Many Washington State tree fruit growers have been slow to adopt technology in the orchard so far, but unless they start making significant changes, their production costs could double in the next 50 years, according to Karen Lewis, Washington State University Extension educator.
In a presentation at the Washington State Horticultural Association convention, Lewis and orchardist Jerry Haak noted that picking methods have changed very little over the last 65 years. Growers switched from using metal picking buckets to the lighter canvas picking bags, from using 14-foot wooden ladders to 10-foot aluminum ladders, and from picking into wooden boxes in the field to picking into bins.
But the rising cost of labor will force growers to make dramatic changes in the next few years, Lewis and Haak warned.
Washington’s minimum wage is linked to a cost-of-living index. Assuming an increase of 3 percent per year, it will rise to $12.47 by the year 2020, Lewis calculates, and tree fruit producers generally pay 10 to 30 percent more than the minimum wage. Rather than fighting the increases, growers need to change the way they do business and meet the challenge of the minimum wage, Lewis suggested.
Haak said growers can’t control the price of fruit or the minimum wage, but they do have control over two factors: the quality of the fruit and the amount of labor it takes to produce it.
He calculates that it takes about 6.8 hours of labor to produce a bin of apples, at a yield of 50 bins per acre. That’s about $58 a bin at today’s wage rates. In 2020, if growers don’t make any new strides with technology to reduce the number of hours worked per bin, the labor cost per bin will be $100.
“If you don’t make any changes, your costs will probably double in 2020,” Lewis said, noting that the prices for fruit are unlikely to increase significantly in the next 15 years. “Wages will increase, while the availability of labor is uncertain.”
Growers need to implement labor-saving technologies, such as platforms to replace ladders. More advanced equipment, including robotics when they become available, will enable growers to have a more stable, long-term work force.
Haak estimates that 80 percent of orchard workers in Washington are seasonal, and 20 percent full time. “I think in the future—assuming the technologies are going to be there—we will see a flip-flop. I see the day when we’ll have only 20 percent seasonal and 80 percent full-time workers.”
Growers can reduce their costs and increase their revenues by making sure that a higher percentage of the fruit they harvest and send to the warehouse is target fruit—premium grade in sizes 88 to 64 that sell for higher prices.
Haak recommended growers study their pool closing and packout statements for last year’s crop to find out how many boxes of target fruit they’re producing per acre. He guessed that industrywide the percentage might be as low as 30 percent.
Statistics on Washington’s 2004 crop, compiled by the Washington Growers Clearing House Association, show that 35 percent of the Red Delicious shipped during the 2004-2005 season were Extra Fancy grade in sizes 80 and larger, and 39 percent of the Golden Delicious crop was in those grades and sizes. No season-long statistics were available for Gala, but during the week ended December 13, 2005, for example, only 20 percent of the Galas shipped from controlled-atmosphere storage were reported to be Washington Extra Fancy in sizes 80 and larger. The f.o.b. price for the largest Galas was $22.90 a box, compared with $12.54 for the smallest.
“In order for us to survive, we’re going to have to get the amount of target fruit up to 85 percent of the fruit we’re producing in the field,” Haak said. “I believe apple growers who survive in the next fifteen years will be cutting the hours worked per acre by 50 percent at the same time as producing twice as many boxes of target fruit per acre. We will make our work force more productive, and by focusing on target fruit, we will become more profitable.”