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