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SPOILER ALERT! 2017 Industry Outlook

Trends, insight, and analysis you need to know
MS_Spoiler Alert

The year 2017 is finally here—and with it comes new ideas and old ideas made new again. If this year’s outlook can be summed up in a few phrases, they might be ‘Keep it simple,’ ‘Keep it relevant,’ and ‘Tell your story.’ But along with these adages comes a developing combination of low-tech conversation and high-tech notions that will keep the industry hopping as the year progresses.

Water & Labor
Like last year, water and labor are among the more divisive issues. Sadly, little has changed, particularly for California.

Troubled Waters
Tom Nassif, president and CEO of Western Growers Association, says his hopes that El Niño would bring significant water to the state’s northern reserves were not realized. He still paints a grim picture of conflict between farmers and environmentalists, proposed water tunnel systems, and uncertainty about who will finance future projects. “The water situation keeps getting worse rather than better,” he contends. “People are firmly entrenched in their points of view.”

There was a modicum of progress, however, in December when state senators passed a drought relief bill. Though it is only the first of many necessary steps to update California’s outdated water system, it is nonetheless a ‘win’ for agriculture and the fresh produce industry.

Technology, once again, will also play a pivotal role in helping growers do more with less. “We’re so far behind the curve, it will take a long time to make a palpable difference in the amount of water we have available. Many people will move into crops that don’t require so much water,” Nassif says, and believes some growers will even leave the country.

In terms of California labor, Nassif thinks legislation like the state’s AB 1066 bill, requiring overtime pay for agricultural workers, will have a negative effect on growers. “Our members tell us it will be more devastating than the $15 minimum wage increase.” In late November, growers were granted a reprieve—a federal judge in Texas blocked the overtime pay changes and issued a nationwide injunction on implementation.

Like those suffering from water woes, growers will turn to technology and more mechanization in the fields. “If you can’t get affordable labor, you have to automate,” states Anthony Totta, vice chairman and business and marketing consultant for FreshXperts, LLC in Lees Summit, MO. Unfortunately, he notes, today’s high-tech automation usually has a big price tag, and may drive small and mid-sized growers out of the industry.

Unexpected Results
There could, however, be a positive byproduct to the labor crunch: collaboration. “There’s going to have to be more consolidation and more strategic alliances,” Totta says. “If it means working with other growers in other regions, that’s what you do.”