Grape Growers Ponder Labor Issues

Posted: May 06, 2017

Vineyard management executive: Immigration down and cost of living on the rise

Santa Rosa, Calif.—After worrying about water for the past few years of drought, California grapegrowers and wineries are now increasingly concerned about labor.

Talk and action by the Trump administration has had a chilling effect on agricultural workers, from much lower border crossings by unauthorized workers to fear that immigration enforcers may show up to arrest and deport even legal workers.

This recent activity adds to ongoing trends as the labor force grows older with insufficient replacements entering the market. The North Bay Business Journal addressed these concerns and more at its annual Wine Conference on April 28.

The audience was primarily from California’s North Coast, so the concerns were a bit different than they might have been at a similar meeting in Modesto. North Coast wineries pay better but are little mechanized. In fact, most Napa and Sonoma vineyards aren’t planted with mechanized operations in mind. That’s as true of pruning, hedging, positioning and suckering as it is of picking, all expensive operations by hand.

The primary speaker on labor issues was Eric Pooler, vice president of winery relations for Silverado Investment Management Co., which manages 21,000 acres of vineyards in the North and Central Coasts as well as in Australia and New Zealand.

The firm is part of Westchester Agricultural Asset Management, itself a subsidiary of TIAA-CREF, a leading financial-services provider founded as Teachers Insurance and Annuity Association of America. TIAA manages almost $1 trillion in assets.

Pooler started by admitting that the crackdown on immigrants has left his company in a tight spot. “Immigrants have dropped from 1.7 million a year to 170,000.”

Meanwhile, deportations rose heavily under Obama, and that trend has grown even tighter under Trump.

The cost of living has grown rapidly, too. “The average house in Napa rents for $2,400 per month,” said Pooler. That’s prohibitive even though average wages in Napa Valley for farmworkers already approach $15 per hour, the mandated rate in the future. Even so, Pooler predicts wages will rise to $20 per hour as the minimum wage rises and forces others to pay up.

Alternative jobs in hospitality and construction are siphoning away workers including legal ones. In addition, the workforce is aging. Pooler said, “Farmworkers’ children aren’t interested in farm work. They prefer business to picking grapes.”

Pooler noted that the children of one of his Latino farmworkers have moved far from agriculture. One is a public defender, and another manages risk investment for an insurance company.

In addition, California AB 1066 will make growers pay overtime after eight hours instead of the current 10 hours for farm workers. Growers will likely cut hours or may arrange labor swaps to avoid paying overtime, which ironically could hurt farmworkers’ earnings.

Workers might prefer piece rate payments, which would allow them to make more, though quality may suffer as workers rush. Pooler notes that growers can hire workers through the H2A visa program, which provides them with a committed workforce that returns regularly, but it involves a costly and complex filing process.
“It’s a bureaucratic gridlock,” he warned. H-2A employers are required to pay inbound and outbound transportation, provide free housing and meals for their workers.

Of course, no one can be sure what will happen in today’s administration, but Pooler thinks that the H2A program may be revised or replaced.

He also sees more and more women in the field, saying that 30% of workers today are female, a figure that’s likely to grow.

One way to reduce labor issues is to offer year-round employment, a common technique in Napa Valley. The workers can help with other crops like olives, which are harvested later than grapes, as well as tend gardens, work on landscaping or assist in the cellar.

One other step that’s happening to compensate for rising labor costs is increasing yields. This can result from replanting older vines with tighter spacing or improved plants or management, but it may require winemakers to accept higher yields.

All said, however, mechanization looms as the largest potential labor savings, as it has in so much of U.S. industry and agriculture. “Mechanization will have a big impact in the future. You can achieve a 75% cost savings with mechanization,” Pooler claimed.

Fortunately, today’s agricultural technology is constantly improving, and many growers and some winemakers admit that mechanical harvesting with today’s machines can deliver pristine berries, eliminating the need for costly sorting in the cellar.

Some growers and wineries in the North Coast already harvest by machine, but most don’t talk about it. Others will likely have to reconfigure their vineyards—but perhaps most difficult, convince customers that machines are just as good as farmworkers—even for a $50 Napa Cabernet.

The conference also considered acquisitions (there aren’t many mergers), imports, the strong dollar and the impact of cannabis as well as discussions of current issues by vintners Tom Klein of Rodney Strong and Dan Duckhorn, grower Andy Beckstoffer and Emma Swain, CEO of St. Supéry.

by Paul Franson
May 01, 2017
Source: Wines and Vines

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