Rural California Report

By Gail Feenstra*, David Visher*, and Shermain Hardesty**

A recent study by University of California researchers examines factors that influence the development of emerging distribution networks embedded in values-based supply chains.  Included in the study are financial considerations, government regulations, industry business practices and entrepreneurial factors.  The study looks at five values-based supply chains in the California produce industry to draw out insights, best practices and conclusions.

How would US fresh fruit and vegetable producers respond to higher labor costs?  Case studies suggest that there would be labor-saving mechanization in commodities such as raisin grapes and higher prices in strawberries.  Weather is the single most important factor affecting fresh fruit and vegetable trade, but labor and transportation costs also shape trade patterns.  Affluence created a demand for fresh fruits and vegetables year-round, and new seeds and better storage enabled producers to supply commodities year round.  Rising wages can prompt labor-saving mechanization instead of rising imports.  Vegetables are far more mechanized than fruits— about 75 percent of US vegetable and melon tonnage is machine harvested, but less than half of the fruit tonnage.  There was significant interest in mechanization in the 1960s and 1970s, when the end of the Bracero program and the rise of unions led to rapid increases in farm wages.