August 27, 2013 in Business

Farmers’ labor costs surge

Result is ‘tighter profit margins,’ farm bureau official says
Kristi Pihl Tri-City Herald
 
Price of production

Washington farms on average spent about $216,000 to produce crops last year. That’s 23 percent more than the previous year.

Labor-intensive crops, the nation’s highest minimum wage and a shortage of skilled workers are contributing to an increase in labor costs for Washington farmers.

Washington farmers saw average labor costs leap about 36 percent from 2011 to 2012, according to a recent study released by the U.S. Department of Agriculture.

Nationwide, labor costs increased by only 15 percent, the study said.

Farmers can’t pass cost increases on to consumers, said Scott Dilley, Washington Farm Bureau associate director of government relations. They get whatever price the marketplace sets.

“Our farmers have to survive on tighter profit margins,” Dilley said.

Higher labor costs also can put Washington agriculture at a disadvantage in competition with other countries, where workers may earn substantially lower wages, he said.

“Agriculture is not just a local industry,” Dilley said. “It’s something that is really international.”

Farmers also reported higher costs for rent, agricultural chemicals, fertilizer, supplies and maintenance, farm machinery and seeds, the study said.

Steve Cooper, a Franklin County row crop farmer and vice president of policy development for the Washington Farm Bureau, said machinery costs have gone up significantly.

A tractor can cost as much as a house, and a combine can cost as much as two houses, Cooper said.

Overall, a Washington farm on average spent about $216,000 to produce crops last year, according to the study. That’s 23 percent more than the previous year.

U.S. farmers on average devote not quite 9 percent of their total farm expenses to labor. Washington farmers, however, report an average of about 22 percent of their expenses as labor costs.

For some labor-intensive crops, such as tree fruit, the percentage is much higher, such as 50 percent, Dilley said.

The Mid-Columbia is home to crops such as apples, cherries and blueberries, which are harvested by hand. Wine grapes also may be picked by hand. Pruning, thinning and weeding may need to be done by hand for certain crops.

Farmers with labor-intensive crops are also the ones most affected by the labor shortage. It means some of them are paying higher wages, attracting workers from other area farmers or causing those farmers to also increase pay.

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