Report: Employment and Rising Costs Magnified in the Apple Orchard
October 9, 2023 The top two issues facing U.S. fruit growers continue to be labor and inflation. USApple, the leading voice of America’s apple growers, addresses each topic in its Industry Outlook 2023 report.
Some of its more notable remarks include:
Labor
From 2017 to 2022, average annual crop production employment fell by 1.4%. In apple orchards it declined by 22%.
In 2013 there were 116,406 certified H-2A positions in the U.S. ag sector. In 2022 that figure jumped to 371,619 — a 219% increase.
Over the last five years, the minimum compensation rate for H-2A labor has increased by 33% to $16.17 per hour. For the top seven apple-producing states, that average is $17.19 per hour.
In 2023 the top three rates in the U.S. were in apple producing states: Oregon and Washington at $17.97 per hour and California at $18.65 per hour. Another apple-producing state, Michigan, this year tied for the largest year over-year increase at $1.97 — a nearly 13% increase over last year’s mandated minimum labor rates.
Says USApple: “These trends are particularly challenging for the tree fruit industry, which cannot utilize automation in the same way as many other crops. Apple harvesting and much of the packing are done by hand. By some estimates, labor accounts for between 60% to 70% of variable costs for apple growers.”
Inflation
The cost to grow apples has risen by almost 31% over the last year. The prices for fertilizers and chemicals, the second largest category of variable costs for U.S. apple growers, have increased, as have costs for fuel, vehicles, and other inputs to production.
Meanwhile, the price that growers are receiving for apples has not increased. From 2013-2017 the five-year average farm-gate price for all apples was $0.31 per pound. From 2018-2022 that price had dropped 2 cents to $0.29 per pound.
At the same time, from June 2022 to June 2023 the average price that urban consumers paid for fresh apples in the U.S. increased by 4.5%. Over the same period, food in general increased by 5.7% and fresh fruit increased by 0.3% — making apples seem either more or less affordable relative to substitute goods.
With increasing expenses and stagnant revenues, the U.S. apple industry has had to get more efficient. From 2008-2022, the number of apple-bearing acres in the U.S. fell by around 17%. At the same time, production increased by roughly 2%.
Says USApple: “While there may be some relatively low-cost technologies and techniques to modestly increase yield, it is likely that most of these gains are due to significant reinvestments to develop higher- density orchards.”
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