Washington farm labor costs increase 36%

By Kristi Pihl, Tri-City HeraldAugust 25, 2013 

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

Washington farmers saw average labor costs leap about 36 percent between 2011-12, 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 onto 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.

The average hourly wage for a farmworker in Washington and Oregon has increased by 74 cents between October 2007 and October 2011, according to a 2012 analysis by the state Employment Security Department. The 2013 report on the 2012 data is not yet available.

The average hourly wage was $12.04 in Washington and Oregon in October 2011, compared to the $11.15 national average and $10.96 in California, another state with labor-intensive crops.

Dilley said farmworkers may earn closer to $12 to $16 an hour, depending on the crop.

Few farmworkers make minimum wage, but farmers say having the nation's highest minimum wage at $9.19 an hour still adds to what they pay workers.

The higher minimum wage drives up the hourly wage and piece rate that workers earn when harvesting certain crops, Cooper said.

And the shortage of workers is leading more farmers to turn to the federal H-2A temporary agricultural program, which sets the base wage even higher.

Farmers using the program must pay workers $12 an hour, not counting the transportation and housing costs a farmer is also required to cover for foreign workers, said Dan Fazio, director of the Washington Farm Labor Association.

About 5,000 guest workers will be brought into Washington this year, 25 percent more than last year, Fazio said.

And farmers who bring those workers in will end up having to increase their wages for all of their workers, making $12 an hour the new minimum, he said.

-- To submit business news, go to bit.ly/bizformtch.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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