Produce sales, employment trends react to pandemic

Issue Date: September 16, 2020
By Kevin Hecteman
A UC Davis professor says the produce business has responded “nimbly” to what she describes as “astonishing disruptions” caused by the COVID-19 pandemic.
Photo/Kathy Coatney

Six months into shelter-in-place orders spurred by the COVID-19 pandemic, food-service demand for fresh produce has stabilized—albeit at lower numbers—and the pandemic may be hastening employment trends already underway.

Professors from the University of California, Davis, College of Agriculture and Natural Resources reported on these and other trends as part of the university's "COVID-19 Conversations" webinar series.

Kristin Kiesel, a UC Davis assistant professor who researches the economics of food consumption and food policy, noted the resilience in the produce business.

"While some of the vulnerabilities in the food-supply chain will have to be addressed—and continue to have to be addressed long term in the aftermath of the pandemic—despite facing astonishing disruptions, the industry continues to pivot and respond nimbly to ensure as much fresh produce as possible reaches the consumers," she said.

Kiesel noted that pandemic sales have moved through phases—the earliest being panic buying.

"It's worth pointing out that, although produce never quite experienced the kind of surge that we saw in meat and dairy (and) dried and canned goods during this first phase, produce did increase significantly," Kiesel said, adding that after an initial spike, some commodities have leveled off.

"Some of that was on the consumer side, to really try to stock up on more shelf-stable products," she said. "Some of that also was actually some of the supply-chain challenges."

Between July 1 and Labor Day, vegetables have been selling at slightly higher levels, Kiesel said, attributing the trend to people still working from home.

On the food-service side, she said, the wild ride of the pandemic's early days appears to have subsided.

"What seems to be true right now is that the food-service demand has stabilized to a certain extent," Kiesel said, "and it has stabilized at around 70% sales volume of pre-COVID projections across all the categories."

Food service, she noted, includes restaurants and institutions, such as schools and universities; sales have been lost as campuses reopened only to close again when COVID-19 cases spiked.

"What is really clear, and what we know, is that definitely we have increased costs in the produce industry, coupled with these overall and now relatively stable quantity reductions," Kiesel said. "If we put food service and retail together, basically the California produce industry is operating at around 20% below pre-COVID projections."

Philip Martin, a UC Davis professor emeritus, said some increased costs have come from farmers buying more personal protective equipment for their employees, installing more hand-washing stations and enhancing deep cleaning.

"There's very few labor-shortage reports," Martin said, "and it's sometimes suggested that farmworkers are more likely to get COVID, if they do, away from work because they live in crowded housing."

People working in meatpacking and food processing who fall ill tend to become sick on the job, he added, and media reports often conflate the two.

"It's important to remember that a lot of reporting about COVID and farmworkers is actually talking about non-farmworkers," Martin said.

The typical farm employee in California was born in Mexico, is in his or her 40s and has children born in the U.S., Martin said.

"The main effect of COVID, when we look at the impact on California agriculture, is it's another factor increasing labor costs," he said. "The big driver, of course, has been the rising minimum wage. We're now at $13, heading for $15."

The rising employment costs will help accelerate several trends during the next five to 10 years, he added: increasing use of labor-saving mechanization, more use of the H-2A guestworker program and more fresh fruit and vegetable imports.

He predicted mechanization will be the top short-term trend.

"Machines don't get sick," Martin said. "Machines, once they get developed, can sometimes do work more cheaply. It's already true that many of the commodities produced in California that used to be labor-intensive no longer are."

Use of the H-2A visa program in California and the U.S. is up in 2020 despite the pandemic-induced spike in domestic unemployment, he said, even though he described the program as expensive.

"To employ H-2A guestworkers, a grower has to try and fail to find local workers while offering at least a so-called adverse effect wage rate, which is almost $15 in California and a little over $15 in Washington and Oregon," Martin said. "That means that an H-2A worker is going to cost more than a U.S. worker."

An employer of H-2A visa holders also is responsible for transportation to and from the employee's country of origin, as well as housing.

As to imports, Martin said these may increase in the future.

"It's important to remember that over half of U.S. fruit and over a third of the fresh vegetables are imported, and Mexico is the leading source of both fruit and vegetable imports," he said.

Timothy Beatty, a UC Davis professor, spoke about farm employees' access to social safety-net programs, such as the CalFresh food program.

"What we see is that ag workers in general do participate in the social safety net, though they participate at rates that are much lower than documented non-ag workers," Beatty said. "It may be the case that they are eligible to participate, though they choose not to, simply out of concern for being considered a public charge and therefore no longer eligible for immigration in any sort of future program."

(Kevin Hecteman is an assistant editor of Ag Alert. He may be contacted at khecteman@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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