Grande Valley Sugar Growers co-op. “Mexico has basically figured out how to game the system. They delay, delay, delay.” 

I recently traveled to Santa Rosa to meet Sean Brashear, the co-op’s CEO and president since 2003. The laconic Texas A&M graduate, who grew up nearby in Raymondville, showed me a cavernous 100,000-square-foot warehouse, nearly the size of two football fields, that once stored towering mounds of raw sugar. It was now empty, but a sickly-sweet smell lingered in the air. “Without water, we do not exist,” Brashear told me. For years, South Texas has suffered one drought after another. Then, in August 2022 a tropical storm designated Invest 98L dropped around a foot of rainfall in Mexico. 

“All of our farmers were really excited,” Brashear recalled. “But Mexico kept 100 percent of the water. They didn’t release anything.” (A spokesperson for the International Boundary and Water Commission, which is charged with implementing the treaty, said Mexico made its usual releases during the storm but did not deliver additional water, as the U.S. had requested.) The 2023 sugarcane crop was one of the worst on record. With droughts becoming more frequent and Mexico’s compliance with the treaty in question, the co-op was forced to decide whether to shut down or keep struggling for another year. On Brashear’s advice, the board made the difficult decision to seek liquidation. 

The closure was especially tough for Sam Sparks III, a co-owner of Mercedes-based SRS Farms, which operates 10,000 acres of cropland in South Texas—around 2,500 of which are planted with sugar cane. Sparks, a ruddy-faced former college baseball player, is a third-generation cane farmer; his grandfather helped found the co-op. “I’ve been farming for 22 years, and this is the worst I’ve seen,” Sparks told me while giving me a tour of the area in his Ford Super Duty pickup. Steering with his knee, he pointed out a large dirt field by the side of the road that was littered with dead sugarcane stalks. When the decision was made to close the mill, farmers were forced to plow out their cane plantings in preparation for transitioning to a less water-intensive crop. 

Sparks also noted fields of corn (which requires about 150 gallons of water per pound) that hadn’t received sufficient water because of the shortage. “Everything that’s been planted has missed at least one irrigation,” he said, “so we’re going to see shortfalls in production.” Cane was the first casualty of the irrigation crisis in South Texas, but farmers told me it won’t be the last. Grapefruit and oranges, two more staples of Valley agriculture, are also highly dependent on irrigation. If the water shortage continues, growers may begin switching to less water-intensive crops such as green sorghum and sesame. It will be a costly transition. Insurance companies charge higher premiums for non-irrigated crops because of their dependence on rainfall, which varies from year to year. “I don’t know if that will actually put someone out of business, but it’s definitely gonna bring on some severe financial times for some producers,” Sparks said.

Not everyone will mourn the death of the state’s sugar industry. The federal government indirectly—and heavily—subsidizes the crop through an elaborate system of import quotas and price supports that the conservative American Enterprise Institute once described as “Stalinist-style supply control.” The institute estimates that taxpayers pay as much as $4 billion a year in higher sugar prices to support fewer than 4,500 farms. The libertarian Cato Institute think tank, meanwhile, has criticized the sugar industry as a “candy-coated cartel” and called on the federal government to end its support for farmers. Especially in a drought-prone state like ours, growing sugarcane may no longer make economic sense.

In Texas, though, the sugar industry enjoys bipartisan political support. Local and state politicians have repeatedly pledged to tackle the South Texas irrigation crisis. Several, including Senator Ted Cruz, have made visits to the Lower Rio Grande Valley to meet with growers, including Sparks. In a statement to Texas Monthly, Republican congresswoman Monica De La Cruz, who represents a South Texas district that includes most of Hidalgo County, blamed the closure of the sugar mill on Mexico’s “failure to abide by the 1944 water treaty with the United States.” She called on Secretary of State Antony Blinken and Secretary of Agriculture Tom Vilsack to “step up and hold Mexico’s feet to the fire.” 

In September, Cruz and Senator John Cornyn proposed several pieces of legislation encouraging the State Department to negotiate with Mexico to fulfill its obligations. None passed, but the state’s congressional delegation hasn’t given up. This week, Cruz and Cornyn plan to introduce another bill on the matter. 

Henry Cuellar, a Laredo-based Democratic congressman, recently used his position on the House Appropriations Committee to double funding for the International Boundary and Water Commission. He also inserted language in the 2024 appropriations bill encouraging the IBWC to “engage with their Mexican counterparts and relevant stakeholders to improve the predictability and reliability of water deliveries.” But Cuellar told me that the U.S. can only push the Mexican government so far. “I’ve had a couple of members say, let’s cut the money we give Mexico to fight drugs and stop immigrants coming in from Guatemala. But you have to look at the big picture. Water is very important, but there are other issues as well.” 

Farmers will likely have to wait on relief for at least another planting season. IBWC public affairs chief Frank Fisher said that while the commission shares the sugarcane growers’ concerns, its hands are tied because Mexico isn’t currently in violation of the treaty. “We have asked Mexico many, many times, and they have told us that they intend to meet their treaty obligations to deliver water,” Fisher said. “However, they have not shared their plan with us on how they’re going to do that.” According to the treaty, Mexico can only avoid delivering the water next year by declaring extraordinary drought conditions or by citing a serious accident in their irrigation machinery. “If October 2025 comes around and they haven’t delivered the water, then there are diplomatic ways we can work with them,” Fisher said. “We’re under the State Department, and they will use whatever leverage they can.” (The Texas sugar growers believe the treaty should be reinterpreted. Rather than delivering 1.75 million acre-feet of water over the course of five years, many told me, Mexico should have to supply 350,000 acre-feet per year.) 

But by 2025, the Texas sugar industry will be dead. Most of the mill’s approximately 575 workers—225 salaried employees, plus hundreds more seasonal laborers—have already received layoff notices; the few remaining workers were cleaning up equipment in preparation for an auction when I visited. Sugar mills in Florida, Louisiana, Guatemala, and even Mexico have expressed interest in buying some of the disused machinery. 

Although the mill closed months ago, Brashear still speaks of its operations in the present tense. Like many of the sugar growers, he’s lived in South Texas for most of his life, and he’s taking the closure personally. I asked whether there was any prospect of sugar production returning to Texas. He shook his head sadly. “All the sugarcane has already been plowed out. Once you do that, there’s no seed cane. We have the infrastructure here for other industries. But to revive the sugar industry itself? I don’t see it happening.”