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October 2009, Volume 15, Number 4

California: Sales, Strawberries

California had farm sales of almost $37 billion in 2007, almost double the $19 billion (each) of number two Texas and number three Iowa. Leading commodities in 2007 were milk worth $7.3 billion; grapes worth $3.1 billion; nursery crops worth $3.1 billion; and lettuce and almonds worth $2.1 billion each. These five leading commodities were worth almost $18 billion or half of the state's farm sales.

The five leading farm counties were Fresno, $5.3 billion in farm sales; Tulare, $4.9 billion; Kern, $4.1 billion; Monterey, $3.5 billion; and Merced, $2.3 billion. These five counties had farm sales of $21 billion or almost 60 percent of the state's farm sales.

Farm commodities are divided into two broad categories: crops and livestock. Crop sales of $26 included $10.5 billion worth of fruits and nuts; $8 billion worth of vegetables and melons; and $4 billion worth of greenhouse, nursery, and related crops; while livestock sales are $10.7 billion in 2007 were dominated by milk. The FVH subsector of agriculture had sales of $22 billion, 86 percent of the state's crop sales and 60 percent of the state's farm sales.

Strawberries. Strawberries are a success story. Production almost doubled since the early 1990s but, because of rising consumption, grower prices rose as well, encouraging continued expansion. Strawberry workers did not share in the industry's prosperity? the average hourly earnings of berry workers are lower than for workers employed in other commodities.

The diverging fortunes of the strawberry industry and strawberry workers is surprising because fresh strawberries face little competition from imports. One reason may be the changing composition of the labor force? many new strawberry harvesters are Mixtecs and other indigenous residents from southern Mexican states such as Oaxaca. Other reasons for lower hourly and weekly berry earnings could include the fact that most berry workers are hired directly by growers and receive some benefits, many workers are employed six to eight months, and berry picking allows families to work together.

One of the largest strawberry growers is Reiter Brothers, which operates in several US states and abroad. Reiter issues about 15,000 W-2 statements a year to a peak 7,000 workers and a trough 3,400, for a peak-trough ratio of 2.1, which is the same ratio between peak and trough employment as in the statewide berry industry. Half of Reiter's employees are women.

Most berry pickers are hired directly by berry growers (rather than through contractors). The average hourly earnings of berry workers were 13 percent less than the average for all crop workers, $10.75 compared to $9.50 in 2008; permanent disability claims data also show that berry workers had lower weekly earnings in the week before their injury than workers in any of the other 13 farm labor risk categories (berry workers are one of 14 risk categories).

Many farm workers aim to earn $100 a day while harvesting at piece-rate wages. Berry pickers employed six to seven hours a day typically earn $75 to $90, reflecting 50 to 60 flats of berries at $1.50 each (workers must earn at least the state's minimum wage of $8 an hour). A rule of thumb is that growers hire 1.25 workers for each acre of strawberries, and that pickers average six flats or trays an hour.

Labor represents 35 to 40 percent of variable strawberry production costs in most crop budgets. Strawberries are soft fruit susceptible to damage in handling, and a strawberry field may be picked 40 to 50 times a season. Mechanical aids that increase worker productivity rather than machines that replace labor are likely as wages rise. About 60 percent of Reiter strawberries in southern California are picked with the aid of a slow-moving $115,000 conveyor belt onto which 15 to 20 pickers load full flats of berries.

However, in northern California, early efforts to use conveyor belts were resisted by workers, in part because employers wanted to reduce the piece rate significantly to reflect increased worker productivity. Reiter is experimenting with smaller, five-picker conveyor belts that cost $4,000 that may prove more acceptable.

Reiter aims to be a model farm employer, and supports several private health clinics where its employees and their families can receive health care. Teaming with North Carolina-based HealthStat Inc, which manages the clinics, Reiter paid $2.2 million to set up clinics in Oxnard, Santa Maria, Salinas and Watsonville, slightly more than it was paying Western Growers for health insurance. Reiter employees pay $2 a week for individual coverage and $6 a week for family coverage.

It has been more difficult to provide low-cost housing in the high-cost areas in which it produces strawberries. One reason is that many solo men want to spend as little as possible on housing and food, often as little as $400 a month. However, providing accommodation and food in approved housing with two or three men sharing a room costs at least $20 a day or $600 a month, meaning that grower-provided or public housing must be subsidized to attract migrants from lower-cost but often substandard private housing.

The fumigant methyl bromide is being phased out in strawberries because it destroys the ozone. In summer 2009 there was talk of approving methyl iodide (sold as Midas) as a substitute. Methyl iodide has been approved in every state except California, Washington and New York.

The Environmental Protection Agency approved methyl iodide in 2007 and extended its registration for one year, subject to buffer zones and minimum 48-hour re-entry bars. The state Department of Pesticide Regulation has promised to complete its review by October 2009.

Milk. Farmers are producing too much milk; prices fell from almost $20 per 100 pounds in summer 2008 to $11 in summer 2009. The National Milk Producers Federation is paying farmers to cull their herds, and over 200,000 cows were eliminated from the 9.2 million-US dairy herd.

One reason for rising milk production just when the recession reduced the demand for dairy products is a new method to sort the sperm of dairy bulls so cows produce mostly female calves to be raised into profitable milk producers. Normally, cows have 52 percent male and 48 percent female offspring. However, bull semen can be mixed with a dye that sticks to DNA, allowing semen firms to provide farmers only with semen that has the X chromosome, which produces female offspring. The sorted sperm produces 90 percent female offspring, allowing farmers to expand their herds more efficiently.

Raisins. The 2009 raisin crop may be smaller than 2008's 365,000 ton crop; perhaps 330,000 tons; the price was set at $1,323 a ton. A combination of mechanization and the recession meant no complaints of harvest labor shortages; perhaps half of the 2009 crop was harvested with some form of mechanization; $250,000 continuous tray machines that eliminate 80 percent of harvest labor needs were most commonly used. Many raisin growers are reducing their acreage of Thompson seedless grapes, which ripen later, in favor of Selma Pete, DOVine, and Fiesta varieties that ripen earlier.

Tree Fruit. Most of the largest tree or stone fruit growers are in California. Gerawan Farming had about 6,200 acres of peaches, nectarines, apricots and plums, followed by Wawona Packing, 5,400 acres; Sunwest, 4,500 acres; Fowler Packing, 3,900 acres; and Family Tree Farms, 3,800 acres.

Cotton. California had about 200,000 acres of cotton in 2009, down from over 900,000 acres in 2000. The decline is attributed to falling prices and less water available for the San Joaquin Valley, encouraging farmers to switch to higher value crops such as almonds and vegetables and melons.

William Neuman, "From Science, Plenty of Cows but Little Profit," New York Times, September 29, 2009. Stephanie Hoops, "Company doctor system grows at large firms," Scripps Howard, August 20, 2009. California Agricultural Statistics. 2008. October. http://www.nass.usda.gov/Statistics_by_State/California/Publications/California_Ag_Statistics/Reports/index.asp