The Cost of Doing Business in California Agriculture

While everyone is a little bit tired of hearing about inflation, our products are far from immune from the cost increases seen in other parts of the economy. Cartons and other packing materials have gone up in excess of 15%, chemicals and fertilizer in the field have increased substantially with some products more than doubling, and labor has become in short supply and more expensive. Farmers in California are not only looking at regular per hour wage increases, but have also completely lost agriculture overtime exemption (only one of two states in that situation). The latter not only makes activities after forty hours uneconomical, but further increases the strain on a short labor supply. If you have read our newsletter over the last couple of years, you are aware of our efforts to do more with less—we believe this is now more important than ever. On top of all of this is the uncertainty of the future impacts that COVID may have in 2022. Ever changing rules on quarantine procedures and requirements, uncertain labor availability even in the best of situations, and increases in the costs of doing business make 2022 a pivotal year for many growers in our area.

-Jon McClarty

One Year Later: An open letter from Sarah McClarty

One Year Later: An Open Letter from Sarah McClarty, HMC Farms

Twelve months ago, I wrote an open letter to give an update on how HMC Farms was dealing with the pandemic. I was asked to write a follow-up piece once everything “settled back down” in a few weeks, which became a few months… fast forward to a full year removed from that letter, and things are still far from settled.

Something people often do not understand is that there is no rest in agriculture. Beyond farming being an all-consuming way of life, there is no pause button. If you are sick, the plum trees don’t prune themselves and the grapes don’t stop growing. If we miss a harvest by a window of even a few hours, we risk losing an entire block of peaches.

When you already work in an industry with no pause button and then must deal with new rules and regulations overnight, it is exhausting. Being an essential business is a privilege, but also a burden.

Over the past year, there have been several instances when a compliance deadline for a new rule or regulation was approaching with no formal guidance or FAQs from the issuing body, which meant we put our normal jobs aside to digest the new rules and create our own policies to be in compliance.

We did not have the ability to close the office for a short time to get this done. Instead, it meant working on these special projects all day (or week) and then starting in on our regular job duties when the workday would normally be ending. It also meant waking up in the middle of the night thinking about an angle that hadn’t been considered.

Photo of CFO Sarah McClarty wearing a blue and white checkered shirt in a peach orchard with quote: For the last year, owning and operating a vertically integrated farming organization has meant laughing at the idea of being able to take a day off. It has meant being tired all the time; it has meant no rest.

For the last year, owning and operating a vertically integrated farming organization has meant laughing at the idea of being able to take a day off. It has meant being tired all the time; it has meant no rest.

We, as owners and management, are not the only tired ones, so are our employees. Working in the field or a packing house is arduous work. Having to go home after a long day of work to help children do schoolwork, worry about being around vulnerable family members, and dealing with the burden of a global pandemic has weighed heavily on them too.

Our employees are our family, and not being able to give them answers or put all their worries to rest is hard. We have been able to offer them continued access to our free health care clinic, which included same-day appointments for COVID tests when everywhere else had a 3-5 day wait to get an appointment. We have also had the benefit of working with the California Farmworker Foundation to be one of the first sites in California to give on-site (literally right on the farm) vaccines to farmworkers in early February, and then again to any employees in our organization that wanted them a few weeks later. So many people left the building after receiving their vaccine smiling, thanking us for getting the vaccines to them, and in general, being able to finally put their minds at ease. In all honesty, seeing that weight lifted from their shoulders was the highlight of the past year for me.

Just like last year when I wrote the letter, we are approaching our harvest season, which again brings a lot of questions and unknowns. We have raised wages. Packaging has even longer lead times and higher costs. We are spending more money on PPE, increased sanitary measures, testing, and contact tracing; all while losing efficiencies because of the priority we put on safely distancing employees.

Most of our retail customers are not willing to pay more for our products, even though it is costing us more to produce them and the outlook for the foodservice industry is still full of question marks. Crunching those numbers keeps me up at night.

A year without rest is hard, but we believe in what we do and are dedicated to growing the best fruit we can. As always, we will get creative in the solutions we offer our customers and put our employees’ best interests at the forefront of our decision-making. Hopefully someday soon I can write that “settled back down” update and take a vacation, but for now we will be doing our best to get fresh fruit on people’s tables all summer long.

Photo of CFO Sarah McClarty wearing a blue and white checkered shirt in a peach orchard with text that reads: one year later, an open letter from Sarah McClarty at HMC Farms

Note from The Produce Moms original blog post featuring Sarah’s letter:

One year ago, The Produce Moms Covid-19 content series provided our community of consumer followers with perspectives and real-life stories from the agriculture supply chain.  In our series, we posted a guest blog authored by Sarah McClarty, Chief Financial Officer and Co-Owner of HMC Farms.  You can read it here.

Rooting back to 1887, HMC Farms is a multi-generation family farm located in California’s Central Valley. HMC Farms is a leading grower in table grapes and tree fruit including peaches, plums, nectarines and plumcots.

HMC Farms is a leader in bringing fresh produce to schools.  You can learn more about their commitment to schools at grapesforschools.com. And you can learn more about the family farm at HMCFarms.com.

HMC Farms and The Produce Moms have been brand partners for nearly 4 years.  We are so passionate about what they do and the delicious fruit that they grow. Enjoy this reflective letter from Sarah, one year later.