Rising wages test targeted grazing sector

By Caleb Hampton

Sheep and goats, deployed to graze flammable vegetation in targeted areas, have become a key part of California’s efforts to reduce wildfire fuels and prevent future infernos like those that have devastated parts of the state during the past decade. 

The California Department of Forestry and Fire Protection has in recent years awarded millions of dollars in wildfire prevention grants for projects involving targeted grazing. By acreage, the practice ranks third in the state’s wildfire resilience activities, trailing only mechanical fuels reduction and prescribed fire, and outpacing tree planting and timber harvest, according to the California Wildfire and Forest Resilience Task Force.

But California’s targeted grazing sector, which depends on a viable sheep and goat ranching industry, may be in jeopardy due to a steep rise in the minimum wage ranchers must pay the herders who look after their animals around the clock. 

Since 2019, that wage has more than doubled. Meanwhile, from 2022 to 2024, California’s sheep inventory declined 13%, compared to a national decline of 3%, according to data from the U.S. Department of Agriculture. 

“It’s just become untenable,” Andrée Soares, president of Star Creek Land Stewards in Merced County, said of the skyrocketing herder wages.  

The rising wages are the result of a combination of state labor laws and regulations applied recently to herders. The workers, almost all of whom are hired from Peru through the H-2A guestworker program, typically live out of mobile trailers and stay with their herds 24 hours a day, seven days a week, tending to them on an on-call basis. Herders look after the animals, providing water and looking out for predators. They also take care of guard dogs and move fences, but otherwise spend much of their time on standby.

Historically, herders were exempted from overtime laws and paid a minimum monthly wage. But in 2016, California adopted Assembly Bill 1066, entitling farmworkers to overtime pay when they work more than 8 hours a day or 40 hours a week. In 2019, when AB 1066 began to be phased in, state regulators determined the law—which applied to anyone employed in an agricultural profession—overrode herders’ longstanding overtime exemption. 

Ranchers can still opt to pay a monthly wage set by the California Department of Industrial Relations. The formula used to compute that rate, however, is now tied to both the state’s minimum wage, which has increased yearly since 2017, and to the overtime law that was phased in from 2019 to this year.  

As a result, the monthly wage for sheep and goat herders in California increased from $2,189 in 2019 to $4,820 this year, with employers also required to provide food and housing. The federal minimum monthly wage for H-2A herders this year is $2,058. 

Separately, a bureaucratic oversight could disqualify goat herders—but not sheep herders—from the monthly wage option, causing their minimum pay to soar to more than $15,000 a month if a legislative fix is not passed this year.

“It’s blown a hole in our business,” said Dan Hay, who has raised sheep in Kern County for 50 years. “It’s been terrible.”

Hay and other ranchers have done their best to adapt. 

The Kern County rancher laid off one of his herders. To keep his business afloat, he asked the remaining herders to take on more responsibility. 

“The wage increase took most of the margin out of the business,” he said. “I’m trying to mitigate it by running more sheep with fewer guys.”

Sheep ranchers typically move their animals to graze on pasture around the state on a seasonal basis and bring them back to a home ranch each year for lambing.

Soares, the Merced County rancher, said she has begun breeding fewer sheep so that she can send her herders back to Peru earlier than she used to each year to save on labor costs. She said she is doing whatever she can “to reduce labor as soon as our season changes come fall,” adding that it cuts into her business either way. 

“If I’m reducing the number of animals I am raising every year, that means there are fewer animals that I have to sell,” she said.

Soares and Hay said they don’t know if they will break even this year. 

Soares said the family-run business gets about 60% of its income from targeted grazing and the rest from selling meat and wool. 

Initially, Soares was able to pass along some of the wage increases to her grazing clients, which include government agencies and private landowners. But even for local grazing contracts, there’s a limit to what she can charge. “I feel like we’ve reached the threshold,” she said. 

When it comes to selling meat and wool into a global market, “we are price takers, period,” Soares said. 

With just one major lamb processing facility in California, most of the state’s lambs raised for meat are sent out of state to be slaughtered and sold. In a global marketplace, California ranchers struggle to compete primarily with imported lamb from Australia.

“We don’t have any control over that side of it,” Hay said. 

California ranchers said staying competitive in the commercial lamb sector is essential to sustaining the state’s targeted grazing business. That’s because the lamb market helps sustain a critical mass of local infrastructure and services such as trucking, shearing, supplies and veterinary care. 

“Targeted grazing can’t exist by itself,” Hay said. “You need the whole industry to make it work.”

Since 2019, California sheep and goat ranchers have cautioned that applying the overtime law to on-call herders could bankrupt the sector. 

In January, the Kern County Wool Growers Association held a press conference to raise alarm. “Unless the governor or the state Legislature intervenes, California sheep and goat producers will be forced out of business,” the group said in a statement. 

Some members of the Legislature have listened. 

State Sen. Melissa Hurtado, D-Sanger, who chairs the Senate Committee on Agriculture, met with sheep ranchers in the San Joaquin Valley earlier this year. 

In February, Hurtado introduced Senate Bill 801, which would exempt sheep and goat herders from California’s agricultural overtime law. 

Another proposed law, SB 628, authored by state Sen. Shannon Grove, would create a tax credit to offset the cost to farmers and ranchers of paying overtime wages.

That bill, which is co-sponsored by the California Farm Bureau and California Association of Winegrape Growers, would allow sheep and goat ranchers to recoup the overtime portion of herders’ wages, scaling the amount employers would be responsible for paying down from $4,820 to just less than $3,000 a month.

What constitutes a fair wage for round-the-clock herders, who often spend weeks at a time in remote locations, remains a subject of debate in California. 

The state’s inclusion of herders in the overtime wage protections enacted through AB 1066 was intended to benefit them. Ranchers say the end result may be more complicated. 

The huge pay raise hasn’t helped the herders ranchers laid off to balance their expenses, Hay said, adding that he has employed some of the same herders for more than two decades. 

“If we decide we just can’t make this work anymore, I’ll shut the whole thing down, sell the sheep, and they’ll have to go back to Peru,” he said. “That doesn’t solve any problem for anybody.”

Many of California’s sheep and goat ranches have operated for multiple generations. “These businesses are cultural and economic forces,” the KCWGA said. “Once lost, they will never be replaced.”

“They are on the verge of bankruptcy,” Hurtado said of the ranchers. “They’re literally in fear that they’re going to just go out of business and not continue to do what they’ve done for so many years.”

For some, the family ranching legacy is what has kept them going as they hold out hope for legislation that might make raising sheep and goats in California profitable again. 

“If you owned this business, you wouldn’t do this,” Hay said. “But I’ve put my lifetime into it.”

Caleb Hampton is assistant editor of Ag Alert. He may be contacted at champton@cfbf.com.