Many Oregon fruit and vegetable producers have had a hard time finding sufficient labor in recent years, and have seen costs increase significantly. A recent USDA-ERS publication on the labor challenges facing specialty crop growers includes some data and conclusions that are highly relevant to Oregon farms and are worth a look. The authors, economists Linda Calvin, Skyler Simnitt and Philip Martin, explore trends in labor costs and import competition, and outline some strategies being employed by the specialty crop industry in response.
The wage data cited in the article show that agricultural wages have risen more than 3 times faster than non-agricultural wages from 2001 to 2019 (16% vs. 5% after being adjusted for inflation). Minimum wages have been increasing in many states, and Oregon has the 5th highest minimum wage in the country. Furthermore, the phase-in of recent agricultural overtime legislation (i.e., Oregon House Bill 4002) will likely increase the labor costs of Oregon farmers even more.
The solutions cited in the USDA-ERS article include investing more in automation, relying more on H2A labor, substituting away from labor-intensive crops, and for many large produce companies, expanding their own production operations into Mexico or other Latin American countries. These strategies are generally more accessible to larger, well-capitalized firms, and contribute to upward pressure on the average size of commercial farms. The H2A program, for example, is supplying an increasing share of farm labor, but can be difficult to navigate and requires the employer to find qualified workers in their home countries and supply housing once they arrive.
Perhaps the most striking piece of information from this USDA-ERS report is the degree to which imports have increased in the fruit and vegetable category in recent years. Table 1 from the report (included above) shows that while domestic production of fruits and vegetables has been stagnant or declined from 2000 – 2019, imports have increased 129% and 155% for fresh fruit and vegetables respectively. The specialty crops with the largest increases in imports seem to be those grown by large U.S. produce companies that manage their own production operations in Mexico. These include lettuce, berries, and tomatoes, and others.
Focusing on significant Oregon crops, we see that imports as a share of domestic availability has increased significantly since 2000 for blueberries as well as snap beans, broccoli, and cauliflower (Table 2). The share of the domestic snap bean market that is imported has grown 282% since 2000, and this figure for broccoli and cauliflower is 203% and 437%, respectively. Some of the increases reflect fresh-market product imported from warmer climates during Oregon’s off season, likely putting pressure on Oregon’s processed veg producers. Crops that can be stored (e.g. apples, pears) have seen little change in imported product market share.
There is no doubt that labor cost and availability will continue to be a challenge for Oregon specialty crop growers. There will continue to be pressure on Oregon farms to rely more heavily on labor saving technology and imported labor through the H2A program, either directly or through farm labor contractors. Of course, these solutions are not perfect and can be difficult for smaller operations to manage effectively.