Study: High Labor Costs Impacting Produce Growers
Ask anyone in the tree fruit, berry or vegetable industries, they’ll tell you all about the high labor costs associated with their labor-intensive commodities. A recent USDA study looked at those costs and what can be done to help producers with their bottom line.
“There's a general consensus in the U.S. right now that domestic farm workers are getting harder to find," noted USDA economic researcher Skyler Simnett. "As evidence of that the farm wage rate increasing faster than the non-farm wage rate for non-supervisory positions. when supply is not keeping up with demand you end up with a higher equilibrium price which in that case is the wage rate. So we find that growers, particularly in the produce industries, are affected by this. And that's because their products are labor intensive, and also a larger share of their total cost expenditures you think would go to labor."
Simnett said through data from NASS and conversations with growers, producers are looking at making changes, some small, some large, in an effort to help their bottom line.
“Growers basically in the short term they can do a few things to deal with the increasing labor costs. They can have fewer passes through the field for example. Or they can use existing mechanical aids. They can start incorporating those technologies that are available. In the longer term though, the main strategies that our growers have are things like bringing in more guest workers via the H-2A program or other means.
"Decreasing production actually of crops that just aren't showing to be competitive or they're not going to be competitive long term with imports, and using or developing new technology for mechanical harvesters where those aren't currently available improving existing technologies,” Simnett continued.
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