Editor’s Note: This is the latest in a series that explores the shifting economic landscape of the specialty crop industry.
USDA estimates that labor accounts for about 40% of specialty crop production costs on average. For some growers, that cost is much, much higher.
In fact, the Northwest Horticulture Council surveyed its members, and growers reported labor costs ate up 70% of net returns in 2022 — but that figure jumped to 108% in 2023 and 110% in 2024. In comparison, only 37% of growers’ net returns went to labor in 2013.
“It really did prove that 2023 was not an anomaly,” says Kate Tynan, senior vice president of the Northwest Horticulture Council. “This is the trend.”
How Labor Costs Are Outpacing Grower Revenue
To survive, growers have relied on gross revenue insurance, cash reserves, land equity and lines of credit. Mark Powers, president of the Northwest Horticulture Council, notes that both lines of credit and private equity have severely tightened, forcing some growers to lease or sell their land.
“All of those are not indefinite solutions,” says Jon DeVaney, president of the Washington State Tree Fruit Association. “They are shorter-term survival strategies, and the hope has been that things will turn around and improve. Thus far, they have not significantly improved.”
The data on growers’ net returns is difficult to see, especially given that Washington ranks No. 1 for high-value crops but ranks last in take-home pay. That contrast of being the most productive fruit region in the world while its growers are at a net-negative is not necessarily just confined to the Pacific Northwest, Powers says.
“While we now have the data to provide it for Washington apple growers, unfortunately this is a situation repeated across specialty crop sectors and geographical regions nationwide,” he says. “It’s a heartbreaking and discouraging trend for our nation’s food supply and rural communities.”
Mitchell Karstetter, co-owner of RJK Farms and a third-generation apple, cherry and pear grower in Quincy, Wash., says the financial pressure growers have is about the fundamental market imbalance they face.
“We’ve watched labor and compliance costs climb far faster than the base price of a box of cherries or apples,” he says. “Part of the disconnect is that we’re price‑takers in a global market, while our cost structure is very local and heavily influenced by state policy.”
Karstetter says it’s unfortunate that consumers don’t understand that farmgate prices don’t reflect growers’ real cost structure and that it has a significant impact.
“You end up with consolidation and lost family farms, not just leaner businesses,” he says.
Why the H-2A Visa Program Has Become Essential for Farms
The H-2A guest worker visa program has practically become the only source for ag labor. Samantha Ayoub, director of workforce and business policy for the International Fresh Produce Association, says the reality is that “there are no American workers who do these jobs.”
Out of 415,000 agricultural jobs posted for the 2025 season, only 182 domestic workers applied. Consequently, H-2A program usage has grown 185% over the last decade, with the second quarter of 2026 having 30,000 more certified positions than the previous year.
“We know this program is growing,” she says. “We know that farmers are turning to it often as a last resort. I promise that if farmers could find an American worker to do these jobs, they would much prefer it.”
Kevin Burmeister, president of Lakeshore Farms in Shelby, Mich., a fourth-generation grower of asparagus, tart cherries, sweet cherries, peaches, pears and apples, says the general public doesn’t understand just how much responsibility the grower covers utilizing the H-2A program.
While an $18.15 hourly base wage might seem manageable, employers must also cover mandated housing, strict annual inspections, utilities and all domestic and international transportation.
“When it breaks down, it’s not that $18.15 an hour that’s what’s killing us,” he says. “It’s everything added on top of that. Then actually, that worker is getting $18.15 an hour, but the farmer’s into it for $30 an hour.”
Factoring in the housing, transportation and more, the cost to a grower is about “$11,000 for one H-2A worker before they ever step foot on an American farm and work a day,” Ayoub explains.
How State Labor Laws Add to Growers’ Costs
Growers in several states throughout the country have to navigate additional state regulations on labor on top of federally mandated H-2A wage rates.
“The challenge is not any one rule in isolation; it’s a cumulative effect on the growers,” says Jason Resnick, senior vice president and general counsel for Western Growers.
Resnick points to California’s Assembly Bill 2646, which proposes raising the minimum wage for agricultural workers to $19.75 starting Jan. 1, 2027, and would automatically increase every year to keep up with the cost of living.
“Californians are already paying some of the highest wages in the country for agricultural workers,” he says.
The state has also imposed overtime restrictions on ag workers, heat prevention rules and more.
“It’s just adding another state-specific wage mandate on top of what’s already a fairly expensive and complex federal H-2A structure,” Resnick says.
Washington growers face an even more complex labor landscape: paying the highest of four different wage floors, the prevailing wage rate. The state has broad discretion over these surveys, sometimes setting vastly different pay scales for standard harvest versus color-picking gala apples in a high-density orchard.
“Considering the prevalence of piece rate within our industry, you can imagine the challenges that that creates on establishing wages that are not representative of what that grower actually is looking at for their individual orchards,” says Tynan of the Northwest Horticulture Council.
She says the new wage rates don’t go into effect until the employer receives a wage adjustment letter from the Department of Labor after the department publishes the new wage rates online. Tynan says last summer the prevailing wage increased by 5 cents per pound during cherry season, which increased the hourly take-home pay for an average worker by $3 to $4 an hour.
“We ended up in this situation last year in the middle of cherry harvest; growers had a week to completely change what rates they had to pay for certain varieties, so it’s just incredibly challenging for farmers who are trying to plan,” she says.
DeVaney says another big challenge with prevailing wage is that the rates published reflect crop conditions from the previous growing season.
“You have a lot of our crops alternate bearing, heavy crops followed by lighter crops, and so what made sense and was an incentive in one year could either be an underpayment or a gross windfall in a subsequent year,” he says.
And the prevailing wage, which incentivizes productivity, often falls in direct conflict with other state regulations.
“We have heat exposure rules that want to prioritize slowing down and being safe when you’re in summer harvest season; you are now often required to offer incentives toward rapid work and productivity under all circumstances,” he says. “So, you get a lot of conflicting messages and data lags when you have required systems like that that are based on.”
Then add in overtime laws, which complicate a harvest season with sometimes unpredictable weather conditions. For a grower that might already be sinking 110% of gross returns into labor, that grower quite often can’t afford for H-2A workers to go over 40 hours a week.
Tynan says growers often leave fruit on trees even after investing in the input costs because the cost of picking the fruit is more than the value they would get at the end.
John Hollay, president and CEO of the National Council of Agricultural Employers, says this patchwork of state, federal and local regulations often works in opposition.
“The challenge that we continue to face in agriculture is that when we make some steps forward and progress at the federal level, it can often be held back because of changes that we’re seeing at the state and local level,” he says.
How Rising Labor Costs Are Forcing Farms to Close
The prevailing wage and rising labor costs have had an immense impact on the tree fruit industry, Tynan says. Not only have growers left fruit on trees because the return on the fruit would not pay for the labor to harvest it, but other growers have opted to leave the industry entirely.
“You’re also seeing farms for sale without a buyer,” she says. “We really saw this rise in private equity investments kind of earlier out of this decade, and we started to see some of those options dry up because of these economic conditions.”
Tynan says data from USDA’s National Agricultural Statistics Service shows Washington lost 15% of tree fruit farms between 2017 and 2022 and 29% of cherry farms, with 27% of pear farms lost in Oregon. Tynan says that the economic conditions have only worsened since 2022.
“These are growers who oftentimes are farming multigenerational farms and facing these challenging times,” she says.
When a farm fails, the loss is often invisible to the public.
“It’s not like a vacant storefront on Main Street,” DeVaney explains. “That farm ground is still there, and it might have the exact same tree fruit crop on it, for example, but now it’s a different owner.”
And if that grower made that difficult decision, it’s not always well received, he explains: “You’re having to transition out of ag, and you get blamed by the neighbors for selling out for urban encroachment and other development. It’s something that you didn’t want to do, it feels like a failure and everyone treats you like you were making a selfish decision, and that’s rough.”
Powers says the unfortunate thing is that many growers feel they are no longer in control of their businesses and that the success of their business is in the hands of others.
“The margin between their net income and expenses has become too small,” he says. “The reality of being a farmer is trying to prepare for and respond to a multitude of factors outside of their control that can significantly impact their sustainability from one season to the next — whether it be weather, marketplace volatility, the price of fuel or dramatic increases to labor costs imposed in the middle of harvest.”
Most produce industry insiders say many growers see what’s happening now on the farm as being out of their control.
“You don’t want to be the one that shuts the gates and sells the ground or walks away from workers, many of whom have been working on the farm for years, if not decades,” Resnick says. “But at the end of the day, they can’t operate indefinitely at a loss. Growers can generally manage risk, but what they can’t manage is a system where the costs are dictated by the government and their prices are dictated by consolidated buyers, and their family legacy is often caught in the middle.”
New Wage Rules Offer Growers Some Relief
While there are significant challenges with ag labor, there has been a bright spot. Late last year, the Department of Labor issued an interim final rule that stabilized the Adverse Effect Wage Rate methodology, which sets the H-2A wage rate. Among the updates, growers could also classify workers in two different tiers.
As of the time of this report, the Department of Labor has not issued the final rule, though insiders expect it to follow the interim rule.
Ayoub says this change allows for growers to plan, offer true compensation structures for returning workers and even give bonuses.
“We estimated about 1.6 billion dollars in savings for farm employers every year,” Ayoub says of this AEWR relief. “When everything else is going up in costs, that is critical to farmers just trying to break even.”
Hollay says the AEWR configuration restores a real marketplace for wages. While one might assume growers would drop wages as low as possible, that’s not happening, he says. This marketplace incentivizes returning workers while allowing growers to offer an entry-level H-2A wage.
Resnick says this interim final rule offered growers something they hadn’t experienced in a while.
“The interim final rule right off the bat provided real economic relief to H-2A employers that were really getting crushed by the escalating adverse effect wage rates that were rapidly climbing much higher than wage inflation in any other sector,” he says.
Colorado, for example, had multiyear 20% increases to AEWR, says Resnick. “That’s unsustainable.”
He says that with this interim final rule, the Department of Labor recognized the additional benefits growers provide to H-2A workers through housing, transportation and more.
“The adverse compensation adjustment, in real terms, saves the employer significant dollars and helps to defray the cost of providing free housing,” he says.
The interim final rule also recognized that many farmworkers perform several tasks, and instead of assigning the highest wage, the rule looks at the task the worker performs for the majority of the time, Resnick explains.
“Farm work is naturally fluid,” he says. “Crews could be harvesting in the morning; they could be moving product and assisting with irrigation or responding to food safety issues later in the day.”
Resnick also says these changes have positively benefited grower members, adding that he saw more optimism: “This is the first time we’ve actually had some hope and some good news in so long.”
Burmeister says 90% of the crops his family grows are hand-harvested, and with tight profit margins, the previous escalating AEWR made it very hard to continue. While the minimum AEWR wage rate was around $18.15 for the 2025 growing season, this year the minimum wage rate for entry-level workers dropped to $13.78.
“For the farmer ... all of a sudden, it’s very doable,” he says. “Because we still do those same costs of the housing, the transportation, those certain things.”
The challenge, according to Burmeister, is that some workers have chosen not to return because the wage rate dropped for entry-level workers.
“I’ve typically had a lot of the same people,” he says. “This year, I lost quite a few people just for the fact of the money drops so much.”
Burmeister says his farm couldn’t operate without H-2A workers.
“We need them,” he says. “We appreciate them coming. We appreciate everything they do for us.”
Resnick says growers want to pay farmworkers well, understanding the work is difficult.
“It’s skilled work. It’s essential work. But policy has to be grounded in the economics of fresh produce,” he says.
What Growers Need From Congress to Survive
Most insiders say if input costs keep rising, operations will go out of business or move outside the U.S.
“Imports become more attractive, and family farms are forced to make decisions that have nothing to do with their ability to farm well,” Resnick says. “They’re really caught between a rock and a hard place. And California ag can survive, but not if policymakers can continue to treat farms as if they can absorb unlimited cost increases without consequences.”
Tynan says the staggering figures from Northwest Horticulture Council’s survey have clearly shown the effects of escalating labor costs, but that has started to resonate in Congress. She says what’s needed for Washington growers is legislation to codify the progress made with the interim final rule and then something to relieve the effects of the prevailing wage.
“It’s one of those things where our message had to change several years ago, from ‘Here is the cliff we are going to be going off of if nothing changed’ to ‘We have been going off this cliff for a number of years, and we’ve lost farms we’re never going to get back.’”
While it’s easy to assume an easy option is automation, DeVaney says “an unsustainable wage costs and inflation curve tends to make even imperfect automation technologies look more attractive.”
The core dilemma is that domestic growers cannot pass increased labor costs on to consumers.
“Washington state has some of the highest labor and wage standards in the country, and we’re not really rewarded in the market for being producers in states that have these requirements,” DeVaney says. “There is not really any ability for our growers then to say, ‘I will find some way to pass on my overtime or higher labor costs to my customers,’ because if they could, they would have done it years ago.”
Ayoub says mushroom growers, controlled environment agriculture and other commodities also cannot use the H-2A program, noting that “it leaves out entire swaths of just the specialty crop industry.”
“We need access for the industries that still do not have access,” she says.
Hollay says all this is why Congress must help provide the certainty and predictability that growers so desperately need. He says this means having the infrastructure in place to ensure workers arrive on time, have a realistic wage and more. While he says NCAE has been making the case for ag labor reform since 1964, momentum is on the growers’ side.
“We have the ability now, I think, more than ever, to make the economic argument of why we need these reforms and what they can do if they’re made, and what happens if they are not made,” he says.
As of this report, House Agriculture Committee Chairman Glenn “GT” Thompson has introduced the Securing Agriculture’s Workforce Act, which overhauls the H-2A guest worker program.
Hollay points to the number of farms that go out of business, the rise in imports and also that the focus on healthy eating and the Make America Health Again movement have fresh produce in a good place to advocate for real change.
“I think the pieces are aligning for us to do that,” he says.
Hollay adds that his members keep saying: “We simply can’t compete with producers over the border in Canada who are at $14 an hour or less, or in Mexico, where they’re at $20 a day [for labor].”
“We have to make the economic case of ‘What does it mean to have that grown in America stamp on it?’” Hollay says. “It means that we’ve got to keep these farmers economically viable and able to compete.
“There has never been a time, at least in my life, working in politics and working in the food industry, in which the general public had been more engaged with the conversations that the ag community focuses on,” he adds.
