12 CapitalPress.com
October 27, 2017
Price spikes often prompt manufacturers to pull back on frozen blueberry purchases
BERRIES from Page 1
“Not only were we quite short, but the
percentage that went fresh was large,”
Cook said.
Prices for “individually quick fro-
zen” blueberries received by proces-
sors jumped from about 85 cents per
pound to $1.20 per pound, though
they’ve since settled at about $1.10 per
pound, he said.
Price spikes often prompt food
manufacturers to pull back on frozen
blueberry purchases, but the recent
increase isn’t likely to have a severe
impact, he said.
“It’s not outrageously priced, so I
don’t think you’ll see a massive fallout
in demand,” Cook said.
New blueberry plantings will inev-
itably cause production to rise over the
long term, but growers are increasing-
ly geared toward the fresh market, he
said.
“Almost nobody designs a farm
around processed,” he said.
Reduced frozen blueberry inven-
tories may also boost prices for next
year’s crop, said John Shelford, stra-
tegic adviser to the Naturipe Farms
food company. If buyers consume fro-
zen blueberries at the same rate as last
year, cold storage inventories of the
crop will fall to 100 million pounds
before next harvest, he said.
“If we see that, it will be a price in-
crease,” Shelford said. “Do I think we
can do that? Yes. Do I think it’s a slam
dunk? No.”
Cold storage inventories of
frozen blackberries have de-
creased 18 percent since last au-
tumn, from 38.7 million pounds to
31.6 million pounds, according to
USDA. Processors have seen a price
increase — from less than 90 cents
per pounds to about $1.10 per pound
— but it’s lower than expected in light
of lower production, said Dave Dunn,
general manager of the Willamette
Valley Fruit Co.
“The crop was way down but the
price isn’t very good,” he said. “Peo-
ple were expecting more than that, I
think.”
A cold, wet spring generally sup-
pressed yields of blackberries, which
had already suffered from winter cold
damage, said Tom Peerbolt, a crop
consultant.
“It’s been a very unsettling year for
berry crops across the board,” he said.
Demand for frozen blackberries
has been tepid because food manufac-
turers are sourcing them from Mexico
rather than the U.S., which has pre-
vented prices from rising more sharp-
ly, Dunn said.
“The low production we’ve had
this year has not turned into a high
price year, which is historically what
would happen,” said Ken Van Dyke,
a Cornelius, Ore., farmer and board
member of the Oregon Raspberry and
Blackberry Commission.
Chile has large amounts of leftover
frozen blackberries and is likely mo-
tivated to sell them quickly to make
room in freezers for the next crop,
which is harvested in January, Van
Dyke said.
Weak prices for blackberries are
convincing some farmers to shift into
more attractive crops, such as hazel-
nuts, he said. “The margins just hav-
en’t been strong enough to keep the
interest of a lot of growers.”
Competition from South American
countries, where labor costs are much
lower, poses a long-term threat to U.S.
berry production unless trade policies
are changed, said Mike Townsend,
a grower and processor near Fair-
view, Ore.
Fastest pickers make equivalent of $50 per hour on piece-rate in apples
WORRIES from Page 1
president of the Washington
State Tree Fruit Association.
At stake is Washington’s
biggest agricultural sector. The
state’s apple industry alone is a
$2.4 billion per year business.
When cherries and pears are
added, the state’s tree fruit in-
dustry tops $3 billion.
The array of challenges
includes a whiff of unioniza-
tion efforts in orchards. The
Food Safety Modernization
Act requires costly testing of
irrigation water in orchards and
greater sanitation in packing
houses. Growers incur added
costs dealing with surprise au-
dits by the U.S. Department of
Labor and occasional Immigra-
tion and Customs Enforcement
raids looking for illegal immi-
grants. Congress has made little
progress toward immigration
reform to address the labor
shortage, which is only expect-
ed to worsen. And there’s un-
certainty about renegotiations
of the North American Free
Trade Agreement between the
U.S. and Washington’s top ap-
ple export markets of Mexico
and Canada.
Changes already
Small companies and grow-
ers already find it more difficult
to survive, and larger compa-
nies are combining efforts to
find more volume and efficien-
cies.
Gold Digger Apples Inc., a
small tree fruit cooperative in
Oroville on the U.S.-Canadi-
an border, filed for bankruptcy
in 2016. Its packing and stor-
age facilities were bought and
are now operated by Gebbers
Farms of Brewster and Chelan
Fruit Cooperative of Chelan.
Earlier this year, Smith &
Nelson, the last packing house
in Tonasket, 17 miles south of
Oroville, ceased packing but
is still growing and storing
fruit. The packing line needed
sanitation upgrades to comply
with new FSMA requirements.
Owner Scott Smith said several
factors went into the decision,
including the lack of a next
generation able to carry on.
Auvil Fruit Co. in Oron-
do and McDougall & Sons in
Wenatchee have both expanded
in recent years, saying “it’s go
bigger or get out,” and that they
need more volume to survive.
Washington Fruit & Pro-
duce Co., Yakima, and sever-
al other large companies also
have been expanding acreage
and replanting old orchards in
higher densities for more vol-
ume.
Chelan Fresh Marketing,
in Chelan, earlier this year an-
nounced the addition of Borton
Fruit, of Yakima, and Columbia
Valley Fruit, of Union Gap,
to its already large marketing
portfolio. It gives the company
greater volume, particularly in
organic fruit, to stay competi-
tive and provide retailers with
the service they expect, said
Tom Riggan, general manager.
Photos by Dan Wheat/Capital Press
A “pickers wanted” sign at Grant Road and Kentucky Avenue in East Wenatchee, Wash., on Aug. 28 is
indicative of the tight labor market.
A new 479,000-square-foot, highly automated fruit storage and ship-
ping center is under construction at Stemilt Growers, Wenatchee,
Wash., on Oct. 13. The facility will be able to store almost 1 million
boxes of fruit and ship them with few workers needed.
He foresees more tree plant-
ing and more marketing con-
solidation among independent
companies.
“Cost concerns are a big
deal all right,” said Bob Mast,
president of Columbia Market-
ing International in Wenatchee.
“It cost $30,000 an acre
to plant a new orchard a few
years ago, now it’s $60,000.
We’re watching all the regula-
tions coming at us. We want to
be compliant, but if they don’t
make improvements and make
sense, we definitely will chal-
lenge those,” Mast said.
Piece-rate pay
Perhaps the biggest chal-
lenge is to piece-rate pay, a cor-
nerstone of agricultural labor
economics. The piece-rate pay
lawsuit implies workers were
not being given due wages
when they actually were, DeV-
aney said.
“The implication that some-
one is doing something wrong
was alarming and offensive to a
lot of growers,” he said.
Growers like piece-rate pay,
which is based on the amount
of fruit picked versus hour-
ly pay because it provides an
incentive for pickers to work
quickly. It’s a useful tool when
a grower needs to get fruit
picked in a hurry because of
weather, fruit maturity or some
other variable, DeVaney said.
Pickers also like it because they
can make a lot more money, he
said.
Washington state’s mini-
mum wage is $11 per hour. But
a grower has to pay all of his
workers a minimum of $13.38
per hour, the Adverse Effect
Wage Rate, if he hires H-2A-vi-
sa foreign guestworkers. He
can also pay them piece-rate,
which usually equates to about
$20 per hour for good pickers.
The fastest pickers are highly
skilled and have been known to
make the equivalent of $50 per
hour on piece-rate in apples and
$70 per hour in cherries.
In 2015, the state Supreme
Court ruled in Demetrio v. Sa-
kuma Bros. Farms that piece-
rate workers had to be paid sep-
arately for rest breaks. Growers
had considered rest breaks to be
part of piece-rate pay and many
pickers worked right through
rest breaks.
Farmworker advocates and
attorneys involved in that case
took the next step by finding
workers to sue Dovex Fruit
Co., of Wenatchee, over the
practice of not paying piece-
rate workers separately for
meetings and for travel time
between orchards. The advo-
cates call that “down time” or
“nonproductive time.” Dovex
contends those activities are
included in piece-rate pay be-
cause they are supportive of
the work and that the law al-
lows growers and workers to
agree to those terms.
Plaintiffs not only want it
paid separately, but calculat-
ed hourly instead of weekly.
That, DeVaney said, becomes
a “logistical impossibility.”
Administrative rules and pre-
vious court decisions have
approved weekly calculations,
but if hourly calculations are
imposed it very likely will end
piece-rate pay, he said.
That, in turn, increases
costs because workers paid
hourly will likely work slower,
and a grower will have to hire
more workers to get the same
amount of work done, he said.
“The solution is not to add
more workers but maximize
productivity. Slowing down
and adding people is not a
good longterm solution, espe-
cially when workers are not
found able and willing to do
it,” DeVaney said.
He and others fear that if
piece-rate pay goes south so
will the fast pickers — to Cal-
ifornia, Florida or other states
with fruits and vegetables
where piece-rate pay still ex-
ists.
Grower costs will also
increase if they have to start
paying overtime, but the case
against the state’s agricultural
overtime exemption does not
appear to be very strong legal-
ly, he said.
Many agricultural functions
are exempt from state-required
overtime pay because the work
is seasonal and temporary and
may require longer workdays
but for short periods, DeVaney
said. It allows flexibility for a
grower caught by unexpected
variables such as weather.
Unionization
Growers and packers worry
unionization will increase costs
and reduce their flexibility in
handling labor needs. Years
ago, attempts were made at
unionizing packing houses
but they were unsuccessful
because workers decided they
might be giving up opportu-
nities to make more money at
the cost of paying union dues,
DeVaney said.
More recently, Washing-
ton Fruit & Produce, in Yaki-
ma, and Douglas Fruit Co., in
Pasco, staved off unionization
efforts by listening to workers,
Brendan Monahan, a Yakima
labor attorney, said at a labor
conference last winter.
“Why would employees
want to pay a portion of their
paychecks to a union when
they can get things addressed
with you?” Timothy Bernasek,
a Portland agricultural attorney,
asked a couple hundred agri-
cultural employers at the con-
ference.
Developments at Sakuma
Bros. berry farm, in Burlington,
led to the unionization of the
farm’s 500 workers by Familias
Unidas por la Justicia in 2016, a
local independent farmworker
union formed in 2013.
Familias Unidas and Co-
lumbia Legal Services were
both involved this year in labor
disputes at Sarbanand blueber-
ry farm in Sumas following the
death of an H-2A worker, ap-
parently from pre-existing con-
ditions, and later complaints
about an abusive supervisor
at W&L Orchards, in Quincy,
owned by Larson Fruit Co., in
Selah.
Keith Larson, president of
Larson Fruit, declined com-
ment on the validity of the com-
plaints but said he was happy to
address concerns and get peo-
ple working again. A supervisor
was reassigned, he said.
Familias Unidas “certainly
is trying to organize the work-
force and informally represent
a lot of workers,” DeVaney
said. It’s something the tree
fruit industry is watching, he
said.
“Most employers know you
want to treat workers well to
retain them. No one thinks they
can successfully recruit if they
abuse them,” DeVaney said.
The bigger problem, he
said, is no one wants to be short
workers when labor is scarce.
Unions often bargain for
fixed hourly wages, eliminating
piece-rate pay that many grow-
ers and workers like, he said.
“That’s a main concern.
Farms have to be flexible given
changing weather and perish-
able crops. An employer can
lose flexibility with a union
contract. Agriculture is a high-
ly uncertain environment, not a
shift-based manufacturing en-
vironment,” he said.
“Unions use political and
legal means to get rules and
regulations put in that meet
their goals. They don’t have the
interest of an industry at heart,”
said Desmond O’Rourke, a re-
tired Washington State Univer-
sity agricultural economist and
apple analyst.
Familias Unidas could not
be reached for comment.
Mechanization costs
An unintended consequence
of unionization and more gov-
ernment regulations is they
push employers to seek greater
mechanization at the expense
of jobs, DeVaney said.
“If you drive the cost of
labor up too fast, you provide
incentive for automation,” he
said. “It’s not a threat but a ra-
tional response.”
Tree fruit cultivation and
harvest is labor-intensive, but
more growers are turning to
pruning machines called hedg-
ers, run off the sides of tractors
to reduce the hand pruning of
fruit trees.
Automated Ag Systems,
in Moses Lake, builds hedg-
ers. Its pruning and harvest
assist platform, called Bandit
Xpress, also replaces ladders
for 35 percent more efficiency
in picking apples. The com-
pany sold 450 Bandit Xpress
platforms from 2013 through
2016 and is building 275 this
year. The company will dou-
ble its manufacturing capacity
next year. The self-propelled
platforms sell for $63,000
apiece.
Companies in California
and Israel are working toward
the commercialization of robot-
ic apple pickers within the next
year or two. Neither has set
suggested retail prices.
Improvements in computer-
ized, optical fruit defect sorters
and sizers and robotic palletiz-
ers are eliminating more pack-
ing house jobs in new packing
lines that cost tens of millions
of dollars each.
Stemilt
Growers,
of
Wenatchee, is building what
will likely be the largest and
most advanced automated
packed fruit storage and ship-
ping centers in the state. The
479,000-square-foot facility
will be able to store almost 1
million packed boxes of fruit.
The Automated Storage and
Retrieval System — known by
the initials ASRS — involves
movement, storage and re-
trieval for shipping of packed
boxes of tree fruit with robotic
cranes and automated dollies
and computerized tracking for
efficient flow.
In 2013, several cold stor-
age industry organizations es-
timated an ASRS system saves
$2.7 million per year for a plant
with 18 workers for each of
three shifts and each employee
costing about $50,000 in wag-
es, benefits and training.
New conventional storage
costs about $115 per square
foot and ASRS systems about
$170 per square foot, according
to cold storage organizations.
Stemilt won’t say how much
it’s spending on the system, but
using those estimates it’s likely
to be $80 million or more.
Worries intensify
Washington growers have
long dominated U.S. apple pro-
duction and are increasingly
recognized worldwide for their
high-quality apples. But they’re
not the lowest-cost producers,
DeVaney said.
“We’ve always produced
quality and people pay for qual-
ity but they won’t necessarily
pay an unlimited amount,” he
said.
“We can’t have a price
shock that puts us out of the
running. The industry is very
concerned about a sudden poli-
cy change or court decision that
drastically changes the land-
scape,” he said.
The industry is giving a $32
million endowment to Wash-
ington State University over
eight years for research to re-
main a high-quality and effi-
cient tree fruit producer, DeV-
aney said.
Modeling system depicts basin in 160,000 polygons allowing researchers to layer in variables
WATER from Page 1
Efforts to use more of
the water stored in reser-
voirs behind 13 dams in the
basin will be limited by the
expense of pumping it. That
is, it might not be worth the
cost unless the water is go-
ing to high-value crops such
as nurseries or perhaps vine-
yards.
The Willamette Water
2100 project involved six
years of work by 30 research-
ers in a variety of specialties.
The idea was to create a
computer modeling system
that could project the impact
of climate, population,
urban growth and other
factors on water supply and
demand. The result is a case
study of an important and rel-
atively large river basin – the
Willamette is 186 miles long,
the 19th largest river in the
U.S., and flows through an
area in which 70 percent of
Oregon’s population lives.
The work could be useful
to make projections in oth-
er river basins, “Especially
ones with less water,” said
Bill Jaeger, an OSU applied
economics professor and a
lead author on the project.
The modeling system de-
picts the basin in 160,000
polygons that allowed re-
searchers to layer in variables
such as existing water rights,
crop choices, soil types, pre-
cipitation and temperature.
Jaeger said he doesn’t know
of another study in the world
that’s allowed such modeling
detail.
The work yielded some
surprises, he said.
Researchers realized ear-
ly on that the state inventory
of irrigation water rights and
the amount of irrigated acre-
age didn’t match up. In any
given year, about one-third of
the water rights weren’t used
for various reasons, Jaeger
said.
In addition, some large wa-
ter rights exist on paper but ha-
ven’t been exercised for years.
For example, Willamette Val-
ley lumber mills often had
water rights they used to float
logs in canals or ponds, but
the mills have since closed or
use other methods of moving
timber.
Cities are major water
users and the model proj-
ects that the municipal water
rights they rely on may reach
capacity in 30 years for the
Portland area and in 60 years
for Salem.