AgJOBS, E-Verify, Economy & Market Forces, Labor

Ag Growth Dips Slightly, Report Says

From TheCalifornian.com, Leslie Griffy, 14 Jun 2011.

Strawberries await harvesting in 2010 the year the fruit surpassed all other agricultural output to become Monterey County's most valueable crop. / The Salinas Californian

Strawberries await harvesting in 2010 the year the fruit surpassed all other agricultural output to become Monterey County's most valueable crop. / The Salinas Californian

[Monterey County, CA] — For the first time in a decade, the value of Monterey County’s agricultural output dipped slightly, according the annual crop report released Tuesday.

The decrease comes agricultural leaders are increasingly concerned over proposed hiring regulations that they believe could cripple their industry.

Monterey County produced more than $4 billion in food products in 2010, down by 0.7 percent from 2009 numbers, Agricultural Commissioner Eric Lauritzen said Tuesday. The last time the value of the county’s largest industry dipped was in 2001.

But since that last drop, efficiencies and new technology helped the industry nearly double its revenues, Lauritzen said. During the last downturn, the county’s agricultural output was valued at $2.85 billion. Today it’s a $4 billion industry.

“There were a lot of crops that were in the red this year,” said Green Giant by Fresh Express Vice President of Agriculture Operations Sam McKinsey. “But we still managed to be the main industry in the local economy.”

Increasing costs and a consumer base that had lost interest in higher-end goods drove the 27 million in revenue losses, officials said.

Inputs including fuel, fertilizer and packaging increased in cost, as did the price of employee benefits, such as health care, officials said. At the same time, sales of higher end wine and more expensive pre-packaged vegetables dropped as recession weary consumers spent less.

“There have been problems selling wine to restaurants and with people not buying wine at higher-price points,” said Rhonda Motil, director of the Monterey County Vintners and Growers Association.

Wine grape revenues dropped 27 percent in 2010 because of the price-related issues and a smaller crop. Other crops that lost value include: leaf lettuce, nursery crops, spring mix and the county’s top crop, strawberries.

On the bright side, there are signs that consumers are beginning to spend more, said Mike Jarrard, CEO of Mann Packing Co.

The Monterey County agricultural industry was able to grow revenue from exports by 14 percent, an increase of 67 million pounds in fruits and vegetables, according to the report.

The growth in exports, Monterey County Farm Bureau Director Norm Groot said, was driven by shipping improvements. It’s a market that could grow if free trade agreements are approved in Washington D.C.

“We need to look to international markets for expansion,” Groot said, “and we can succeed in those markets if given a chance.”

Other strong areas include anise, broccoli, cattle, citrus, head lettuce, peas and raspberry crops, all crops that saw revenue growth in 2010.

Jarrard said that First Lady Michelle Obama’s work on healthy eating and new dietary guidelines that include more vegetables could also help the industry.

However, not all of the news coming from Washington D.C. is good for Monterey County agriculture, he said.

Industry leaders said they were concerned that in the next few weeks the Congress may pass legislation requiring employers to check the immigration status of all workers using a federal database known as E-Verify.

They said the plan as it currently exists makes no exemption for the agricultural industry, which relies, in part, on an undocumented workforce.

Jarrard called that scenario a “train wreck.”

“We could have a severe shortage of workers if E-Verify passes without some form of guest worker program,” Bogart said.

As recently as April, agricultural leaders had backed a proposal to offer existing illegal workers citizenship if they agreed to work in the industry for a set amount of time. That measure, known as AG JOBS, also had the backing of the powerful farm labor union the United Farm Workers.

But because of the “toxic” environment surrounding immigration issues in D.C., growers have backed away from the plan, Bogart said. They know favor an as-of-yet undefined guest worker program that would send foreign laborers back to their home countries after a set amount of time.

“I don’t think there is a snowball’s chance that (Ag Jobs) is going to pass,” Bogart said.

The state-mandated crop report reflects only gross revenue; business costs and profits aren’t included.

Source: TheCalifornian.com, “Ag growth dips slightly, report says” by Leslie Griffy, 14 Jun 2011.

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