Successful Temecula Winegrape Harvest Wrap-Up

Temecula Winegrape Harvest to Become More Mechanized

By Patrick Cavanaugh, Farm News Director

Winegrape harvest is going well in the Temecula area of Riverside County, east of San Diego. Ben Drake, president of Drake Enterprises, Inc., a vineyard and avocado grove management company there, summarized this year’s winegrape harvest. “We’re doing real well,” said Drake, who is also a grower board member of the California Department of Food and Agriculture (CDFA).

“We had some real hot weather in middle of June, which reduced some of our yields. We got through that warm weather. Vines recovered and some of the fruit recovered. We’re seeing a slight reduction in yield—somewhere between 10 and 20 percent overall—because of that hot spell.”

Ben Drake, president of Drake Enterprises, Inc. and grower board member of the California Department of Food and Agriculture (CDFA).

Harvest began toward the end of July and is now complete, Drake’s winegrape harvest is all hand done, not yet by machine. Drake said only one winery in the Temecula area has a machine.

Hand labor will change soon, according to Drake, because the new overtime bill mandates that farmworkers will receive overtime pay after working a threshold of 8 hours instead of 10. Drake is looking at machines that will dramatically decrease the hours of his workers—a consequence the state’s agriculture industry warned the Assembly about before they passed AB-1066.

“Overall,” Drake said, “it has been a long season. I grow about 35 to 36 different winegrape varieties, which allows me to pick some earlier and some later. That’s just the way they mature. It allows us to have plenty of time to get everything harvested.”

Drake Enterprises, Inc. the premier vineyard and avocado grove Management Company located in Temecula, California. Drake Enterprises, Inc. provides a full range of vineyard and avocado related activities to its clients. These include site selection, soils and water evaluation, variety, rootstock and scion selection, vineyard and avocado grove layout and development, vineyard and avocado grove management, harvest, consulting, avocado marketing strategy and grape brokerage.

California Ag Today2016-10-26T20:41:03-07:00October 20th, 2016|

California Growers Confront Labor Issues

Labor Issues—Costs and Farmworker Shortages—Challenge Growers

By Brian German, Associate Broadcaster

This year, farmers grappled with labor issues such as shortages and increased labor costs. Some growers had more than enough workers available, while others experienced difficulty in meeting their labor needs. Dave Phippen, co-owner of Travaille & Phippen Inc., a vertically integrated company that grows, packs and ships their own almonds, described some of their struggles with labor this year. “We employ a little more than 50 people year-round, but for harvest we ramp up an extra 15-20 people. There was a squeeze on the availability of the labor and a challenge with what we thought was an acceptable rate of pay,” said Phippen.

As minimum wage increases incrementally every year, growers will struggle to keep up with the higher wages. “There was a new reality in the typical forklift driver, people working in receiving, people sampling,” Phippen elaborated. “We’re paying a little bit more for all of those tasks this year, and because there were more employment [opportunities], it was harder to find people who were available and willing to work.” Phippen also noted that employees “were requiring a greater compensation rate than last year for the same job.”

Travaille & Phippen’s operation has had to reevaluate employee compensation. Phippen explained the principle that as minimum wage increases, compensation rates compress, such that a person who was earning $15 used to be $5 above minimum wage, but is now is only $4 above minimum wage,” Phippen said.

The current federal minimum wage, established in 2009, is $7.25 per hour, up from $5.85 just two years prior. Of the top 10 agricultural producing states in the country, only 4 have minimum wage rates higher than the federal level. California and Massachusetts have the highest minimum wage levels of any other states.

Travaille & Phippen was already compensating a great deal of their labor force above minimum wage; however, to stay competitive and retain their workers, they increased their compensation rates, which caused a ripple effect throughout the supply chain. As their labor costs increased, they had to charge growers more for processing. “It had a big impact on them,” said Phippen, “particularly because those growers are receiving less revenue for their crop this year than they did last year. It was quite a squeeze for our growers and we were caught in the middle of that squeeze,” Phippen explained.

Labor issues have also been a significant concern for Mark Van Klaveren, a diversified farmer in Madera who grows almonds, watermelons and Thompson seedless grapes. Van Klaveren noted that timing plays a big role in their labor situation. “Since we tend to pick our Thompson seedless late, when there is a lot of sugar, we were able to get plenty of labor because most of the other vineyards were finished. Their farmworkers were looking for someplace to work.”

Van Klaveren reported that labor proved more challenging for their other crops. “I have a steady crew for watermelons, although with the new laws coming into effect, we are going to have to make some changes and mechanize a lot more of that harvest,” Van Klaveren noted.

Labor costs will become further complicated in the years ahead as overtime limitations established in AB 1066 phase in, beginning in 2019, with all agricultural operations expected to be in compliance by 2025. The combination of increased wages and the limitation of hours will change the way many farms operate. Some growers will increase mechanization. Others growers of labor-intensive crops may replace their crops with commodities that require fewer hours to harvest.

Van Klavern noted, “The only options we have are to mechanize or get out—one of the two. We can’t afford to produce at the same prices we’re getting right now with much higher labor costs. Some machinery out there can do what we need to do and we will look real hard to get some of that in our operation,” said Van Klavern.

An economic analysis conducted by the Highland Economics firm, shows AB 1066 having significant consequences for California agriculture. The study found the policy would reduce farm production as well as farmworker income, and the new time constraints on farmworkers would negatively impact California’s overall economy.

Van Klaveren is skeptical the new legislation will create any positive outcomes. “Workers want to put in the hours. They want to work. If we’ve got to pay them higher wages to start with, and then overtime on top of that after eight hours? There are certain jobs that won’t sustain the higher wages,” Van Klavern said.

In addition to increased costs for employers, increased minimum wage negatively affects workers who are trying to get their foot in the door of a farming operation. When the government raises the entry-level wage so high that people really have to produce a lot per hour, Van Klavern clarified, inexperienced applicants will suffer. “If you cannot produce a volume of work that is worth $15 an hour or more, you cannot work because nobody is going to hire you to lose money,” noted Van Klaveren.

Collectively, farmers are looking at overall labor cost increases between 5 and 15% over the next few years, depending on the crop. Van Klavern expressed a widely-held view that continued government intervention, particularly in the area of wages, is making farming in California unnecessarily difficult. “The whole issue of employment is a private agreement between an employee and employer, as in, ‘I will work for you for so much an hour and try to produce to your expectations.’ In other words, if somebody is willing to work for $8 an hour, why not let them work for $8 an hour? If it is fine with them and fine with the employer, then why not?” said Van Klavern.

The costs of labor and limitations on farmworker hours, combined with the costs of water and increasing environmental regulations, may prove insurmountable for California agriculture. “The economics is all simple, but the government steps in and complicates everything. I guess that leaves it to us to have to figure out how to swerve between all the regulations and stay in business,” noted Van Klavern.

California Ag Today2016-10-07T10:51:51-07:00October 7th, 2016|

Ag Leaders Discuss AB 1066 Consequences

Ag Leaders on AB 1066 Consequences

By Patrick Cavanaugh, Farm News Director and Brian German, Associate Broadcaster

California ag leaders hoped that Governor Brown would see how the AB 1066 overtime bill would actually hurt farmworkers and veto it. Now that the Governor has signed it, the following ag leaders weigh in on AB 1066 consequences: Norm Groot, executive director of the Monterey County Farm Bureau; Bryan Van Groningen, field manager for Van Groningen & Sons Farms; and Anthony Raimondo, a Fresno-based attorney who has been representing farmers and farm labor contractors for over 15 years, among them.

Norm Groot

Norm Groot anticipated, “The end result of AB 1066 is a big move to mechanized harvesting, which probably means a change in some of the crops that we’re growing here simply because currently we can’t harvest lettuce or strawberries or some of the other vegetable crops by mechanized means. Lawmakers are forcing the hand of the growers to move into crops that are less labor intensive and thus, save the [labor] cost,” said Groot.

Groot noted the inaccurate AB 1066 assumption—that an increase in overtime hours and pay will result from its passage. “We will probably see their hours cut back to the eight hours a day and forty hours per week,” he explained, as stipulated in the law. “Growers will adjust their planning schedules to the amount of laborers that they think they have available for harvest. It’s not an automatic given that we’re going to see all these paychecks increase, simply because we’re putting overtime at more than eight hours a day or after forty hours a week,” Groot said.

Groot added that farmworkers are not in favor of losing 33% of their income at this point. “I think overall, the unions have been supportive of this particular change, but the unions do not represent the majority of the laborers or field workers at this point,” he said.

“I think if you were to ask the average field worker whether he wants to work ten hours a day and sixty hours a week, he would probably say yes. Field workers want that income. They know they work in a seasonal business; they have to earn their income when they can,” he explained.

Bryan Van Groningen

Bryan Van Groningen

“Our farmworkers, our employees, love to put in the extra hours because this is the time that they’re making wages. Our company is accustomed to paying overtime if that’s what it requires,” said Van Groningen, “and the majority of our workers are already satisfied with the existing compensation structure.”

But Van Groningen noted the problem lies in what is considered overtime. With a shorter workday, overtime compensation rates will kick in much earlier than in the past, which will end up being a tremendous cost to the employer. “That’s going to cause our farm to mechanize a little bit more to try to get through the harvest more bit quickly because [the cost] is going to become too big of a burden,” he said.

Growers want to help their employees as best they can, but Van Groningen predicts reduced hours may become a necessity. “It’s just smart business. We don’t want to cut hours, but if we’re forced to because our bottom line is starting to become an issue, that’s what we’ll have to seriously consider,” he said.

Anthony Raimondo

Anthony Raimondo

Anthony Raimondo foresaw the effects of AB 1066 could put California at a disadvantage in the global marketplace. “At the very least,” Raimondo said, “employers will be forced to evaluate where they can cut production costs.”

“The increased overtime in some industries is going to drive automation,” said Raimondo. “So you are going to lose jobs because now it’s worth it for people to do the research and development to have more automation, more machine-harvested crops and less labor.”

Raimondo also expects some employers to add more H-2A temporary agricultural guest workers to make sure hours stay low enough to prevent their costs from increasing. “In the end, this is really going to cost farmworkers in terms of their real wages and it creates a massive economic disadvantage for California’s agricultural industry,” he said.

Policies like AB 1066 become increasingly problematic as the global agricultural industry continues to become more competitive. “Increasingly, agriculture has become a global marketplace in which we compete against countries that do not maintain the same labor standards nor the same environmental standards that we maintain, so our agricultural industry continues to remain at an economic disadvantage with the rest of the world,” noted Raimondo.

Featured photo: Norm Groot, Monterey County Farm Bureau executive director

California Ag Today2016-09-14T12:51:49-07:00September 14th, 2016|

Call for Action to Oppose Overtime Bill AB 1066

Overtime Bill AB 1066 Needs Immediate Opposition

By Laurie Greene, Editor

California Assembly Bill (AB) 1066 to change overtime requirements for agricultural workers is returning as a “gut and amend”* measure scheduled for a hearing in the Senate Labor and Industrial Relations Committee on June 29, 2016. Emily Rooney, president of the Agricultural Council of California (Ag Council), is urging the agricultural industry to tell the State Senate TODAY how this bill would hurt farmworker wages.

California already requires agricultural employers to provide overtime pay to farmworkers after they work 10 hours in one day and 60 hours in one week, which recognizes the flexibility that farmers and employees need given the variable nature of farming and seasonal labor. Authored by Assemblywoman Lorena Gonzalez (D-San Diego), AB 1066, phases in a new overtime wage law requiring California farmers to pay agricultural workers overtime after eight hours in one day or 40 hours in one week by the year 2022.

Rooney says AB 1066 adds an unnecessary regulatory burden on the agricultural industry, and, combined with the recently passed $15 minimum wage law, makes it difficult for farmers in the state to remain competitive. “We do need six democrats to vote with us to oppose the bill, which will be a challenge,” said Rooney. “The Senate is left of center, at least compared to the Assembly, but we are working very hard to secure those votes and just hope that the bill doesn’t get back to the Assembly.”

Rooney said the Assembly killed a similar bill earlier this month. “It is very disappointing that the bill has been repackaged and presented to the Senate as a gut and amend bill, AB 1066,” she said. “The new bill was basically reintroduced less than two weeks after we defeated it in the Assembly.”

Rooney stressed the importance that the Senate not approve AB 1066, because should the Senate approve it, the bill would go back to the Assembly because both houses are needed to pass the bill. “And while the earlier bill failed in the Assembly, we are not sure that it would fail again,” she said.

There are Assembly legislators who voted against it before, who are willing to vote against it again, said Rooney, “but the timing of it is really unfortunate. We expect that while the legislators are on summer recess in July, they may have time to build up support for the bill. It’s the end of session, and we have a number of challenges to defeat the bill; but we are hopeful that if the California Senate does not defeat it, the Assembly will,” said Rooney.

Rooney suggested those who oppose AB 1066 go to the post, “Oppose Gut & Amend Legislation to Change Ag Overtime Wage Requirements” on the Ag Council Action Center webpage, “to easily send an opposition letter to their state legislator.

*GUT AND AMEND, according to the California State Legislature Glossary of Legislative Terms describes when amendments to a bill remove the current contents in their entirety and replace them with different provisions.

Featured Photo: Emily Rooney, president Agricultural Council of California

California Ag Today2016-07-05T17:41:30-07:00June 27th, 2016|