Labor costs will rise
A Washington State grower expects to see more use of the federal guest worker program
Growers need to prepare for increased costs as well as lower returns, Yakima, Washington orchardist Dave Allan warned during the Washington State Horticultural Association's convention. Speaking about economic sustainability, Allan said that the abundance of labor in Washington tree fruits is coming to an end and he expects to see growers make more use of the federal H-2A guest worker program, which will result in higher labor costs.
"If you're a worker who lives in Mexico and wants to work up here, do you want to hire a coyote to come across the border, pay him a lot of money (and he might shoot you), buy an old junker car, and find a job, and Homeland Security is going to be chasing you all the time?
"The other scenario is H-2A. You're going to be recruited down in Mexico. They give you a nice bus or airplane ride up here; you're going to have ho and transportation up here. You're not going to pay any income tax or social security. Then, when you get done, they're going to load you on a bus or airplane and take you home.
"Which scenario do you think is going to work in the long term?" he asked. "I think that latter scenario is going to work."
Allan said his company has started the H-2A program. Allan Brothers will have a year-round crew of people who will work on pruning and tree training and then become supervisors of H-2A workers brought in for the busy times of year, such as thinning and harvest.
Allan calculates that the ho his company, Yakima Valley Orchards, provided for H-2A workers cost $9,120 per employee to build, with an annualized capital cost of $1,118 per person. The company also bought a van to transport the workers locally at a capital cost of $1,715 per employee. He estimates the annual cost of the van, including insurance, at $628 per employee.
On a daily basis that works out to be: $7 per employee for ho, $6 for administration and services, $9 for travel to and from Mexico, and $10 to $20 for local transportation, with a total daily cost per person (excluding wages) of $32 to $42. Allan thinks that employers will also have to pay medical insurance for the workers, so they're covered in case of accidents, at a cost of $10 to $15 per person per day.
"I think our H-2A program is going to increase our labor costs by 40 to 60 percent," he said.
Orchards that can be harvested from the ground and potentially cut labor needs, might not have sufficient yield potential because of their small canopy, Allan said. That's why the Washington Tree Fruit Research Commission is funding projects to develop technology to increase harvesting efficiency and reduce labor requirements. Such technology will work best in orchards where the trees grow in a single plane. It will be important for growers to design their orchards to accommodate the technology, he stressed.