Pandemic Is 'Just One More Nail in the Coffin' for Fruit Grower
Published: Friday, September 18, 2020
It's been another year of just about everything that can go wrong in farming has, except with a pandemic thrown in as a havoc-wreaking wildcard.
As a commercial produce grower in Sodus, Mich., Fred Leitz is representative of farmers battling to defend their bottom lines against long odds on multiple fronts.
There's been the same old song with bad weather, this year in the form of a bitter spring freeze that wiped out a significant portion of Letiz's apple and blueberry crop. There's the years-long competitive disadvantage American farmers face when it comes to the cost of labor and being undercut by imports.
And, did anyone mention the pandemic?
While considering the unforeseen market disruptions caused by COVID-19, Leitz wouldn't say last Wednesday that his business has been hit with the equivalent of a nuclear bomb, but did characterize the situation in only slightly less dire terms.
"I think it's just one more nail in the coffin," said Leitz. "The good news? In about six weeks, it will all be over for this year."
And then, it's on to 2021, right?
Leitz didn't verbalize the unimaginable while standing in the parking lot outside the farm's office on this unseasonably chilly early September afternoon, but, he hinted at it.
"This was kind of a make-or-break year and with COVID, I don't know what's going to happen. I hope to be back at it next year. In what form? I don't know."
Like all farmers, Leitz longs for a clean year, free of catastrophic events.
"The last really good year was 2013," Leitz said. "We had what growers call the trifecta—volume, quality and markets."
Even that silver lining tarnished in the end, however.
"I couldn't get it out of the field because I didn't have enough help," Leitz said.
His solution two years later was to amass a foreign labor force to do the work—planting, maintaining and harvesting tomatoes, cucumbers, apples and blueberries—he says Americans refuse to do even if it would keep them off of the unemployment rolls.
Leitz Farms built more than 30 housing units to accommodate 200-plus H-2A temporary workers who reside on the property during the growing season.
Over the past five years, Leitz has been able to get his product to market, but at a profit-sapping cost. While workers in Mexico doing the same type of work earn what amounts to about $9 a day, Leitz pays them just under $18 an hour when wages of $14.40 an hour, housing, visa fees, transportation and worker's compensation insurance are factored in.
"I've got $5.50 in labor for every box of product we put out," he said. "In Mexico, it's 40 cents. It's not sustainable here anymore.
"The wages that I'm paying this year are going to cost me about $400,000 more than it did last year, and every year it's gone up. I'm about $1 million in wages more than I was when I started the program in 2015, so our profitability is being eaten up that way, too."
Regarded as a national expert on farm labor, Leitz has represented farming interests as a lobbyist in Washington and his self-authored insights have been published occasionally in The Wall Street Journal and by FOX Business news.
Actions by the federal government to level the playing field, such as the North American Free Trade Agreement, which was replaced by the United States-Mexico-Canada Trade Agreement on July 1, haven't made Leitz's life any easier.
"NAFTA was supposed to bring the country up, and it didn't do it," Leitz said. "The USMCA overall? Let's see what happens. For myself, it's no different than NAFTA; for other industries, it's probably better. Why they could get higher wages for the autoworkers (in Mexico) and couldn't do it for (farmworkers), I don't know."
A seasonality clause, that would have restricted Mexico's ability to drive U.S. markets down by dumping low-priced fruit and vegetables in America during the growing season, might have helped.
"But it was thrown out at the last minute because Mexico and Canada both walked away from the negotiating table and only came back after we excluded fresh fruits and vegetables," Leitz said.
Seasonality is still being considered, just separately from USMCA.
"There were some field hearings that took place virtually in the middle-to-the-end-of August and I was involved as a testifier," Leitz said. "Everybody who testified as a grower said they can't compete and it's all because of the cost of labor in Mexico versus our labor. The administration has taken heed of that and is going to look at it real close.
"The goal is for growers like myself to make money again to be able to stay in business, and for some other growers to come back in. Consumption of fresh fruits and vegetables has gone up in the last 25 years, but the U.S. growers' share of that has gone down because of the imports that are so cheap."
Mexico's expanded highway system, opening up access to the eastern half of America, has virtually wiped out the advantage U.S. farmers held with regard to proximity to markets, Leitz added.
So far, Leitz has not been affected by Michigan Department of Health and Human Services emergency order mandating COVID-19 testing of workers. None left his employ after a federal lawsuit filed on behalf of workers, claiming they are being singled out and therefore discriminated against, lost the initial ruling and on appeal.
Workers who refuse to take the test would be required to quarantine for two weeks, but Leitz believes his workers are at little risk for contracting or spreading the disease.
"My last person on this farm came here a month ago, so we all quarantine here every day," Leitz said. "We don't go anywhere. If I was a processor or in a business where my employees went home at night, and they went to parties, and went here there and everywhere, I'd worry about it.
"But we're one big family that lives right here. When we go to the store once or twice a week, everybody's got masks and gloves on, buy their groceries, come back here and don't go anywhere else. I've already quarantined them. There are places it needs to be done and places it doesn't. Why would you want to mess with a farm like this unless there's a breakout?"
Regardless, COVID-19 has significantly altered the way Leitz Farms looks and operates on a daily basis.
"Most of the field workers have their own masks, gaiters and those kinds of things," Leitz said. "For those in the packing shed, as soon as they're walking in from their houses in the morning, they get a mask and a temperature check. The field workers get a temperature check every day or every other day."
Leitz spent about $30,000 on testing and personal protection equipment to keep his workforce healthy and on the job, but can verify that measures taken by the state to help farmers get through the crisis "do come through," he said.
Leitz Farms received a $50,000 grant from the Michigan Department of Agriculture and Rural Development to help offset unanticipated expenses incurred as a result of the pandemic and "most people who applied for it got some money," Leitz said.
Leitz is keeping an eye on what the federal government will do through its Coronavirus Food Assistance Program, which didn't cover specialty crop producers in CFAP1. During his recent visit to Milford, Agriculture Secretary Sonny Perdue said specialty crop farmers would be able to apply for relief in CFAP2, due to come out later this year.
"Institutions—the casinos, universities, schools—are buying just a little because they don't know if they're going to stay open. That's part of the problem," Leitz said. "If we can get some CFAP money, that will help because market disruptions are big."
While Michigan expects to harvest as many apples statewide as it did in 2019, the orchards in Leitz's area are facing diminished output because of the unusual arctic blast that froze budding trees throughout his region in May.
"I see apples in the trees; I don't see a lot," Leitz said. "I've got some varieties with a cluster here and a cluster there, but we can't afford to go out and harvest it. There were several blocks we didn't spray because we didn't have to because we weren't going to pick anything anyway. We kept the trees healthy and that was about it.
"Our blueberries were really hurt. We picked through some parts of them twice and about 40 percent of them weren't worth walking through once, so we just let them be. Up until about 10 years ago, we could make money. There were good years, there were bad years, there were exceptional years and there were really bad years."
Needless to say, there's never been a year like 2020 for Leitz or most other farmers.
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