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February 27, 2015 CapitalPress.com 17 Study: Minimum wage hikes hurt more than help By DAN WHEAT Capital Press SEATTLE — Increasing the minimum wage hurts a state’s economic competitive- ness and hinders low-income workers more than it helps them, according to the Wash- ington Research Council. To offset the increased cost of paying higher wages, busi- nesses tend to cut jobs and reduce hours, according to a report by the Seattle-based nonpartisan council, released on Feb. 20. Higher minimum wages can increase the earn- ings for a few workers in the short-term but reduce the earn- ings of lowest-skilled workers in the long-term, the report says. Washington has the highest minimum wage in the nation at $9.47 per hour. It is one of 10 states that indexes annual increases in the wage to infla- tion. A proposal in the Wash- ington Legislature, House Bill 1355, would accelerate the an- nual minimum wage increases. The bill is unlikely to pass the Senate. Minimum wage hikes concern the state’s tree fruit industry, which hires more than 55,000 seasonal workers during apple harvest. While higher piece rates prevail during harvest, workers are paid minimum wage for some tasks. The WRC study correctly notes the minimum wage is a blunt instrument in a com- plex situation, said Desmond O’Rourke, a retired Washing- ton State University agricul- tural economist and private consultant. Increasing the minimum wage in a poor economy may slow employers but it has little effect in a good econo- my, O’Rourke said. Studies abound on both sides of the ar- gument on whether minimum wage increases are good or bad, he said. Minimum-wage jobs are supposed to be entry-level, not career positions, O’Rourke said. But political campaigns to raise minimum wages sound good, he said. The minimum wage takes the decision out of employers’ hands as to what value or pro- ductivity they are getting from the employee for the wage, he said. In 2014, the Congressional Budget Office estimated rais- ing the federal minimum wage to $10.10 per hour would re- duce employment by 500,000 jobs, the WRC report states. In the late 2000s, mini- mum wages rose an average of 30 percent across the U.S., reducing the national employ- ment-to-population ratio by .7 percent, the report states. In other words, there were fewer jobs per person. A 2012 study found for each 10 percent increase in the minimum wage about one- sixth fewer jobs are created, the report says. The report also cites a 2008 study by David Neumark, an economics professor at the University of California-Ir- vine, and William Wascher, deputy director of research and statistics at the Federal Reserve Board. They concluded higher minimum wages reduce em- ployment of those with fewer skills, reduce earnings of the lowest skilled, do not reduce poverty, limit acquisition of human capital and have long- term negative impacts on wages. Experts say Oregon’s Project protects farming family’s legacy wine industry is poised for continued growth KETCHUM, Idaho — A By JOHN O’CONNELL Capital Press By ERIC MORTENSON Capital Press PORTLAND — Ore- gon’s wine industry, which has gained an international reputation for high quali- ty, still has room to grow, experts said Feb. 24 at the annual Oregon Wine Sympo- sium. Christian Miller, whose company Full Glass Re- search ana- Freund lyzes the eco- nomic impact of the wine industry, and Silicon Valley Bank execu- tive Mark Fre- und delivered “state of the Miller industry” talks during the symposium’s opening event at the Oregon Convention Center. Both described an indus- try that has grown rapidly in the past decade, gained acclaim from reviewers and has an economic ripple effect that outpaces other agricultural sectors. Mill- er estimated the Oregon wine industry’s economic impact at $3.35 billion, counting crop value, sales, jobs and direct and indirect services and businesses. Oregon vineyards and wineries spend $14.1 mil- lion annually on glass, $7 million on labels and $6.5 million on corks, Miller said in his report, “The Economic Impact of the Wine and Wine Grape In- dustries on the Oregon Economy.” But Oregon produces no glass or corks and has only two mobile bottling busi- nesses serving wineries, he said. There’s only one oak barrel manufacturer in the Pacific Northwest, Miller said, ticking off some of the opportunities for busi- ness expansion. Wine grapes in 2013 be- came Oregon’s most valu- able fruit and nut crop, reaching $128 million in value and surpassing ha- zelnuts, pears, cherries, apples and peaches, among others. The wine grape crop has quadrupled in val- ue since 2004, Miller said. Oregon’s average price per ton of grapes was $2,249 in 2013, far more than the $713 per ton average paid to California growers and $1,110 paid to Washington growers. Only growers in California’s Napa County received more than the Or- egon average. Oregon is best known for Pinot noir wine produced in the Willamette Valley, and Pinot noir grapes make up 67 percent of the total wine grape crop value, Mill- er said. But the Pinot gris wine coming out of South- ern Oregon is under-appre- ciated, Miller said. “Oregon has barely scratched the public con- sciousness (with Pinot gris), so there’s a lot of up- side potential,” he said. Freund, of Silicon Valley Bank, said the bank’s wine division works with about 100 West Coast vineyards and has about $1 billion in loans out for construction and capital expenditures in the wine industry. Market indicators show Oregon’s is well situated for continued growth, he said. “Oregon has a clear identity out in the market,” Freund said. “Oregon does really well in converting tasting room visitors to purchasers.” Baby boomers continue to dominate in fine wine purchases, but millenials — people in the 21 to 36 age group — are discov- ering quality wine as well, Freund said. “They’re starting to show some signs of life, which is a great thing,” he said. Freund said the over- all economic outlook con- tinues to improve, which bodes well for wine sales. He said the U.S. recovery is leading the rest of the world, wages are rising and unemployment may drop to 5 percent by the end of the year. He predicted oil prices will remain depressed well past 2015, and said fine wine sales will grow 14 to 18 percent. unique Blaine County land and water protection program recently provided the final bit of funding needed to preserve a family’s agricultural legacy. Bill and Maxine Moly- neux, who sold or gifted much of their large farm and ranch to their children, have long expressed a strong desire for the property to be kept whole. Thanks to a collabora- tive effort involving several Molyneux family members, government agencies and nonprofit organizations, the land will remain undeveloped in perpetuity. The Molyneux Legacy Project preserves the de- velopment rights of five separate easements, total- ing 2,000 acres — mostly irrigated alfalfa and grain. Easements encompass agri- cultural land and wetlands near Silver Creek Preserve owned by Bill and Maxine; ranches owned by John and Kristy Molyneux and John, Chip and Billy Molyneux along Highway 75; Chip and Kathy Molyneux’s land abutting Craters of the Moon National Monument and Bil- ly Molyneux’s ranch along Silver Creek and the Little Wood River. Usual farming and ranch- ing activities are allowed to continue, but the land can nev- er be developed. Blaine County’s Land, Wa- ter and Wildlife Program ap- Dayna Gross/For Capital Press This agricultural land, owned by Chip and Kathy Molyneux in the foothills of the Pioneer Mountains, is included in a recent project to protect 2,000 acres of Molyneux land from the potential for future development. proved $992,000 toward the project on Feb. 17. Clare Swanger coordinates the program, established in 2008 to provide matching funds to leverage federal dol- lars for conservation projects such as development ease- ments and fish ladders. A two- year Blaine County tax levy generated $3.4 million for the fund — the first program of its kind in Idaho. “We’ve partially funded several projects that would have been extremely difficult to complete without this pro- gram,” Swanger said. The Molyneux children be- came interested in preserving the family farm after Bill and Maxine preserved their first easement in 2009. Kathy Moly- neux said other local land own- ers have taken notice. “We have two other neigh- bors who have contacted us, and one has already made con- tact with the Nature Conservan- cy about moving forward with easements,” she said. Kathy said payments for de- velopment rights have helped the family pay down mortgages and expand their farms, though the family agreed to take below the appraised value of their de- velopment rights. “Some of them have already purchased other property that was going to be developed,” she said. The easements will be held by the Nature Conservancy, which contributed $100,000 to- ward the project, and the Wood River Land Trust. “The way the project hap- pened is a couple of them went to me and were interested in doing easements, and a cou- ple went to the land trust, said Nature Conservancy conser- vation manager Dayna Gross. “I thought it would be much more compelling to get every- one to do it at the same time.” The NRCS Farm and Ranch Protection Program, now part of the new Agricultural Con- servation Easement Program, will provide half of the fund- ing, with exact figures released after the project closes. “Usually, you have family members arguing about wheth- er or not to do easements,” said Keri York, with the Wood Riv- er Land Trust. “To have five different contingents of a fam- ily ranch do it at once is really unique and special.” Feedlot inventory slightly higher By CAROL RYAN DUMAS Capital Press Cattle on feed numbers in large U.S. feedlots on Feb. 1, at 10.7 million, were slightly higher than last year’s count. Placements into those feedlots in January were 11 percent be- low year-ago levels, and fed cattle marketed during January were down 9 percent below a year earlier with one less busi- ness day than January 2014. USDA’s latest cattle on feed report, released Feb. 20 by the National Agricultural Statistics Service, came close to industry estimates, which expected on-feed numbers to be down slightly. Marketings were down a tad from industry expectations, and placements were a little higher than expected, said Ron Plain, ag economist with the University of Missouri. January placements, at 1.79 million, were 11 percent below January 2014, but those much lower placements shouldn’t be a surprise. January 2014 place- ments were up nearly 9 percent year over year, he said. Placements for all of 2015, however, should be up a bit from 2014 given a slight in- crease in the 2014 calf crop and a slightly higher supply of feeder cattle outside feedlots at the start of the year. Market- ings in all of 2015 should also be up slightly from last year, he said he said. Placements in 2014 dropped quite a bit after Janu- ary’s gain of near 9 percent and February’s increase of 15.5 percent. The year’s placements averaged 1.8 percent lower than 2013, he said. Placements this January were down for all weights of cattle except the heaviest, those weighing 800 pounds or more, which were up 2.8 per- cent over January 2014, Plain said. That reflects the lack of enthusiasm by cattle feeders — cattle feeding was not at all profitable in January, he said. Those heavier weight cat- tle that needed to go on feed for finishing went. The lighter ones that could wait are wait- ing, he said. Placement numbers of heavier cattle continue to skew higher, with placements of cattle weighing less than 700 pounds down 18 percent from year-ago levels, Steve Meyer and Len Steiner reported in their Daily livestock report on Feb. 23. “Feedlots appear to be front loaded given the supply of cat- tle that have been on feed 120 days or more is 15.5 percent larger than last year and that placements of heavy cattle have been higher for the past few months,” they said. Seasonally, marketings of fed cattle are lighter in March and April and pick up for the higher marketing period of May through August. So mar- ketings should stay fairly light for another 60 days or so, Plain said. Idaho bill to help PCN-affected potato growers dies By SEAN ELLIS Capital Press BOISE — Idaho lawmak- ers have refused to introduce a bill that would have pro- vided some financial relief to potato growers who face additional regulations in the effort to control pale cyst nematode. The bill was authored by Idaho Farm Bureau Federa- tion and would have applied to potato growers in a fed- erally regulated area in East Idaho. The PCN parasite, which can significantly reduce yields, was first detected in this state in a small area of Eastern Idaho in 2006. There are 18 growers in that federal PCN monitoring program, which regulates 7,734 acres, including 26 in- fested fields encompassing 2,897 acres. Fields in the regulated Courtesy of USDA APHIS An Eastern Idaho potato field infested with pale cyst nematode is prepared for a methyl bromide treatment. The federal government recently approved another $400,000 for the program. area that are not infested with the nematode can still grow potatoes but they face strict testing and phytosani- tary requirements. The IFBF’s proposed bill would have allowed those growers to ask the Idaho Potato Commission for a refund of the state’s potato assessment, which is 12.5 cents per hundred pounds. Those growers who face the additional regulations are benefiting the entire in- dustry by helping ensure PCN is not spread, IFBF Director of Governmental Affairs Russ Hendricks told members of the House Agri- cultural Affairs Committee Feb. 24. They face financial du- ress because of the addition- al regulations, he said, and allowing them to ask for an assessment refund “would be one small way of helping to cover some of those ex- penses.” “If they go out of busi- ness, they won’t be grow- ing any potatoes and those assessments won’t be there anyway,” Hendricks added. He said the best esti- mate by regulated growers is that allowing them to ask for a refund could cost the IPC in the neighborhood of $500,000 annually. The IPC’s current budget is $14 million. The refund provision would not have been retro- active and it would not have applied to anyone who pur- chased or leased regulated land after the effective date of the bill. The House ag committee, on a voice vote, overwhelm- ingly opted not to introduce the bill. Rep. Julie Van Orden, R-Pingree, said she had a problem asking the IPC to absorb the cost of the refund when the regulations are fed- eral. “I have a real concern about who this is aimed at at this time,” she said. The proposal was op- posed by the potato commis- sion. IPC President and CEO Frank Muir told committee members that almost $80 million in federal, state and IPC money has been spent trying to control and eradi- cate PCN since its discovery in Idaho. The IPC has spent more than $1 million of all grow- ers’ money on PCN research and commission staff has spent “untold hours on PCN over the last eight years,” he said. Muir later told the Capi- tal Press through a text mes- sage that the commission “will continue to work with PCN-affected growers as we have for over eight years to minimize the financial im- pact on them and work to- ward eradication of PCN.”