Issue link: http://winesandvines.uberflip.com/i/830382
18 WINES&VINES June 2017 WINE INDUSTRY NEWS S anta Rosa, Calif.—After wor- rying about water for the past few years of drought, California grapegrowers and winer- ies are now increasingly concerned about labor. Talk and action by the Trump administration has had a chilling effect on agricultural workers, ranging from much lower border crossings by unauthorized work- ers to fear that immigration en- forcers may show up to arrest and deport even legal workers. This recent activity adds to on- going trends as the labor force grows older with insufficient re- placements entering the market. The North Bay Business Journal addressed these concerns and more at its annual Wine Confer- ence on April 28. The audience was primarily from California's North Coast, so the concerns were a bit different than they might have been at a similar meeting in Modesto, Calif. North Coast wineries pay better but are little mechanized. In fact, most Napa and Sonoma vine- yards aren't planted with mecha- nized operations in mind. That's as true of pruning, hedging, po- sitioning and suckering as it is of picking, all expensive operations by hand. The primary speaker on labor issues was Eric Pooler, vice presi- dent of winery relations for Sil- verado Investment Management Co., which manages 21,000 acres of vineyards in the North Coast and Central Coast regions of Cali- fornia as well as in Australia and New Zealand. The firm is part of Westchester Agricultural Asset Management, itself a subsidiary of TIAA-CREF, a leading financial-services pro- vider founded as Teachers Insur- ance and Annuity Association of America. TIAA manages almost $1 trillion in assets. Pooler started by admitting that the crackdown on immigrants has left his company in a tight spot. "Immigrants have dropped from 1.7 million per year to 170,000," he said. Meanwhile, deportations rose heavily under Obama, and that trend has grown even tighter under U.S. president Donald Trump. The cost of living has grown rapidly, too. "The average house in Napa rents for $2,400 per month," said Pooler. That's pro- hibitive even though average wages in Napa Valley for farm- workers already approach $15 per hour, California's future mandated minimum wage. Even so, Pooler predicts wages will rise to $20 per hour as the mini- mum wage rises and forces oth- ers to pay up. Alternative jobs in hospitality and construction are siphoning away workers, including legal ones. In addition, the workforce is aging. Pooler said, "Farmwork- ers' children aren't interested in farm work. They prefer business to picking grapes." Pooler noted that the children of one of his Latino farmworkers have moved far from agriculture. One is a public defender, and an- other manages risk investment for an insurance company. In addition, California AB 1066 will make growers pay over- time after eight hours instead of the current 10 hours for farm workers. Growers will likely cut hours or may arrange labor swaps to avoid paying overtime, which ironically could hurt farmwork- ers' earnings. Workers might prefer piece- rate payments, which would allow them to make more, though qual- ity may suffer as workers rush. Pooler notes that growers can hire workers through the H2A visa program, which provides them with a committed workforce that returns regularly, but it in- volves a costly and complex filing process. "It's a bureaucratic grid- lock," he warned. H-2A employ- ers are required to pay inbound and outbound transportation, provide free housing and meals for their workers. Of course, no one can be sure what will happen in today's con- tentious political climate, but Pooler thinks that the H2A pro- gram may be revised or replaced. He also sees more and more women in the field, saying that 30% of workers today are female, a figure that's likely to grow. One way to reduce labor issues is to offer year-round employment, a common practice in Napa Valley. The workers can help with other crops like olives, which are har- vested later than grapes, as well as tend gardens, work on landscaping or assist in the cellar. One other step that's helping to compensate for rising labor costs is increasing yields. This can result from replanting older vines with tighter spacing or improved plants or management, but it may require winemakers to accept higher yields. All said, however, mechaniza- tion looms as the largest potential labor savings, as it has in so much of U.S. industry and agriculture. "Mechanization will have a big impact in the future. You can achieve a 75% cost savings with mechanization," Pooler claimed. Fortunately, today's agricul- tural technology is constantly im- proving, and many growers and some winemakers admit that me- chanical harvesting with today's machines can deliver pristine ber- ries, eliminating the need for costly sorting in the cellar. Some growers and wineries in the North Coast already har- vest by machine, but most don't talk about it. Others will likely have to reconfigure their vine- yards—and, perhaps most diffi- cult—convince customers that machines are just as good as farmworkers, even for a $50 Napa Cabernet. The conference also consid- ered acquisitions (there aren't many mergers), imports, the strong dollar and the impact of cannabis as well as discussions of current issues by vintners Tom Klein of Rodney Strong and Dan Duckhorn, grower Andy Beckst- offer and Emma Swain, CEO of St. Supéry. —Paul Franson Grapegrowers Ponder Labor Issues as Immigration Declines NAPA VALLEY VINTNERS While hand harvesting is not the most cost-effective farming method, many North Coast wineries still use the practice for their high-value fruit. "Immigrants have dropped from 1.7 million per year to 170,000." —Eric Pooler, Silverado Investment Management Co.