ized. 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.
Florida oranges are mostly processed into juice, and California oranges are mostly sold to the fresh market. The Florida industry has been been buffeted by hurricanes, disease, and imports from Brazil, so reducing production costs is critical. There is a mechanical harvester available for Florida growers, which shakes the tree canopy to dislodge the fruit, but less than 7 percent of the processing orange crop is harvested this way. Work is underway to make the harvester more profitable for growers to adopt. California orange growers cannot employ the mechanical harvester used in Florida because it damages the skin of the fruit, rendering it unacceptable for the fresh market. The California orange industry does not face serious import competition during the season for navel oranges, the dominant variety. U.S. fresh orange consumption has declined, which makes the industry more reliant on export markets where China could be a major competitor. This situation could encourage growers to take a closer look at mechanical harvest options.
Raisin production and domestic consumption have declined. The U.S. industry exports almost half of the raisins it produces and faces export competition from Turkey, a low-cost supplier. U.S. raisin growers began adopting mechanical harvesters in large numbers in 2001, following a 56-percent drop in raisin prices in 2000, a tighter labor supply, and the introduction of an improved mechanical harvester. Adoption of new machinery and associated changes in how raisin grapes are produced can be expensive, making it likely that younger and larger growers may mechanize first. The raisin industry has many small producers nearing retirement age. Adopting expensive new harvest technology may not be economically viable for this group.
Strawberries are produced year round in California. Average annual production increased 81 percent from 1990-92 to 2005-07, and per capita consumption rose 75 percent over the same period. California strawberry growers produce for the fresh market and use the proc