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January 2011, Volume 17, Number 1
Labor: US Fruits and Vegetables
The value of US-produced fruits (excluding nuts) averaged $13 billion a year between 2005 and 2007, and the value of US-produced vegetables averaged $19 billion. Over half of the vegetables, but only a third of the fruits, were consumed fresh.
There have been significant changes in US fresh fruit and vegetable production. Strawberry production more than doubled in the past 15 years, while fresh-market grapefruit production fell by almost half. Similarly, fresh-market asparagus production fell almost a third between 1990-92 and 2005-07, while the production of romaine lettuce more than tripled.
The US imports and exports fresh fruit and vegetables. In the 15 years between 1990-92 and 2005-07, fresh fruit imports more than doubled and fresh vegetable imports rose 163 percent. US exports also increased, but slower: 18 percent for fresh fruit and 36 percent for fresh vegetables. About 30 percent of the fresh fruit (excluding bananas) consumed in the US is imported, as are 20 percent of the fresh vegetables.
Weather is the single most important factor affecting fresh fruit and vegetable trade, but labor and transportation costs also shape trade patterns. Affluence created a demand for fresh fruits and vegetables year-round, and new seeds and better storage enabled producers to supply commodities year round. Some trade reflects weather, as when the US imports table grapes from Chile and Mexico in winter and exports table grapes to Mexico in summer and fall.
Green onions provide an example of how labor costs shifted production from the US to Mexico. In the late 1970s, almost all US green onions were produced in the US; today, almost all are imported from around Mexicali, Mexico. Some processed commodities may be more sensitive to labor costs than fresh commodities. For example, hand-cut frozen broccoli spears are mostly imported, while machine-chopped frozen broccoli is mostly grown in the US.
Rising wages can prompt labor-saving mechanization instead of rising imports. Vegetables are far more mechanized than fruits? about 75 percent of US vegetable and melon tonnage is machine harvested, but less than half of the fruit tonnage. There was significant interest in mechanization in the 1960s and 1970s, when the end of the Bracero program and the rise of unions led to rapid increases in farm wages.
Publicly supported labor-saving mechanization, perhaps best symbolized by the development of the mechanical tomato harvester, waned in the 1980s as federal, state and industry contributions to university-based labor-saving researchers ended, immigration increased, and real farm wages fell. USDA Secretary Bob Bergland, responding to a suit filed by California Rural Legal Assistance against the University of California alleging that federal research funds were used unlawfully to develop the tomato harvester and displace small farmers and farm workers, said "I will not put federal money into any project that reduces the need for farm labor."
Federal funding for mechanical harvesting research increased with the Food, Conservation, and Energy Act of 2008. It included a Specialty Crop Research Initiative (Section 7311) that provided $230 million between FY09-FY12 to support "efforts to improve production efficiency, productivity, and profitability over the long term (including specialty crop policy and marketing) and new innovations and technology, including improved mechanization and technologies that delay or inhibit ripening."
Farm employers faced with rising minimum wages, and knowing that enforcement of immigration laws could push wages higher, began supporting university-based and private-sector mechanization projects, including some of those funded by the Specialty Crop Research Initiative. Commodity groups have also supported the development of mechanical aids that make workers more productive.
The federal minimum wage was $5.15 an hour between September 1, 1997 and July 24, 2007, when it rose to $5.85 an hour, and a year later rose again to $6.55 and to $7.25 in 2009. The federal minimum wage fell by 30 percent in real terms before the 2007 increases. The California minimum wage was also $5.15 an hour on September 1, 1997, and rose to $5.75 in 1998, $6.25 in 2001, $6.75 in 2002, $7.50 in 2007, and $8 in 2008.
The following case studies illustrate potential adjustment scenarios to higher wages.
Apples. Washington produces almost 60 percent of US apples from about 160,000 bearing acres. US consumption of apples has been falling, reflecting the availability of other fruits and rising grower prices of varieties favored by consumers, including Gala and Fuji. The US imports less than five percent of its fresh apples.
China has become world's largest producer and exporter of fresh apples. In recent years, China accounted for a quarter of the world's fresh apple exports, Chile 20 percent, and the US 15 percent (Chinese fresh apples cannot be imported to the US). There are fewer restrictions on processed apple imports, and China is the dominant supplier of some processed apple products in the US, including apple juice.
About half of the labor required to produce apples is for harvesting? 20 percent is for pruning and 20 percent for thinning. Pruning and thinning are generally done during times of the year when there are relatively few other seasonal farm jobs, making labor availability less of an issue. Some growers use mobile platforms on which workers can stand for pruning and thinning, increasing worker productivity.
Most apples are picked by hand, with workers climbing ladders, picking apples into bags worn over their shoulders, and dumping full bags into bins that hold about 1,000 pounds of apples. Some studies suggest that apple pickers spend only 30 percent of their time picking apples? the rest is used to move ladders and carry and dump bags of fruit. However, mobile platforms are not currently used to harvest apples because the weight of the apples could destabilize and tip them.
Two major trends may have opposite effects on the employment of hand workers in the apple industry? dwarf trees and new varieties. Most new apple plantings are dwarf trees trained on trellises that are more amenable to machine harvesting and the use of mechanical aids, which saves labor and allows employers to use a wider range of workers than the young men who dominate the ladder harvest work force. Trellised dwarf trees increase up-front orchard development costs but reduce growing and harvesting costs.
Dwarf trees and trellises save labor, but are mostly being used on the new varieties whose high value encourages hand picking. The production of easy-to-pick red and golden delicious varieties whose harvest would likely be mechanized first is declining, falling from over 80 percent of Washington apple acreage in 1990 to about 40 percent today. Meanwhile, Gala and Fuji varieties increased to almost a third of Washington apple acreage.
New apple varieties have doubled the length of the harvest from about seven to almost 14 weeks. The harvest of Gala apples runs from mid-August to mid-September, and some growers promise harvesters who begin to pick in August at $10 to $11 an hour an opportunity to pick red and golden delicious apples later at piece rate wages that enable them to earn $12 to $14 an hour. In addition, new products, such as fresh-cut apples (apples that are sliced and sold in containers), require more careful picking and more hand labor in packinghouses.
Oranges. California produces mostly fresh-market navel and Valencia oranges (70 percent of production) and Florida produces oranges for processing into juice (95 percent). California's overall orange production is stable, while Florida orange production is shrinking as a result of urbanization, disease, and imports of lower-cost Brazilian orange juice. California Valencia (summer) orange production is falling, but navel (winter) orange production is increasing.
Brazil produces half of the world's orange juice and Florida a third; Brazilian producers must pay about $0.08 a liter to export frozen orange juice concentrate to the US. Per capita consumption of both orange juice and fresh oranges has been falling in the US.
Oranges in both California and Florida are mostly hand harvested by workers who are separated from land owners by growers and contractors. Many Florida land owners rely on farm management companies to farm their fruit, and these companies often turn to contractors to harvest the fruit. Many of these contractors are small, with little capital, and some have been accused of enslaving the workers they employ. Liability in labor cases normally stops with the contractor? it rarely affects the farming company, land owner, or processor who buys the oranges.
For example, the attorneys for Brothers Ramiro and Juan Ramos, labor contractors sentenced to prison in 2002 for involuntary servitude, asked Lykes Brothers why they used contractors to obtain orange pickers rather than hiring workers directly. Lykes said: "We find it is a lot more efficient to use a contractor to provide the labor." At the sentencing of the Ramos brothers, US District Judge Michael Moore said: "others at another level in this system of fruit-picking, at a higher level ... are complicit... They rely on migrant workers, and they create a legal fiction or corporation that insulates them between them and the workers themselves so that they can be relieved of any liability for the hiring of illegal immigrants. And yet they stand to benefit the most."
Most fruits and vegetables that are processed are harvested mechanically. There were efforts to use grower assessments to develop tree shakers to harvest Florida oranges mechanically in the 1970s, but interest waned when several freezes in the 1980s reduced grower revenue while immigration reform increased the supply of labor. Private firms have developed machines that shake oranges from trees, but these machines are most efficient if the trees are small and planted to facilitate mechanical harvesting.
About six percent of Florida oranges were harvested mechanically in 2007/08, and mechanical harvesting was most common in large and relatively new orchards in the southwestern corner of the state. One method of mechanical harvesting uses machines that grasp tree trunks or limbs and shake off the oranges.
A so-called continuous canopy shaker travels down rows, of trees shakes oranges from branches, and catches them for conveyance to bins and transport to processors. These machines cost over $1 million, and are used mostly on large acreages of recently planted orchards. Newly planted oranges anticipate mechanical harvesting, but there are relatively few new plantings; freer trade could make them unprofitable.
Mechanical harvesting cannot be used on late-season Valencia oranges, which account for a quarter of Florida's processing oranges, because these orange trees have both mature fruit and immature fruit that will ripen for the next season. Traditional shakers remove too much of next year's fruit unless abscission chemicals are used to loosen the mature fruit so that it shakes off easier. The EPA is considering a request to approve an abscission chemical that could facilitate mechanization of late-season Valencia oranges.
Appearance is more important for fresh oranges. A San Diego-based firm, Vision Robotics, has received support from California orange growers to pursue mechanization that takes advantage of the falling cost of computing. Vision Robotics developed two machines, a scout to locate the fruit and transmit the information to a harvester to pick it. This two-machine strategy is relatively expensive. Since fresh oranges can remain on trees for up to six weeks, and harvest workers have been readily available, most growers wait for buyers to order their oranges before sending workers out to harvest them, that is, the relative lack of fresh-orange perishability combined with the expense of machines has slowed harvest mechanization.
Raisins. Harvesting raisins has traditionally been the single most labor-intensive activity in US agriculture, requiring 45,000 to 50,000 workers for six to eight weeks. Workers cut bunches of grapes and lay them on paper trays between the rows in the vineyard to dry into raisins. There are about 3,500 growers with about 225,000 acres of raisin-type Thompson seedless grapes around Fresno, California. Most are small; the largest 30 percent of raisin growers produce 70 percent of US raisins.
California raisin production rose from about 200,000 tons a year in the 1970s to a peak of almost 500,000 tons in 2000? production in 2009 was about 330,000 tons. Rising production caused grower prices to plummet between 2000 and 2003 and prompted many growers to remove especially older and less productive vineyards. Raisin production returned to 1999 levels in 2004.
There are labor-saving alternatives for raisin growers, but they require investments that may not pay off for several years. Growers who plant earlier-ripening varieties can cut the canes on which grapes grow and allow grapes to begin drying into raisins while on the vine, the so-called Dried-on-the-Vine method of harvesting. DOV harvesting shifts the demand for labor from the September harvest to the winter pruning season, since canes must be trained to grow in a manner that makes it easy for a wine grape harvesting machine to knock them off the vine. Machines reduce raisin harvesting costs dramatically, but require an upfront investment in early ripening grape varieties, careful pruning, and harvest machinery.
The major factors that slow the mechanization in raisins include: (1) the structure of the industry, including a large number of older growers with small acreages; (2) stable or declining US raisin consumption and rising imports from lower-cost Turkey; and (3) the significant investments required for replanting and machines.
Most raisin grape farms are small, and many are operated by retirees who have 30 to 40 acres of grapes. US consumption of raisins has been declining, in part because American consumers have more fresh and other dried fruit choices. US raisin exports to Britain and Germany are shrinking because of competition from lower-cost Turkish raisins. (The US exports about 40 percent of its raisins and uses federal and state marketing orders to boost exports by reducing their price. US raisin prices are higher than world prices).
The rising minimum wage and worries about whether there would be sufficient harvest workers encouraged many of the younger and larger growers to mechanize. By some estimates, up to half of California's raisin grapes were picked with at least some mechanization in 2010; 35 percent used continuous trays and 15 percent DOV. This mechanization, which has reduced the peak raisin harvest work force to perhaps 25,000, is expected to continue. The speed of mechanization will be affected by wages and the availability of labor as well as the prices growers receive for raisins? low prices can drive some growers out of business and encourage those who remain to seek cost savings.
Strawberries. Strawberries are a success story for growers, with production and prices climbing for the California growers who produce almost 90 percent of US strawberries. California growers hope to sell their berries fresh to consumers, but send them for processing into frozen berries when there are more berries than can be sold fresh. Imports of fresh strawberries are less than 10 percent of US fresh strawberry consumption, but imports of frozen strawberries account for over 60 percent of US frozen strawberry consumption and are rising.
Strawberry fields are picked by hand multiple times, often every three days. An average 1,000 hours of harvest labor is required to harvest a typical acre of strawberries, representing half of the $19,000 cost of production. Pickers are paid hourly wages when yields are low, usually the minimum wage of $8 an hour or a bit more. During peak periods, most receive a piece rate wage, often $1.50 to pick a tray containing 12 pints, plus an hourly wage.
The best strawberry pickers earn $10 to $12 an hour during the peak season, but most earn less. In surveys of farm employers, strawberry workers have the lowest average hourly earnings, an average $9.13 an hour in 2007, lower than the average $9.31 for employees of labor contractors and the $10.27 average of all crop workers. Reasons for low strawberry wages may include the long season, the ability of families to work together and, because the work involves bending rather than climbing trees, more older workers and women, which increases the pool of workers available to harvest berries, holding down wages.
Many southern California strawberry growers use a Harvest Pro mechanical aid to increase worker productivity, a slow-moving conveyor belt onto which pickers can place trays of harvested berries. The belt reduces the need for pickers to carry full trays to the end of the row and reduces the slips and falls that sometimes occur when piece rate workers rush to deliver full trays of berries to waiting trucks so that they can return to picking. There were 250 of the $115,000 mechanical aids in operation in 2008, most in Ventura county, where they were used to harvest at least half of the area's strawberries on relatively flat land. Far fewer Harvest Pros are used in the Salinas area.
Strawberries are fragile and perishable, complicating mechanization. Most mechanization efforts involve a two-machine process, with the first machine scouting the field making a map of the ripe fruit, and a second machine using this information to harvest the fruit. Because of falling computing costs, this two-machine strategy is more economical than a once-over harvester that would lower harvesting costs and yields of useable fruit.
Asparagus. US asparagus production declined by almost 50 percent over the past 15 years despite rising per capita consumption, as imports from Peru and Mexico displaced US production (Peru is the world's leading exporter of asparagus, and its asparagus has entered the US duty free since 1991). Year-round imports moderated the high prices that California growers received for fresh asparagus in the spring months, reducing the state's acreage and the length of the season to about six weeks. About three-fourths of US-consumed fresh asparagus is imported.
Asparagus is a perennial grass that produces shoots when the weather warms. After planting, commercial production usually begins in year three, and peak production in year seven. In spring, asparagus grows very fast, so that spears are often harvested four to five times a week during the six- to 12-week season.
Asparagus is hand harvested and packed in packinghouses, where bunching asparagus spears is often mechanized. Rising imports and uncertain prospects for mechanization suggest that the US asparagus industry will continue to shrink unless a mechanization breakthrough revives the industry.
Lettuce. US lettuce consumption and production is growing, but the major types of lettuce have changed. Head or iceberg lettuce is now just 60 percent of the US crop, reflecting the rise of leaf, romaine, and other lettuces. The US produces lettuce year-round. Very little lettuce is imported or exported.
A handful of large producers dominate the production of lettuce. They produce lettuce year-round, normally operating in Salinas seven months a year, around Yuma, Arizona for four months, and a month in the San Joaquin Valley in spring and fall. Large lettuce producers have a history of innovation. They developed vacuum tubes that cool heads of lettuce quickly and bagged salads, or cut-up lettuce in refrigerated bags.
Most head lettuce is harvested and packed in the field. Crews of about 40 workers walk behind slow-moving conveyor belts, cut heads of lettuce and place them on the belt, where they are conveyed to packers who wrap them with film and pack them into cartons. The first harvest typically accounts for about 75 percent of the yield; most fields are picked twice.
Even though an increasing share of iceberg lettuce is used in bagged salads, most growers are reluctant to use a once-over mechanical harvester because heads of lettuce do not ripen uniformly, so that up to a quarter of the crop could be lost with a harvester. Baby-leaf lettuces, whose share of the market is expanding, are usually harvested by $250,000 machines that use a band saw to cut up to seven tons an hour, replacing 140 hand workers.
Lettuce has been called green gold because of its profitability. Unions were quick to target large and profitable lettuce growers in the 1970s, and most of the large growers had union contracts by the late 1970s that offered entry-level wages that were twice the minimum wage as well as benefits that were rare for seasonal farm workers, including health insurance and pensions. However, rising illegal migration in the 1980s reduced the number of union contracts, and today most lettuce is produced by non-union workers.
There were reports of labor shortages in the Yuma-area lettuce industry in 2005-06. Lettuce growers have traditionally relied on so-called green-card commuters, Mexicans with US immigrant visas who elect to live in Mexico and commute daily to US jobs. Immigrant visas were readily available to Mexicans living in the border-area who had US job offers in the 1960s and 1970s, and many ex-Braceros obtained them.
Retirement is reducing the number of green-card commuters, and younger workers with false documents sometimes join border-area crews. However, stepped-up border-area enforcement, plus low wages in the border area, encourage them to migrate to the interior of the US to avoid the potential of daily Border Patrol inspections.
The shrinking and aging green-card commuter work force, plus the availability of low-cost housing in the Yuma area, has encouraged some lettuce firms to hire H-2A workers, legal guest workers who must be provided with housing while they work seasonally in the US. Some H-2A workers in the Yuma area live in Mexico and commute daily to US jobs, explaining Arizona's large number of H-2A admissions.
Tomatoes. Florida produces about 35 percent of US-grown tomatoes between 2005 and 2007, primarily during the winter months; California produces almost 30 percent, primarily during the summer months. In both states, most tomatoes are mature greens, meaning they are harvested while green and ripened with ethylene gas, a natural ripening agent. Florida growers produce their mature green tomatoes on stakes, while California growers do not.
The food service industry, including fast-food restaurants, prefer mature green tomatoes for slicing. However, many consumers prefer vine-ripe tomatoes, which are picked when red and must be consumed soon after harvest. Almost 40 percent of US tomatoes are imported, mostly from Canada, which exports tomatoes grown in greenhouses, and Mexico, which exports both vine-ripe field tomatoes and greenhouse tomatoes.
Some traditional growers of mature-green tomatoes are switching to specialty varieties such as grape tomatoes, which cost more to produce and harvest. However, because they are sold to consumers through retail stores rather than to restaurants, grower prices tend to be higher.
Mature-green tomatoes are picked by hand into 32- to 35-pound buckets. In Florida, pickers receive $0.40 to $0.45 a bucket, a piece rate that reportedly has not changed significantly for two decades.
The Coalition of Immokalee Workers targeted fast-food firms, organizing and threatening boycotts of Taco Bell, McDonald's, Burger King and Subway unless these restaurant chains agreed to raise the price they paid for Florida mature-green tomatoes by at least a cent a pound and pass the extra penny on to pickers. The fast-food chains agreed between 2005 and 2008 to pay the extra penny a pound, but their extra payments accumulated in trust accounts until Fall 2010, when the Florida Tomato Growers Exchange, the umbrella organization for Florida's 16 major tomato growers, agreed that its member-growers could collect the extra money paid by buyers of tomatoes and pass a penny a pound on to workers.
If the wages of tomato pickers were to rise significantly, there are several possible responses. First, there could be renewed interest in mechanization, especially if plant breeders develop tomato varieties that did not have to be staked and are amenable to once-over harvesting; with such varieties, California growers may be able to mechanize faster than Florida growers.
Second, since most mature-green tomatoes are used in the food-service industry, which pays relatively low prices to growers, higher wages could lead to higher prices and reduced usage of slicing tomatoes in the food-service industry. Third, there could be increased tomato imports from Mexico and other countries, including potential production in Cuba that might displace some Florida production if the trade embargo is lifted.
For more on these issues, see Florida: CIW, Oranges, Sugar. 2010. Rural Migration Issues. Volume 16 Number 2. April. http://migration.ucdavis.edu/rmn/more.php?id=1526_0_3_0 California: FVH Crops, Dairies. 2009. Rural Migration Issues. Volume 15 Number 3. July. http://migration.ucdavis.edu/rmn/more.php?id=1472_0_5_0 AgJOBS, EARA, Mechanization. 2008. Rural Migration News. Volume 14 Number 3. July. http://migration.ucdavis.edu/rmn/more.php?id=1324_0_4_0 Florida: Oranges, Housing; Texas. 2003. Rural Migration News. Volume 9 Number 4. October. http://migration.ucdavis.edu/rmn/more.php?id=775_0_3_0 Calvin, Linda and Philip Martin. 2010. The US Produce Industry and Labor: Facing the Future in a Global Economy. USDA. Economic Research Report No. (ERR-106). November. http://www.ers.usda.gov/Publications/ERR106/ and www.ers.usda.gov/AmberWaves/december10/Features/LaborIntensive.htm Martin, Philip and Linda Calvin. 2010. Immigration Reform: What Does It Mean for Agriculture and Rural America. Applied Economic Perspectives and Policy. Volume 32, Issue 2. Pp. 232-253.