U.S. fruit and vegetable producers have reason to be concerned about the cost and availability of labor to harvest their crops. For most crops, a harvest delayed by lack of labor means less profit for growers because even a short delay can reduce quality and price. Longer delays may mean that the entire crop is lost if the quality deteriorates to the point that it cannot be marketed. Growers’ competitiveness is affected by wage rates. In 2010, the Federal minimum wage is $7.25 per hour ($8.00 per hour in California), while the minimum wage in Mexico ranges from $4.17 to $4.40 per day, depending on the region.
Any potential immigration reform could have significant impacts on the U.S. fruit and vegetable industry. Over half of hired workers employed in U.S. crop agriculture are believed to be unauthorized immigrants, and experience has shown that most will move on to nonagricultural employment within a decade of beginning to work in the fields. Relatively low wages compared with other U.S. jobs, hard physical labor, frequent harsh weather conditions, and seasonal employment patterns make working on crop farms unappealing to most U.S. citizens and authorized immigrants.
The supply of farmworkers for the U.S. produce industry depends on a constant influx of new, foreign-born labor attracted by wages above those in the workers’ countries of origin, primarily Mexico. Immigration policy helps to determine whether the produce industry’s labor force will be authorized or unauthorized. Any debate about more stringent enforcement of current immigration and labor laws or immigration reform that could reduce the supply of workers or make agricultural labor more expensive is of interest to growers.
Growers’ vulnerability to potential wage increases varies
The most recent data from ERS indicate that labor accounted for 42 percent of the variable production expenses for U.S. fruit and vegetable farms, although labor’s share varied significantly depending on the characteristics of the commodity and whether the harvest was mechanized. Factors that affect grower profitability, including higher wages, will put pressure on growers to reduce labor costs, their single largest variable production expense. The response of fruit and vegetable growers to wage increases will vary depending on the commodity, import and export competition, domestic demand, availability of mechanical harvesters, and other factors.
ERS examined seven fruit and vegetable industries to look at how growers deal with labor, with a particular focus on the potential for harvest mechanization: Washington State fresh-market apples, Florida processing oranges, California fresh-market oranges and strawberries, raisins, fresh-market asparagus, and lettuce. These commodities include fresh, fresh-cut (bagged salads), and processed items (raisins and orange juice). Harvesting of all seven commodities is either exclusively done by hand or only partially mechanized. These industries vary in size. The fresh asparagus industry had an average annual farmgate value of $91 million in 2005-07. The lettuce industry is quite large, with an average annual farmgate value of $2 billion in 2005-07.
Washington State apples dominate the U.S. fresh apple market. Growers in Washington generally produce for the fresh market, and processing serves as a secondary market; any apples that do not meet the demands of the fresh market can be diverted to processing. There is limited import competition in the fresh market, but growers face competition from China in the processing market. With declining per capita fresh apple consumption, the U.S. apple industry is increasingly reliant on export markets, with 24 percent of fresh production exported in 2005-07, up 31 percent since 1990-92. While China, the world’s largest apple producer, cannot export fresh apples to the United States due to phytosanitary issues, U.S. growers must compete with China in some export markets. The Washington apple industry is under considerable pressure to reduce costs, but there is no commercial mechanical harvester for apples yet