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.

almond assessment increaseAs 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.

almond-tree-shaking-harvestingLabor 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.

Unique Wines Earn Packaging Design Awards

California Wines Win Packaging Design Awards for Innovation

By Laurie Greene, Editor 

 

Some interesting smaller California wineries won special awards during the third annual Wines & Vines Packaging Conference last month in Yountville, California, but not for the quality of their wine. It was all about what contained the wine—the packaging.

 

Jim Gordon, editor of Wines & Vines magazine that sponsored the awards, said, “One of the most interesting developments these days is the proliferation of different wine packaging types and designs. We decided to get a handle on that by starting the Wines & Vines Packaging Design Awards a couple of years ago.”

 

Out of 135 vintner and supplier entries from North American wineries, five wine packaging designs convinced a panel of five experts that they have what it takes to sway consumers to stop in the wine aisle to give the product a closer look. Packages were judged on their creativity, visual appeal, design functionality, appropriateness for the price segment and the package’s ability to stand out in a crowded marketplace.

 

Each package entered contained wine, was filled between Aug. 1, 2014, and July 31, 2016, and is currently available or was available to the general public between those dates. Submissions included wine boxes, wine bottles, wine bags or cans.

Wines & Vines 2016 Packaging Design Awards Winners (Source: Wines & Vines)
Wines & Vines 2016 Packaging Design Awards Winners (Source: Wines & Vines)

The winners of the 2016 Wines & Vines Packaging Design Awards are:

Supplier Contest

Most Outstanding Package–Supplier 

Stranger & Stranger’s design of Run Riot Pinot Noir

Run Riot, a Treasury Wine Estates brand created by Stranger & Stranger, an international design firm, is a “critter” brand with a purpose and a story about a wild boar that rampages through the vineyard. The wine label includes a fascinating die-cut and graphic.

Most Innovative Package–Supplier 

Quest Industries’ “masked spray” on a bottle of Reed Wine Cellars’ 2011 Lodi Cabernet Sauvignon

The bottle exterior is spray-coated in a unique process on the upper half in dark red.

 

Winery Contest

People’s Choice Most Innovative Package

One87 Wine & Cocktails’ single-serving plastic wine “glass” and “stem”

Designed by OGW/France, this single-serve container is a PET plastic, BPA-free vessel, 100% recyclable with a smooth glass-like rim and a guaranteed shelf life of 12 or more months.

 

Most Innovative Package–Winery

Rubin Wines’ Q&A brand packaging

A traditional bottle as well as a box wine was recognized for its large graphics. Each bottle of this new brand, known as “Q & A,” included sets of questions and answers that differed from bottle to bottle.

 

People’s Choice Most Outstanding Package

Wooden Bottle Wine Co.’s 2009 Pinot Noir

This wine was actually in a lathe wooden bottle designed and patented by owner Marcos Oliver crafted entirely of wood from the Thai rubber trees, lined with an FDA-approved, non-toxic product that protects the wine from wood and oxygen infusion.


Featured Photo: Wooden Bottle Wine Co.’s 2009 Pinot Noir, courtesy of Wines & Vines magazine.


Resources:

2016 Wines & Vines Packaging Design Awards

5 wine packaging designs win awards in Napa

Wine Packaging Design Awards Expand

Wooden and Plastic Wine Packages Win

Winegrape Rootstock Trials

Winegrape Rootstock Trials for Pest Resistance and Vine Productivity

By Patrick Cavanaugh, Deputy Editor

Larry Bettiga, a viticulture farm advisor with UC Cooperative Extension, Monterey County, is working with county growers on winegrape rootstock trials to increase vine productivity.

“Several things have happened,” noted Bettiga,“we are replanting vineyards on former vineyard lands, where a build-up of soil pests already exists. Farmers used to grow a lot of beans and tomatoes in the Valley, so we’ve had a lot of root-knot nematode populations from past cropping patterns.”

“We’ve recently seen ring nematode populations developing at multiple vineyard sites,” Bettiga continued. “With the loss of more effective fumigants, and then the loss of post-plant-type nematicides, the use of nematode-resistant roots is becoming more critical to the success of replanting these vineyards. We have hopes that Andy Walker, a UC Davis viticulture professor and grape breeder, is going to supply us with some better options than we currently have.”

“We have a site where we are comparing five new rootstocks that were released from UC Davis with a number of our standard rootstocks. We are just starting that work, so obviously we have to look at them for several years to get a good feel for how those stalks will fit in comparison to what we are now using,” he noted.

The Peril of Smoke Taint on Winegrapes

Wildfires Threaten Smoke Taint on Winegrapes

By Charmayne Hefley, Associate Editor

There are at least two dozen major fires burning in the wilderness of California. Many are now contained, while others are only minimally contained. One recent serious fire, known as the “Rocky Fire” in Lake, Yolo, and Colusa counties burned nearly 70,000 acres before firefighters extinguished it last month.

But smoke from that fire may yet cause problems for the wine grape industry in Napa, Sonoma, and Lake counties. James Kennedy, chair of the Department of Viticulture and Enology and director of the Viticulture and Enology Research Center at California State University Fresno, explained the threat of smoke taint on winegrapes. “Anytime you have wildfires near vineyards,” Kennedy said, “there is a concern about how that smoke might become associated with grapes, and as a result, become associated with wine.”

Kennedy said they learned a lot about this problem from the Australian wildfires in 2003 that tainted their wine. Kennedy explained,“grape growers are oftentimes not aware of the extent to which smoke can damage fruit. In a sense, it is a two-edged sword. When wine is made from smoke-tainted grapes, it will have characteristics reminiscent of ‘the morning-after ashtray’ that is quite obnoxious and certainly not desirable. The other side of the sword occurs when smoke compounds interact with the grapevine and grape berries, it is modified by the grapes. Like an iceberg in the ocean, the ice above the water suffers the apparent smoke taint; whereas, the massive chunk underneath the ocean, though not initially as obviously smoke-tainted, reveals obvious taint over time.”

Kennedy said, “Winemakers in Australia realized that while you can treat that initial smoke taint, you don’t resolve the long-term taint problem. We, as an industry, are trying to identify vineyards with smoke taint problems before their fruit is made into wine. By testing grapes in laboratories, we are trying to prevent those wineries from wasting significant investment in converting tainted fruit into tainted wine.”

The Napa Valley Vintners nonprofit trade association reported on its website yesterday, “So far no vineyards or wineries in Napa County have been threatened by any of this season’s wildfires. Most of the time the fires were burning, the smoke blew away from Napa County due to the typically prevailing winds from the southwest. The weekend of August 15/16, we did experience very hot temperatures and a wind shift that caused our air to be hazy and smoky as a result of the many fires burning throughout CA. However, there were no reports of smoke taint affecting Napa Valley wine grapes as a result.”

“Most reports on smoke taint indicate that it exists only after an extended period of close contact with smoke; conditions that have not, to our knowledge, existed within Napa Valley this summer. Furthermore, Napa Valley is known for the highest standards of fine wine production and our winemakers will be paying very close attention to this situation as they harvest grapes for the 2015 vintage.”