I think it is time we take a look at OVERTIME. We hear so much about what a great opportunity it can be for employees. Likewise, we hear almost every employer held in fear of what it will do to their profitability. So, as in most things, the truth lies somewhere in the middle.
In modern times, overtime became a tool during FDR. The nation was struggling to survive in a world depression. The bread lines were enormous. People were desperate to find any work. No one was demanding to receive overtime. So why would FDR impose overtime on employers who were struggling to survive. The President saw that he needed to somehow get more people to have a job. He felt that if he imposed time and half after 40 hours he would encourage employers to look to employ new faces to fill those hours at the initial pay rate. In short, he was not trying to giv
e employees a benefit for working longer. Rather he was trying to get new faces off the breadlines.
Today most all hourly workers have overtime in their portfolio. My question is, what does it really do for them but limit their ability to earn beyond 40 hours? I realize I grew up on a farm. We did not ever discuss our hours or overtime. I also recall being the sole provider for my young family. I was very grateful that I was not limited to 40 hours. It would have dramatically reduced my income potential. So my question for legislators that are concerned about helping the life of hourly employees, is overtime hurting or helping? Thinking outside of the box I could argue that legislators could make the case that they should increase the overtime cap from 40 to 50. This would make it much easier for those workers to support their families if they could simply remain on their primary job longer. To find a second job is very difficult and almost always for a lower hourly wage. I know this is not a current idea but I challenge people to find the flaw in what I am asking.
Agriculture is different. This is a subject that I feel needs to be discussed but on a national stage. My challenge is that before we attack the system in agriculture we take a long creative look at how we might make New York a much better place to work and raise a family. This move alone would encourage new growth in business and attract business to New York State. That would really be a refreshing change.
A fact that no one wishes to address is in this case everyone is trying to improve the future for farm workers. While it may, on first glance, seem this is false, it is very true. Those of us in the industry know what will happen to the income opportunity for this group if this Bill passes. While good intentions are involved, it will harm the very people it wishes to help.
Overtime almost always limits the income potential for workers. While it is intended to reward the good employee, it most often limits the employee’s income potential. The end result is the employee is left with fewer dollars.
The reality is that farm employees represent a very specific skill set. Just because you increase a perk
such as overtime does not mean you will suddenly have new employees with the necessary skill set. There are only 700 players in the world with enough skill to play major league baseball. If you increase the pay there will still only be 700 players with such skills. Farm employees are in such a skill set. Supply and demand should set their income value. It has in the past and no doubt it will in the future. But it needs to be noted that to simply increase over time we will not see a new wave of citizens capable or willing to be a farm employee. Farm wages are above most retail today and yet we need to import our employees because domestic workers do not have the skill or desire to fill these jobs.
Our fear is if this bill, as drafted, is passed it will force farms to dramatically shift their product mix away from labor to mechanized crops. This would be such a culture shift it would be impossible to reverse. End result would be that not only farm employees but NYS employees working in milk plants, processing plants and other crop related tasks jobs would be gone.
NYS is an import state for farm employees. As previously noted, these employees are in short supply. They will have other opportunities to work in other states that will allow them to have the hours they desire for the time they are willing to sacrifice to be away from their homes. In short then we may very well be faced with a very high level of unfilled jobs.
I just spent two full days taking two groups around Albany. The first day they were from the Berry Industry. On the second day, they were primarily apple growers, but they had other tree fruit interests. Each group had budget items to discuss. At every one of my 30 visits we closed with a Q and A about the possibility of new legislative action on the Farm Omnibus issues. Of all the possible issues, the possibility of overtime at any level but most of all 40 hours looms high.
I am not here to cast any negatives on any sector of our industry. The reality is this as I see it. Dairy is locked in a struggle to cover overhead while they continue to out produce demand. They have no legal right to hire foreign workers like the H2A. Overnight, fruit is seeing that its traditional top four varieties are now listed in the back of their consumer’s demand. The rapid decline of demand for Macs, Cortland, Empire and Red Delicious are leaving producers with over 50% of their acreage in a less desirable demand position. Dairy and fruit are the top two categories in New York. I need not list the issues that are present in the remaining crops. Are they important? Cornell studies say apples account for 1.2 billion dollars annually. Regardless of misconceptions by too many New Yorkers, agriculture is a major economic driver we cannot afford to lose.
One quick takeaway that I think is important to mention here. In both Albany and DC we see a huge
changing of senior leadership. Albany and DC are having to adjust to a large percentage of new legislators. They are loud and they intend to quickly make their mark. Educating these new legislators is a very new challenge. They arrive, in most instances, with strong convictions. Often times their sources of information are based on perceptions from social media verses facts. So we must defuse these already strong perceptions before we can to move ahead in any discussions.
Here are two examples of what we are facing. In the Senate Veteran Committee there are only two members with any military experience. In the Assembly Agriculture Committee similarly there are only two members with any real agriculture experience. We are seeing committees making policy for us all that have no real world understanding of their respective topics. I have echoed this to you all before. If you decide to not speak, many will fill your absence that have no understanding of your world.
Regardless of what you might think you have heard or hoped for this issue will appear shortly after they complete the arduous budget debates in early April. Perception becomes reality. If you have ever been to either the legislative chambers in Albany or DC you must first pass inspection for security reasons. Trust me when I tell you the ‘weapons of misconceptions’ that are sneaking threw are very dangerous. We must make every effort to continue to be in discussions prior to these legislative floor hearings. I believe, for the most, part people wish the best for each other. Too often however we all may rush to judgment before we truly comprehend the entire topic. We have time between now and the end of this legislative session. I urge you to get involved. It is nearly impossible to get rid of bad legislation. It is often time best served to head it off before it becomes reality.
No one has a lock on tomorrow. We each can offer our most sincere educated estimate about the future. We must try to stay within our known borders and then project what could possibly happen. With total 100% certainty the political climate in Albany in 2019 will be changed. We know for certain that all three chambers now rest comfortably within one party. This makes passage of party programs significantly easier to obtain. Based upon the history of the last decade, it is safe to assume new legislation will be offered up that will significantly impact our industry. The question yet to be decided will be whether we can withstand these revolutionary changes?
The most obvious issue that will be facing NYS agriculture will it be mandated, like all other segments of labor, to pay employees on a 40-hour work week and pay time and a half? Collective bargaining is also of concern. For today let us simply look at time and a half on a commercial fruit farm. To do this we will make a few assumptions. We will assume that for this farm to maintain a credible work force that they are in the H2A program. Last year the adverse effect wage rate was $12.83. We do not know the new one but it most likely will be in the range of $13 plus. For today I will use last year’s rate. For my calculations I am going to say harvest was 10 weeks. I am going
to say the farm employed 50 workers. The average work week in harvest was 60 hours. In 2018 then that farm had a weekly hourly outlay just for harvest wages of $38,490. (60 hours X $12.83= $769.80 per employee. Now X 50 employees = $38,490 per week). This, of course, does not consider State unemployment and workers comp related costs. If we now do the same exercise at time and a half for this same farm, we see his direct costs rise to $2 shy of $900 per man per week. So, his new payroll will be up (40 hours X $12.83= $513.20 plus 20 hours at $19.25= $385). So, the new weekly pay check will be then $898.20. Same crew and not one extra bushel harvested. This farm will then have a weekly payroll of harvest employees alone of $44,910 plus other employment charges (50 employees X $898.20= $44.910).
For our simple example, Fruit Farm X has an increase of $6,420 per week ($44,910 – $38,490 = $6420). Now over 10 weeks we see an increase to harvest employees alone of $64,200. Same production.
The NYS minimum wage in 2019 is $11.10. This is $3.85 above the federal minimum wage. If you are in H2A you are paying $5.58 above the federal minimum wage. Farm wages are not by any means the lowest in the land. They greatly exceed the average small business sectors up and down main street. We need to make this point. Each farm employee creates multiple off farm jobs in NYS. Clearly NYS fruit farms cannot remain competitive if they must absorb these new estimated charges. A compromise must be reached, or we will see NYS forever altered. I remind everyone of the stark reality that once a farm operation closes its doors it never returns. Are we ready to see this radicle change in our State? Now is the time for everyone to get concerned. Currently, we have not seen the legislation we did our math homework on in this State. Today is not too late to begin a very serious debate.
I am asking each of you to rethink all the issues. As farmers, we are not immune to annual changes in weather, technology and markets. It comes as no surprise to anyone that labor availability is tied to higher wages. Agriculture in NYS is tied to a very high usage of labor. We are not an Iowa corn-based economy. As the new year arrives each of you need to educate yourself on all levels. Take advantage of educational programs such as the Becker Forum coming in January 2019. Reach out to your respective NYS legislators and have a discussion with them as to what is at stake. Support the efforts of your respective organizations that are presenting logical debates to many of these proposals. If you fail to speak, I assure you this void will be filled by voices that have no real skin in the game. Action will occur. I encourage you to be a part of it.
Today you can fly from St. Louis to LA in 4 hours. Not so long ago it took 5 months by covered wagon to make this same trip, under ideal conditions. If you had problems, Denver became your new home. Your wagon could cover, on a good day, 20 miles. It carried no more than the capacity of a modern pick-up truck. My point is obvious, I hope. Once you move ahead you never really go back. What will it be like in 50 years to grow apples in New York State? What I know for certain is that it will be very different.
I used to operate a fruit farm. I was fourth generation. At that time, we packed most of our own fruit. It was almost a daily ritual that my Father would come into the packing house to visit. The first place he always went was to the cull bin. I knew the second place with certainty! He would come to question my sanity. He would tell me that I was discarding better apples than he ever raised? What was wrong with my management skills? My Father is gone today but I never really was certain that he could accept the grading standards of those days. The truth is, each year we produce a higher quality product. It has better condition and eating ability. Our consumers have grown to see this “perfection” as the new norm.
Everything in 2018 is better than it was a few years before. ‘New” is a short-lasting piece of time.
Change is the norm in everything, not just in agriculture. We must be willing to change with the times. Markets, varieties, customer preferences last as long as the new cell phone models. To accept this, we need to be willing to constantly self-examine all aspects of our business. People will always be looking for someone else to grow their food. Gone forever are the days of populations that were self-sufficient in this task. Not so long ago the world population had more people living in urban settings than rural. In short, this means people are looking for someone else to provide the food and fiber they need to survive.
To meet this reality, we must continue to invest in all forms of research. We need to be willing to accept that change is the new norm. To resist or ignore this is a path to ruin. This means we must take long objective looks at how we both grow and market our crops. Referring back to my Father visiting my packing house, he was not comfortable with how rapidly the industry was evolving. His way of doing business had changed and was never coming back.
I have just concluded my 15th year of helping a modern fruit farm with harvest. I am very grateful for this opportunity to experience first-hand the new reality in fruit production. I think it is important if I am to be credible in representing our industry that I get my boots dirty on the ground. If I did not, I would be like my Father visiting the cull bin years ago. People will always need fruit. It is our challenge to understand their needs and then surpasstheir expectations. Those that are successful in the future will always be ten steps ahead of the pack. Embrace the challenge and support those that are willing to invest in ways to improve today. We truly are a work in progress.
Recently I was asked to appear on a three-person panel to discuss modern agriculture in a heavily agriculture-based area. The people in attendance were from all walks of the community. It was not my typical audience where I traditionally am speaking to my peers. I am not certain which side learned more that day? The other two people on my side of the panel did an excellent job of speaking to the audience. They were neither too technical not so simplistic to serve no real message. The underlying message that I took from this day was that here in the heart of agriculture, land not inner city, we were totally a mystery to these interested people.
I suppose I expected a greater appreciation of agriculture here in farm land. I did not expect those who have lived their entire life with concrete verses soil under their feet to appreciate our challenges. The group was attentive but almost in shock when hearing the individual financial, compliance and marketing challenges that farms were up against. In the end, I got the feeling they saw us as a group who had just informed them that Santa Claus was a myth. They wanted the safety of knowing their food, which was grown just down the road, was safe and CHEAP. One man came up to me at the end and stated that he really did not care about our challenges. He had more than enough of his own. He wanted his food “perfect and cheaper.”
I personally dislike when people throw statistics at me to win their point. It is fair to state that today
Americans have very little knowledge of 2018 agriculture. They all have busy days and too many distractions to really care if we are being profitable or over legislated. What they see is that apples in the retail aisle are priced in dollars per pound not pennies. They only see perfect cosmetic fruit and must assume this is simply how Mother Nature delivers it to us. Since they are all consumers they feel they have the right to address an opinion on how we farm regardless if it has any reality to their desires. For example, they wish us to deliver this cosmetically perfect fruit to them totally organic and pesticide free. They also want us to do this with the minimum use of the ten fingers we seem to feel are critical to this delivery. Life should be so simple.
I personally had hopes that the millennials would bring a new awareness to the science of modern agriculture. I had hoped that they would not be so easily swayed when the topics of GMOs and the true safety of all our food supplies grown within our borders. This does not seem to be the reality. This group wants more organic and absolutely zero GMOs. They do not wish to understand how modern agriculture techniques can reduce pesticide and fertilizer usage. They do not want to know why we need to import our labor when we have US citizens on unemployment. In short, we seem to be a group that wishes to ignore progress and continue to farm as we have for centuries. Here their “perception is reality.”
I take from this experience that we are even more in need of consumer education. Since we are all consumers we should share a common respect for the process of producing that food supply. I was wrong to assume that there was a stark difference between the people living in a rural setting verses an urban one. In fact, people living in the rural see first-hand the expensive machines going by their homes that in many instances are worth more than their homes. Hard to feel compassion for those who can afford such machines.
I feel that marketing and new opportunities to address the public need to address this reality. We each fear what we do not understand. No one likes the first day of school or the first day on a new job. We each find ways to comfort ourselves as to what is happening outside of our world. We need to invest in finding ways to make their reality based upon truth more so than perception. We need to articulate our story and not allow all the messaging to flow from uninformed sources. We live in a world that if it appears on your phone it must be true. If we wish to be understood, we must be willing to invest in the message.
Everyone who is managing a commercial apple orchard in New York State is concerned with whether they will have enough labor to harvest the new crop. I operated my family farm for over 30 years. Too often I was guilty of the concepts I will challenge you with. I know that what I am suggesting is not easy, but it may be the difference between you just surviving and seeing a profit.
To begin let me pose a question to you. Are you managing orchards that are productive but not profitable? Have the markets shifted away from these blocks? Will these blocks struggle to break even? If this is the case than you need to ask yourself why you are continuing to operate these blocks. Bushels alone do not guarantee profit. If those bushels have to be sold at a discount to move them are they doing you any good? Have newer strains found shelf space in their place? Am I having to house extra men to harvest these apples? Am I mowing, fertilizing, spraying and pruning these blocks often times more in an effort to meet color requirements? More than 100 apple varieties are grown commercially in the United States. Fifteen of those varieties represent 90% of the production.
Most of agriculture’s history enjoyed the fact that if you were able to grow a crop you could find a use for it. Distribution systems were such that you could find a “profitable” utilization for your efforts. In essence, if you grew it there would be a consumer waiting for it. Those days are gone here and globally. Today we need to farm from the shopping cart to our farm gate. They decide if they want your product. They have more choices than demand for each product. They are no longer in a consumer position to accept marginal quality.
Recently it was announced that the Gala variety has replaced the Red Delicious (dates back to 1870) as the most popular variety. Long standing varieties such as the Macintosh, that was discovered in 1811, and the Cortland, that was discovered around 1900, are understandably under great consumer challenge. Newer varieties have arrived. Consumers have diversity today in the market place. As they review and cast their vote at the checkout counters we need to take notice. They are sending us clear messages as to what they prefer. If we ignore this then we should not be surprised when our sales for older varieties decline.
I am not suggesting that any one variety is no longer profitable. I am asking each of you to evaluate your particular marketing program and react to those trends. At one time in my farm history I grew profitably over 100 acres of pears. The markets I was associated with made this a profitable venture. In the last years I was managing my farm it all changed. I was investing in removal of pears in favor of other newer apple varieties. What was once a sound program had shifted due to consumer buying trends. As I alluded to earlier, I was guilty of holding on too long as well.
In conclusion, before you expand your housing take a good look at what you are needing to harvest. If you are gearing up to harvest crops that are productive but not profitable you need to step back. We all need to shift to meet consumer demands. The entire globe is eating better. Consumers everywhere have a higher income that allows them to select what they will eat. Be certain you are striving to match those trends.
By the time you read this, assuming it does not get put on your future read pile, I will be back assisting in another harvest. I find these periods of helping with harvest vital to my staying in touch with you. Yes, I was fifth generation farm family. The truth is I suspect that no matter what your craft, if you are more than 10 years removed from active duty your true perspective is flawed. Much is the same as when I farmed but much is new.
I am a believer that if you wish to truly judge a topic it is best to experience it, if possible. A good example might be in education. If a teacher has not taught a classroom in over 10 years, I question if they understand all the baggage each child brings to class. Similarly, if a principal judges his faculty on his experiences of years teaching in the past I question his true perspective. My years of farming are a base, but I need to take off my dress shoes and lace up the work boots, in my opinion, to truly see the challenges. I am grateful for the opportunity to attempt to stay current.
If all that I have stated to this point makes sense to you than I ask you a second question. How can our elected officials make sound decisions on your behalf? They can if they have access to people who wear those work boots and make the effort to enlighten them. If the “boots on the ground” crowd decides to stay away that void is quickly filled by those who have zero feedback from the farms. In the last few years I have been very encouraged to see new faces (many times with familiar last names) stepping up to make the effort to discuss the issues when called upon. There is no substitute for living the realities of agriculture 2018.
The last view point I wish to make is that of your consumer. We need to continue to inform and share our farming experiences with our consumers. Each year most of our consumers have no contact with you, the producer. They are not your enemy but they clearly have no sense of reality of your pressures. On a daily basis I see farm vehicles drive by my home that exceed the net value of the homes they are passing. Is it any wonder the average consumer is left with the initial opinion that the farmer is doing quite well. The second startling reality that most of the American consumers has no idea how small a percentage of the Farm Bill goes to serving farms. They assume their tax dollars are helping each of you at a very high cost to their taxes.
In closing, I am making the case that each of us must make the time to discuss our issues. We also must make certain we are current on our opinions. I find today a very big question that is floated to me is on trade. Make certain you research your answers before sharing one. As I have already stated, the halls of Congress are filled with people who have never stepped one foot on a farm. Each year changes the narrative. It is essential we each keep informed and then be willing to share our opinions for the advancement of all.