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.
Labor shortages
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.
Knott says the challenge isn’t always just because there’s not enough help available. Growers sometimes underestimate the number of workers they’ll need for a season, which can cause problems quickly.
“You may think you need a certain amount, but you can get behind real quick if you don’t have the right manpower,” Knott said.
Knott said he’s able to rely on teamwork as well.
“We’re made up of more than 20 family farmers, and if I hear of any one in trouble, I’m able to call other growers and share the work to get everyone the help they need,” he said.
GAP audits challenges
Adam Watson, produce marketing specialist for the Kentucky Department of Agriculture, says that good agricultural practice audits can also cause issues for growers, especially smaller operations.
“A producer who didn’t have records could have an issue,” Watson said.
Another issue is audit costs.
For some growers in other areas, the cost of an inspection isn’t as challenging, Watson said, because travel costs for inspectors can be divided between neighboring farms where audits are concentrated. In Kentucky, this isn’t as much of an option.
“Costs have been as high as $1,200 per farm, and that’s primarily because of travel,” he said.
Watson expects these audits will cause some changes in Kentucky agriculture.
“In the next three to five years, I think we’ll see some growers get out of the wholesale business and some get larger.”
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