The availability of labor, even in Mexico, is perennial challenge.
With the Mexican economy on an upswing, workers have more opportunities, and growers find themselves hard pressed to find skilled laborers. Most Nogales, AZ, importers expect the situation to continue this year.
Jerry Havel, Fresh Farms’ director of sales and marketing, said the labor shortage in Mexico has been an issue in the last couple of years and seems to be getting worse. “It’s not severe yet, but we do have to scramble.”
One way to prevent such scrambling is to use technology whenever possible.
“Managing people within our industry is probably one of the single-hardest parts of being in this industry,” said Matt Mandel, vice president of operations at SunFed.
“You can reliably know that a plant — when given the right amount of water, sunshine, and fertilizers — is going to grow more or less in a certain way, but labor is always a question mark.” So, he notes, any type of technology to augment processes “makes what is already a somewhat variable process less variable.”
Trucking remains another front on which the industry is challenged, what with changing regulations and too few drivers.
As costs have gone up, Guillermo Martinez, general manager at Wilson Produce, LLC, is seeing more maneuvering from customers to deal with the logistics.
“It changes the way a customer arranges their own operations, and how they deal with their vendor base,” he said.
For example, a customer who might previously have asked for produce to be shipped to a consolidation point in Texas might now ask for delivery into Utah or Colorado.
Alex Madrigal, president of Covilli Brand Organics, Inc., said, “There’s been an increase in rates, even to Los Angeles from Nogales, which is a pretty standard route. I think it’s going to be a continuing issue, one we’ll have to partner with providers pretty closely to solve.”
“The industry as a whole has experienced difficulties due to new regulations set forth by the U.S. Department of Transportation,” said Christian H. Rivas, managing member of C.H. Rivas, LLC.
“Though the purpose of these new regulations is the safety of everyone, they’ve created a new cost for customers accustomed to loading at multiple locations. These costs include layover fees, multiple pick fees, reload fees (if a truck was loaded incorrectly with weight distribution), and after-hours fees.”
Raquel Espinoza, director for sales and marketing for Produce House, LLC, believes the trucking issue has gotten more under control following a backlash from the industry as trucking prices became exorbitant.
“Sometimes it’s about the pricing resonating and settling in before people get used to the fact that there’s going to be higher pricing,” she said.
“But the higher pricing affects all of us in a lot of different ways. We know our costs for distribution are also going up because labor costs are going up. In the end, it comes down to consumers seeing higher prices.”
This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full supplement.
