Labor was one of the few bargains for growers in 2011.
The USDA just published the 2011 Farm Production Expenditures annual report.
The executive summary notes 2011 total expenditures rose 10.2% compared with 2010. The USDA said all expenditure items except labor and interest rose compared with the previous year.
Relative to labor, the report showed the wide disparity in labor costs in the Midwest compared with Western states. For example, labor accounted for just 3.5% of the total expenditures of a farm in Nebraska, but 24.5% of total expenditures in California and 20.1% in Washington state.
And the cost of labor didn't escalate like diesel (up 23%) and fertilizer (up 20%). In fact, labor costs declined in the U.S., from a reported $27.3 billion in 2010 to $26.8 billion in 2011.
In California, the USDA reported that labor expenses declined from 26.5% of all expenses in 2010 to 24.5% in 2011. Labor expenditures in 2011 were $7.63 billion, down from $8.02 billion in 2010. For Washington state, labor accounted for $1.37 billion in 2011, down from $1.43 billion in 2010.
For the U.S. as a whole, labor accounted for 8.4% of farm expenditures in 2011, down from 9.4% in 2010.
TK: I'm curious if fruit and vegetable grower-shippers see the ring of truth in this USDA report. Is the declining cost of labor for 2011 reflected in your balance sheet?