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April 2017, Volume 23, Number 2

California Agriculture

How will California farmers adjust to rising labor costs, as exemplified by the state's $15 an hour minimum wage after 2022 and overtime pay after eight hours a day or 40 hours a week? Most farmers expect to continue to specialize in the production of high-value fruit and nut, vegetable and melon, and horticultural specialty crops such as flowers and nursery plants that accounted for two-thirds of the $47 billion in farm sales in 2016.

Farmers will likely use more machines to produce FVH commodities in the future. There is little expectation that higher wages will induce workers in other states to move to California or attract unauthorized Mexicans over a better-policed border. Labor-saving machines are spreading, and rising labor costs are expected to accelerate their diffusion.

Milk is the most valuable commodity produced in California, accounting for almost 20 percent of the state's farm sales. There are about 70 cows per milker in traditional milking systems, so that a 1,000-cow dairy has 14 employees. Voluntary robotic milking systems were introduced in Europe in the 1990s, and involve a cow walking into a box for feed and being milked. The $200,000 per box robots are best suited for dairies with up to 100 cows.

Most California dairies have herringbone or parallel-style milking parlors. However, rotary parlors are best suited to using robots to speed milking, and some of the state's dairies are converting to rotary milking parlors.

Raisins. California had 280,000 acres of raisin grapes in 2000, but only 165,000 acres in 2017, as farmers replace grapes with almonds and pistachios at a cost of $7,500 an acre for replanting. The farm price of raisins was $1,100 a ton in 2016, down from the average $1,500 over the past decade. Turkey in 2016 surpassed California as the world's largest raisin producer.

Peaches. The California Canning Peach Association believes that labor-saving mechanization is necessary to maintain competitiveness. Growers received $490 a ton in 2016, and many are using harvesting machines to shake peaches from trees; over 10 percent of the crop was machine harvested in 2016. California has 18,500 acres of cling peaches that are expected to produce 327,000 tons in 2017.

Strawberries. California had almost 41,000 acres of strawberries in 2013; 39,000 in 2014; 38,000 in 2015; and 36,000 in 2016 and 2017. Rising yields have kept production stable despite shrinking acreage; 196 million trays were shipped in 2016. Berries are the top-revenue generator in the produce section of grocery stores, and strawberries are the most valuable berry.

Some 323 strawberry establishments paid $717 million in wages to an average 26,000 workers in 2015. Strawberries were worth $1.9 billion in 2015, making labor costs 39 percent of their farm value. In 2014, strawberries were worth $2.4 billion and wages paid to by strawberry establishments were $698 million, making wages paid 29 percent of their farm value. Wages paid to workers brought to farms by labor contractors are not included with wages paid by strawberry establishments.

A worker employed full-time at the average weekly wage of $530 would have earned $27,600. However, there are far more than 26,000 workers employed by berry farms each year; if the total workforce was 52,000, the average earnings of berry workers would be $13,800.

An estimated 10 percent of California strawberries are picked by H-2A guest workers. The strawberry industry uses mechanical aids such as conveyor belts that travel in front of workers so they do not have to carry full trays to the ends of rows, and is working on machines to cut the stem or calyx for the 20 percent of the crop used in frozen berries. A so-called Agrobot to harvest strawberries is in development, but it often misses berries in the center of the row.

Bees. Bees pollinate many crops, including almonds and apples. Colony collapse disorder that kills bees, combined with more acres of almonds, has increased the cost of pollination services from $150 per hive per season in 2006 to $190 per hive in 2016. In a typical year before CCD, 10 to 15 percent of commercial bees died each year. In 2015-16, over 40 percent died.

Two-thirds of commercial bees are used to pollinate 850,000 acres of almonds and other nut crops in California. The largest beekeeper is Adee Honey Farms, which has 92,000 hives that each have 40,000 bees. Adee rents hives for $200 each and uses two hives per acre of almonds.