The produce business is always a challenge, says Rick Gaia, sales manager for Memphis, Tenn.-based M. Palazola Produce Co. But this year fuel costs and labor shortages top the list.
The industry is feeling the effects of rising transportation costs, Gaia said, and in some cases the increased freight expenses are almost prohibitive.
“Fuel costs have gotten to the point that it can cost more to get it here than for the product itself,” he said.
Strategies to cut costs
Those extreme costs create a strong argument for using as much locally grown produce as possible, something many companies seek to do.
However, not everything is available locally and costs can still add up, so companies are seeking ways to make their operations more economical.
“We replaced some equipment this year to improve our economy,” said Kenny Pendergrass, vice president of purchasing at Dixie Produce, Inc., Chattanooga, Tenn. “We’re replacing trucks with more fuel-efficient vehicles.”
Dixie Produce is also looking over its transportation routes to see if changes can be made there, Pendergrass said.
“We’ve tried to utilize our routes the best we can and even reduced the frequency of some deliveries,” he said, both of which have had good results for the company.
The difficulty of finding reliable labor sources is also looking to be an issue for Kentucky and Tennessee growers this year, though it’s not as bad there as in other areas.
“Some of our farmers have some issues with this, but the Tennessee guys haven’t had as many problems as they’ve had in Alabama,” Pendergrass said.
Combating these shortages can require some creativity, especially for growers with farm land in both states.
“One farmer whose mailing address was in Alabama but had his farm split on the state line moved his residence to Tennessee to be declared a Tennessee farmer so he didn’t have to deal with Alabama,” Pendergrass said, referencing new government immigration regulations there.
Pendergrass also said several farmers have year-round help who stay on the farm all year and who tend to be more reliable than seasonal workers who come and go with the harvest.
“The vegetable industry is labor intensive, and in today’s day and age, growers use migrant workers. That’s getting harder and harder for growers to come up with proper help to get crops harvested,” Knott said.