WENATCHEE, Wash. — Minimum wage increases over the next several years in Washington and Oregon threaten the survival of small to medium-size cherry growers, an Oregon State University economics professor says.
“It’s very difficult to establish a high-density orchard at today’s prices with the increase labor costs and make it profitable. Yes, it’s scary,” said Clark Seavert, of OSU in Corvallis. He spoke on the subject to hundreds of growers at Northcentral Washington Stone Fruit Day in Wenatchee, Jan. 17.
Washington’s minimum wage jumped 16 percent from $9.47 to $11 per hour on Jan. 1 and reaches $13.50 in 2020.
Oregon’s “standard” minimum wage for the state’s most populous counties outside of metro Portland, increased 5 percent this year from $9.75 to $10.25 per hour and reaches $13.50 in 2022. The wage in Oregon’s 18 nonurban counties is $10, and will increase to $12.50 by 2022. The wage in the Portland metro area is $11.25 and will increase to $14.75 by 2022.
In Washington, that’s $1,000 more per acre in labor by 2020 which on a 200-acre cherry orchard is $200,000 more per year and “that’s huge,” Seavert said.
If you figure annual 3 percent increases after 2020, it’s an additional $20,000 per acre for labor over 20 years, he said.
To stay competitive in short labor markets, growers will be forced to give the same rate increases to all workers, including those on piece rate or making more than minimum wage for their positions, Seavert said.
Small to medium-size growers will be hit harder than large growers, he said. Apple and pear growers will be impacted as well, but he hasn’t analyzed that yet, he said.
It means growers will be driven into mechanization faster. But while Michigan tart cherries are mostly picked by shaker machine, no such device has been adequately developed for sweet cherries, Seavert said.
Ultra-high density plantings of higher-return, newer varieties and aimed at early high yield will make a profit but regular high-density and low-density orchards most likely won’t, he said. There still are growers planting low-density orchards, he said.
Seavert has developed new online models to help growers analyze capital investments, profitability, leases, and climate change. They should be fully operational in a few months, at www.agbizlogic.com, to help growers next winter, he said. Growers will be able to chose among up to 14 weather variables to run scenarios on how climate change could impact their returns, he said.
Lynn Long, OSU Extension horticulture professor in The Dalles, told growers pedestrian orchards can help counter rising labor costs and labor shortages.
Trees are kept short so pruning and picking can be done from the ground without ladders or platforms. The drawback is losing several vertical feet of growing space.
But keeping pickers on the ground increases productivity from 100 to 170 pounds per hour, Long said. A grower in The Dalles cut his labor force in half by using a pedestrian orchard, he said. Others have said their picking productivity increased three times, he said.