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Show 13: Immigrant Labor Shortages and the Wine We Love

July 19, 2017

In this episode we feature the interesting story of a small vineyard owner in Lodi, CA. 

 

Jeff Perlegos sells the bounty of one of his vineyards to the huge conglomerate E&J Gallo.  Right now they produce 6 or 7 tons per acre, for a total of 117 tons of grapes.  Which sounds like a lot.

 

But it is actually less than half a percent of the grapes that go into just Gallo's Apothic label alone.


To give you a sense of scale, Gallo sells over 2 million cases of Apothic per year.  While their Barefoot brand, another Lodi heavy hitter, is the number 2 selling wine in the world shipping over 17 million cases.

 

 

But our story also dives into recent immigrant labor shortages.  It was surprising to hear that despite recent hikes in the minimum wage, it has been harder than ever for vineyard owners to find workers.

 

"It's been getting really really difficult to get labor –

and this year is the worst I've ever seen"

- Jeff Perlegos, Vineyard Owner

 

If you’ve been following the news recently you may have heard about the shortage of farmworkers.  The general consensus is that stricter immigration policies have had a real impact on stemming the tide of seasonal workers.

 

 

Because of the high cost of labor in the US, a lot of our farm exports have been concentrated in crops such as corn or wheat, that have been heavily automated.  Whereas produce and other hand-picked items have been increasingly imported.  You might have noticed Chilean blueberries sitting next to the California strawberries in your supermarket

 

 

And Mexican produce has been increasing its presence on American shelves for decades, since NAFTA was passed in 1994.  In fact, farm imports have tripled in the past decade.  And just like in America, most of their workers are migrants too - coming from the poorer regions up to places like Sinaloa to find work.

 

Here’s a recent video that Vice Media released on the conditions facing the workers down there.

 

 

Back in California – growers like Jeff Perlegos are in a bit of a crunch.  With a lack of labor supply, and constant price pressures.

 

In Napa or Sonoma, where growers might get paid $10,000 per ton, they can afford to bump up wages and attract migrant workers away from areas like Lodi.

 

Just to give you an idea of the difference, in Napa, the average ton of Cabernet grapes sells for over $6,800.  In Sonoma a ton of Cabernet commands about half the price of Napa, but still very well priced at $3000.

 

While in Lodi… a ton of the same grape is averaging right now at $650 dollars. That is less than 10% of the price in Napa.

 

I encourage readers to click the links above and inform themselves on the issue of immigrant labor shortages, which is affecting not just farm owners – but restaurant and service industries as well.  The US Economy is built in no small part on the readily available supply of immigrant labor.

 

While we of course support employment of US Citizens and job training programs, tightening immigration laws has a real impact on the ability for small business owners to conduct "business as usual".

 

 

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