Future Expectations For Vegetable Growers

What does the coming year hold for vegetable growers? If we had a crystal ball, maybe we could tell you that the labor and immigration situation will be rectified, food safety issues will work themselves out, or that just the right amount of rain will fall upon your fields. (OK, that last  one would be more like a dream.) In any event, we asked some industry folks about what they see happening in the coming months in the major vegetable crops. Here’s what they had to say.

Karen Bonaudi
Assistant Executive Director
Washington State
Potato Commission

This coming year growers will face pressures from rising costs of fuel and labor, but also land leases, as potatoes are rotated. Rising profits for wheat and corn are edging out potatoes as the only money crop for renting ground.

Most potato growers are experiencing spot labor shortages and all have seen an increase in wages due to a tight labor market. The pool of applicants historically available is now being recruited into higher paying industries than food production. This situation is progressively more difficult for food processors and field producers.

Local packer/shippers are having issues competing with other states on packing potatoes because of Washington’s worker-friendly labor laws. They have also had a difficult time finding qualified truck drivers, especially those who can drive off-farm and across the state borders. According to one industry member, there is no longer any room for error in growing potatoes. You have to have a perfect crop in quality and yields in order to keep up with rising labor and energy costs.

For potatoes, food safety issues are arriving in the form of sustainability audits on top of the USDA Good Agricultural Practice (GAP) audits of this season. The industry is working to help standardize audit requirements among retailers and food service in an attempt to make it easier on providers and markets to meet goals.

Reggie Brown
Manager
Florida Tomato
Committee

This year we will continue the demands on all vegetable growers to address the concerns of food safety. Demands will accelerate from customers to provide assurance and audits to demonstrate compliance with ever-increasing expectations for the grower.

The labor/immigration issue will continue to worsen. National elections will encourage posturing without resolution of the issues. Growers need to “fasten their seat belts” on this issue in the upcoming year.

Food safety will continue to gain momentum as a key issue. The industry will continue to struggle with marketplace demands exceeding the science in many areas. The marketplace seems to have lost focus on the reality that produce is safe and is trying to create unreasonable demands that will never eliminate all risk from fresh produce. The message should be refocused on how safe fresh produce actually is, which is the overwhelming norm — not the problems that are the extreme exceptions.

David Fairbourn
Manager of Industry
Communications And Policy
United States Potato Board

Growers will continue to be challenged to maintain and open new marketing opportunities for their potatoes. Domestically, in-home fresh potato consumption continues to decline on a per capita basis, but this is reflective of many items in the fresh produce category.

The potato industry has recently had some good success with increasing demand in foreign markets. Exports were over $1 billion for marketing year 2006-2007. This is good news because 95% of the future growth opportunities are in foreign markets. For 2008, these will increase as new products in frozen, dehydrated, and chipping potatoes are introduced in new and existing markets. The U.S. and Korea signed a Free Trade Agreement which removes the tariff on U.S. frozen potato products and greatly expands access for dehy and fresh; however, the agreement still needs passage by the legislatures in both countries.

Domestically, some exciting developments for the fresh and chipping potato segments are taking shape that will have lasting effects into 2008. New products which aid the cooking of fresh potatoes in microwaves, making them more convenient to prepare, are being introduced. Some fresh shippers are introducing their own versions of convenient microwave steam cooking packages.

Labor and immigration are issues that will not be resolved in the short term. These will continue to be hot button topics in 2008, and likely far into the next administration. A stalemate of opposing ideals pervades the political landscape and these won’t simply go away. Growers and the produce industry will struggle to keep positions filled with qualified farm laborers.

Potato processors are already requiring their producers to comply with their respective GAP certifications in their contracts. The potato industry is working toward adopting its own standards to reflect industry self-governance with food safety.

Ross Siragusa
Chief Executive Officer
California Tomato Growers Association

Water and alternative crops are the big drivers for California processing tomatoes. A major portion of our growing is dependent on federal or state water projects which are impacted by two issues:

– 2007 had below normal precipitation and snow pack, so there is very little carryover for 2008. For the current “water year” we’re below normal for precipitation and the long-term outlook is not encouraging.

– Even if precipitation returns to normal, water allocations will be well below 50%, due to pumping restrictions imposed by a court ruling due to an endangered species lawsuit.

As a consequence, growers are looking to grow less water-intensive crops, such as wheat or safflower, which offer very attractive return potential with lower risk. In areas less impacted by water restrictions, growers are cutting acreage in favor of alfalfa, corn, or silage. Bottom line — we expect a minimum of a 10% reduction in acres and a 10% increase in price.

Our tomatoes are mechanically harvested so while we will be faced with higher labor costs, we should be able to find enough laborers.
Our products are pasteurized during the processing and our growers keep very detailed spray records, so we don’t expect much change in the food safety area.

Joe Nunez
Vegetable/Plant
Pathology Advisor
University of California Cooperative Extension 

California will have new restrictions on the use of fumigants in the air pollution non-attainment areas. This will affect carrot and potato growers in the Southern San Joaquin Valley in their ability to manage weeds, nematodes, and soilborne pathogens. Strawberry growers in the Ventura/Oxnard area will be affected too.

Water issues and environmental regulations will affect total acreage planted. Some lower-value vegetables may see reduced acreage because of the costs of water.

I have never heard of worker shortage for vegetables. It seems to affect tree and vine growers more. The housing market is down, which took a lot of workers from ag during the housing boom. Those workers will likely be coming back to ag.

John Palumbo
Entomologist
University of Arizona

In the area of leafy vegetable production in the desert, growers will continue to develop more cost-efficient ways of producing crops. With growing costs increasing due to higher fuel and fertilizer prices, and availability of water always an issue, growers are focusing on getting the most out of their inputs. In some cases, this involves using GPS precision fertilizer/pesticide application, and planting more acres with drip irrigation, particularly cole crops and celery.

In the desert, produce growers have always taken food safety very seriously, and are focusing more attention to detail than ever before. They have a reputation of producing safe and quality produce and the industry is doing everything possible to maintain that.

In terms of pest management, growers are modifying ways in which they apply pesticides. They are using only clean, potable water from wells in
their spray tanks before mixing with crop protection chemicals and spraying on crops. Unfortunately, this slows down the process and can make it more expensive.

Grower Feedback

We asked some growers to tell us what the major issues will be in the coming year. Their feedback is quite eye-opening.

Tony DiMare
DiMare Company
Florida

Current prices are relatively high right now for round and roma tomatoes due to acreage cutbacks in Mexico and Florida, and disease and Tomato Yellow Leaf Curl Virus pressures in Florida. Grape and cherry tomato prices have fallen recently because of normal seasonal increased volume. The overall round tomato and roma acreage in Florida is expected to be down because of tremendous financial losses in the past couple of years because of overproduction and a rapid increase of production costs — methyl bromide, plastic mulch, fuel, chemicals, fertilizer, labor, land costs, food safety compliances, and added costs combating disease and viruses due to invasive pests.

The labor supply so far has been ample, partly because the time of the year with typically lower yields, and because acreage is down. Immigration enforcement is still a major concern to all growers.

Food safety is becoming more and more costly as customers continue to request third-party audits, and the standards continue to be strengthened. My feeling is we are in an “overkill” mode in the development of new standards. There are too many “gunshot” approaches being demanded from industry, which is putting growers/shippers in a peculiar situation.

I feel, in general, that most of industry is producing as safe a product that has ever been produced in the history of the produce industry. This is evidenced in the comprehensive food safety programs that are in place throughout industry today, which never existed 15 to 20 years ago! Remember, too, the producers are bearing all costs associated with food safety and are unable to pass these costs on to customers because of the competitive nature of our business.

Brent Jackson
Jackson Farming Co.
North Carolina

The biggest concern we have here in North Carolina is going to be weather related for our strawberry, cantaloupe, and watermelon crops this coming spring. We are currently at 22 inches below normal, and in an extreme drought condition. Even though we are OK, for the winter months, our concern is when we start pumping out of our holding ponds, there is not enough ground water reserve to replenish in order to get a crop produced.

Another concern, of course, is the cost of fuel. If we don’t get some relief here, it certainly is going to take its toll as well.

In the area of labor and immigration, we use H-2A labor so we are expecting another increase in the Adverse Wage rate. We just don’t know how much yet. This is really beginning to take its toll on our bottom lines, and there has got to be some type of relief and soon!

On top of this, everyone wants added measures for food safety, from farm to table with traceback and other safety programs in place to protect our food supply, which is really wonderful and needed. But as these issues are being discussed and systems put into place, nobody wants to assist us (the growers) in helping pay for all these added food safety systems.

Chris Pawelski
Pawelski Farms
New York

As an onion grower, what will impact onion production in 2008 may hinge on how the 2007 marketing season finishes. Right now, due to overproduction, onion prices are very depressed. To be brutally frank, planted onion acreage, especially concerning the fall storage crop, needs to be more in line with domestic and export demands. We cannot continue to plant the acreage we have been planting and continue to give our onions away because of overproduction. Another factor will be to what degree Canadian onions continue to be dumped at low prices in the Eastern U.S. seaboard markets.

Labor and immigration, as a whole, is a critical issue. Due to increased border security the immigrant labor pool seems to be shrinking, and since New York is far along the migrant labor stream, we seem to be experiencing a keen reduction in the number of available workers. Added to that is the fact that many parts of the state have faced immigration raids, which has caused significant impacts on our production, especially our harvests. The federal government needs to address this issue. The Congress urgently needs to pass significant and real reforms to the deeply flawed and problematic H-2A program.