Stanislaus County Farm Bureau's Anna Genasci and JCS Marketing's Kristin Platts sit down with Norm Groot, executive director of the Monterey County Farm Bureau, to discuss a recent Cal Poly study they commissioned to examine the true cost of regulatory compliance for California growers. Groot breaks down key findings from the report, putting real numbers behind the growing burden of compliance in the ag industry.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Why wait until September to earn your CEUs?
Register now for the twentytwenty five Crop Consultant
Conference and start earningexclusive early access CEUs on
April 1. Each month a new expertled session unlocks covering key
industry insights, regulatoryupdates, and agronomics
strategies. Join us in Visalia,the heart of California
agriculture on September 2025for two days of learning,
(00:26):
networking, and innovation. Thisconference is your one stop
destination to earn all the CEUsyou need.
No need to go anywhere else.Register today at
ProgressiveCrop.com/conferenceand start earning CEUs now.
Speaker 2 (00:40):
As a disclaimer, views expressed in interviews
are solely those of theindividuals and do not
necessarily represent those ofMy Ag Life, JCS Marketing, and
its employees.
Speaker 3 (00:52):
This is Kristen. And this is Anna.
Speaker 4 (00:54):
And this is Farm Bureau Friday. Hi, and welcome
(01:17):
to another episode of FarmBureau Friday. I'm Kristen
Platts with JCS Marketing andMiAg Life.
Speaker 3 (01:22):
And Anna Janacee with Stanislaus County Farm Bureau.
Speaker 4 (01:25):
And we're here with Norm Groot. He's the executive
director for Monterey CountyFarm Bureau.
Speaker 3 (01:30):
So thanks for joining us this morning, Norm. Before we
jump into today's topic, whichis cost of compliance, the ever
increasing cost of compliancefor our ag industry, can you
just introduce yourself, yourrole with Farm Bureau in
Monterey County?
Speaker 5 (01:46):
Sure. I've been the executive director here for Mar
Monterey County Farm Bureau forjust about fourteen and a half
years now. My prior Farm Bureauexperience was as a volunteer. I
started in Orange County ontheir board many decades ago and
ended up being a districtdirector for Los Angeles and
(02:08):
Orange County on the state boardfor thirteen years. And so this
was a natural step to move intoan agricultural oriented
community and really make myfootprint here very important to
keep this agricultural communitymoving forward, and particularly
when it comes to regularsregulates regulatory programs,
(02:29):
everything that's involvedthere.
It's great to be that voice ofagriculture here.
Speaker 4 (02:34):
Great. Norm, today, we are talking about your
regulatory compliance cost studythat you guys had conducted
recently. Can you just walk usthrough that report? When was it
created, and what led to itbeing commissioned?
Speaker 5 (02:48):
Sure. This really goes back to 02/2006 when we had
some concerns about how waterquality regulations, the
irrigated lands regulatoryprogram, was going to impact the
cost of production here on theCentral Coast and particularly
for leafy greens and vegetablegrowers. And so they did a study
(03:08):
and found some significantamounts, but it was just the
genesis of that irrigated landsprogram. And really as we move
through the differentiterations, we realized that
there's other regulatoryprograms that impact costs as
well as the water qualityregulations. And so 2017, we did
(03:28):
an update.
We figured that was a gooddecade to see how regulatory
cost compliance had expanded,and we found that it was 795%
more in that one decade alone.Looking at it last year, our
board was concerned that notonly do we have another
(03:48):
iteration of our irrigated landsregulatory program, but we're
looking at air quality issues,food safety, labor, particularly
wages, of course, but alsohealth and safety, ag chemical
use, and the permitting that'sgoing on there. And so we
decided now's a good time to doanother update even if it isn't
a decade. And, unfortunately,what we found is that we had
(04:11):
another 64% increase inregulatory costs just in those
intervening eight years, and,really, that brings the total
cost of regulatory compliancefor a Central Coast Grower to
$1,600 per acre. That's a prettyastounding amount.
When people start wondering whythe price of their leafy greens
(04:32):
and vegetables and otherproducts are going up, not just
here from the Central Coast, butthroughout California. The
regulatory climate that we haveis really inducing a lot more of
costs in the production of thoseitems.
Speaker 4 (04:46):
Can you tell us who compiled the report?
Speaker 5 (04:48):
Sure. It was done by Cal Poly, San Luis Obispo. The
two professors that did theinitial study in 02/2006 are
still with us, and they did the2017 as well the 2024 updates.
They had the system in process,so it was easy for them to step
back into this and really updatetheir numbers, going to the same
(05:09):
growers using the same data setsand trying to update those. And
so we are very fortunate that wehave that consistency that those
two professors are available tous to update the study and not
have to basically start fromscratch all over again.
So they understood themethodology. They understand
agriculture, and they were veryproactive and very excited to
(05:31):
actually do this update.
Speaker 3 (05:33):
Norm, I think it's important, and you touched on
this. So you guys initially werelooking at the irrigated lands
program and water regulatorycosts. Right? But as you move
forward with report, youexpanded into air quality,
labor. So not just talking aboutthe increased minimum wage and
the elimination of a ten hourworkday in agriculture, but also
(05:57):
just real calocea safety.
Can you speak to some of thoseother regulatory entities and
how those are impacting yourgrowers locally?
Speaker 5 (06:06):
Sure. I think the obvious one that that everyone
knows about is the cost of laborhere in California with the
minimum wage increasing as wellas the change to the overtime
rules. Those were dramaticallyincreased in the last eight
years essentially. And what wefound is those went up a 25%.
That was the leading, I guess,factor in this most recent
(06:28):
report that indicated that we'rereally dramatically increasing
the cost of doing business inCalifornia in the agricultural
sector.
We also found that labor healthand safety also increased up to
52% more in that eight yearperiod. And so when you combine
those two factors together,labor really becomes the
(06:49):
overriding concern of wherewe're going in California and
how we can afford to continuedoing what we're doing in
agriculture. And here in theSalinas Valley and in Central
Coast with the crops that wegrow here, we do need those
hands to harvest our crops. Andso we don't have that option of
going to some sort of mechanicalharvesting yet. Even though
(07:12):
there's a lot of research and alot of dollars being thrown at
that right now, we don't havethose solutions that are
financially viable.
When you look at one of theother ones that probably people
don't realize or understand asmuch as air quality regulations
and how those impact not onlywhat we do on the farm with our
stationary equipment, but nowmoving into farm equipment that
(07:33):
is mobile as well as what we'reusing to transport our products
either from the field to themarket or the field to the
cooling facility and then to theprocessors. With that, we saw
56% increase in the last eightyears. And so you you're seeing
a trend here. These numbers andpercentages are pretty darn
large now, and they areoverriding the fact that now
(07:55):
it's over 10% of our costs ofinput are regulatory costs here
in California. And to be exact,it's about 12 and a half percent
now.
So when you start thinking abouthow we're producing our crops
here and realizing that thefarmer is not getting a recovery
of those costs in the marketprice that he is selling the
(08:16):
product for, it hits the bottomline pretty hard. And so that
makes it all the much tougherfor our small farmers to really
remain financially viable fromyear to year.
Speaker 3 (08:27):
So I have a quick follow-up question to that,
Norm. I think it's reallyimportant for folks to
understand while this report wascommissioned by Monterey County,
these trends are impactingCalifornia growers. It's not
specific to Monterey Producers.But what are you all doing, or
what are you hoping to do withthis data that you have
(08:47):
solidified now? Like, how areyou using it as an advocacy and
agricultural literacy tool?
Speaker 5 (08:53):
Well, we are providing it to the elected
officials who are making thosenew laws that create these new
regulatory programs, and we'rewatching closely where we can
insert this into theconversations for new laws that
they're developing this year,which there are already several
that we're having thatconversation on. But moreover,
with the regulatory agenciesthemselves, helping them to
(09:16):
understand that everything thatthey do has a cost. And for
example, when we went throughour last iteration of the
irrigated lands program here,they really didn't look at the
economics of what they weredoing to agriculture with all
these new requirements, whetherit's the gathering of data from
points in the field, how theyhave to report it, understanding
(09:38):
the calculations that arerequired when they're reporting.
Those all come into the aspectof the regulatory costs. And so
I think it's more important thatwe get this out in front of the
regulators so that theyunderstand when they're
proposing changes to programs ornew programs that these have
financial impacts toagriculture.
(09:58):
And so we are having thosediscussions. I think one of the
elements that we found in thereport too is that there's a new
cost of education and trainingwithin agricultural companies to
keep up with all thesecompliance requirements. Whether
it's the reporting or whetherit's the data gathering, there's
a lot of education that has totake place. And unfortunately, a
(10:20):
lot of those programs changefrom year to year. And so that
is really a dynamic that we areseeing that farming operations
as well as ranching operationsand the processors have to keep
up with those changes.
And right now, that pencils outat about 25 and a half dollars
per acre. So when you startadding all of these costs per
acre up and we come to that$1,600 number here on the
(10:44):
Central Coast, we can translatethat easily to a lot of the
other crops that are beingproduced in California simply
because we all more or less workunder the same regulatory
scheme.
Speaker 3 (10:55):
So I'm stepping on Kristen really quick. One of the
things that I've seen recentlycome out of California Farm
Bureau, and they are noting someof your numbers, is the Brian
the project that Brian Little isworking on right now to provide
a tax cut opportunity forproducers who are paying
overtime. So hopefully, fingerscrossed, that'll be one area
(11:18):
where we can see a little bit ofbreathing room. But as we know
in California, though, therewill be no rolling back of any
sort of regulatory change.
Speaker 5 (11:27):
Yeah. And I think that's an important discussion
that we need to have, and Ithink the tax roll break for
overtime costs may have asignificant impact. It just
depends on how it is implementedand the rules around it and how
quickly payroll systems can bemodified to actually make that
deduction when they're payingthe taxes that that employees
(11:50):
are collect or they're collectedfrom the employees. So I think
there's a lot of answers therethat need to be forthcoming in
how that mechanically is goingto work and hopefully not
another additional burden forfarms to calculate that and
determine how that's going towork. But there is an
opportunity there.
But you're right. I think we'rein a regulatory system right now
(12:12):
where we really don't see thoserollbacks, and every layer
that's added on additionallybecomes a cost just like what we
saw on this report.
Speaker 4 (12:21):
Annie, you covered something that I was gonna ask.
But, Norm, you talked a lotabout the $1,600 an acre, all
the things that that roll intothat. Were there any other parts
of the report that you werereally surprised by, or is there
any piece of it that deeplyconcerns you that you might
wanna dive deeper into rightnow?
Speaker 5 (12:40):
Well, I think the one area I would say that surprised
me is actually a positive isthat we're not seeing escalating
costs for food safetyrequirements. I think we pretty
much got that down in what we'reproducing here with leafy greens
and fresh vegetables, and we areactually the leading area for
food safety related to the leafygreens marketing agreement. And
(13:01):
people have been doing that fora while. So we did not see as
dramatic a leap in those costswhere other areas, as I've
noted, went up substantially. Somaybe that's leveling off a
little bit, but that's still oneof the primary concerns that we
have for our food supply ismaintaining that food safety
element and continuing todevelop new practices as the
(13:25):
science either directs us orproves that something needs to
be improved or changed.
That was a relief, I think. Weare all expecting a lot more
from the food safety elementsthat people have to do, and it
is a pretty costly per acrewhere we're looking at $244 per
acre maybe on an average forfood safety requirements, but
(13:47):
that is relatively a lowerpercentage than what we saw for
a lot of the other areas ofregulatory concern, particularly
the labor and labor health andsafety areas.
Speaker 3 (13:59):
That's interesting. I think it's important to note,
Norm, Correct me if I'm wrong,and this kinda leads into our
next question. But the marketingagreement around leafy greens,
that was something that growersdid proactively. Right?
Speaker 5 (14:10):
Yes. That was what the industry took on themselves
rather than allowing theregulators to dictate what we
should be doing. We knew betterhow to solve those problems and
develop the leafy greensmarketing agreement in
cooperation with growers as wellas the processors and the
transportation sector to reallymake sure that we're we're
(14:30):
touching all parts of the supplychain as the product moves
through it. We are the epicenterof this, and I think many across
the country are now wonderingwhy they are having to do the
same thing. And really, it's forthe benefit of our food supply
in general, to make sure that weare producing a product that is
the most safe in the world, aswe call it.
(14:52):
But, yes, we are the epicenterof food safety, and that is, I
think, primarily one of thebigger choices that the
operations have to make is howthey handle their food safety
practices. And unfortunately, ithas become a huge liability
issue too if something isrecalled, that they have to
manage that process also. And sothere's a lot of back end
(15:14):
practices that have to beobserved at the same time. So it
is all encompassing, and I thinkmost operations here would say
food safety is their primaryconcern when they're harvesting
product and putting it into thesupply chain.
Speaker 3 (15:28):
So, Norm, I do wanna maybe take us down a route of
hopefully a more positive notethan additional regulatory cost.
It's it seems we have the moststrict rules in regards to
agricultural production anywhereelse in The United States, and I
would argue anywhere else in theworld. How can we switch the
(15:50):
narrative rather than saying, ohmy lands, we have to comply with
all this stuff. Is there anopportunity for us as California
growers to market our productsas you just said it, the most
safe in the world and get apremium for that. Do you see
that opportunity?
Speaker 5 (16:06):
I think it starts with telling our story. I think
we need to tell a better storyas we go along, and it can't
just be me, a talking head, soto speak. It has to be the
growers themselves putting thatforth into the public domain, so
to speak. So first of all, Ithink we need to tell our story
better. And second, I think wehave a good story to tell.
(16:27):
We just need to figure out howto get that into the public
domain, and most of thatprobably would need to go
through social media. And we allknow social media has its
pitfalls and can easily turnaround into a war of words with
those who disagree. We have tobe very careful about how we
approach that. We've oftentalked about how we could manage
(16:49):
that as a overall brand, likeSalinas Valley Produce is the
safest in the world, which weall realize is probably very
true statement, but it is notreally out in the public domain,
partly because we have so manyfood safety recalls that are
precautionary and notnecessarily a threat to the food
(17:11):
supply. As the science evolvesand the testing evolves, we're
testing for parts for billionnow.
That makes the science all thatmore complicated, and so the
precautionary recalls are muchmore in the public domain, and
that's what people see. And theydon't necessarily relate that to
the science of how we'rediscovering those situations. So
(17:32):
I think there's a great storythat we can tell, and hopefully,
we can make that something as apride of California product,
whether it's lettuce, whetherit's peaches, whether it's
avocados, whatever the case maybe. I think there is an
opportunity to do that, buteveryone has to realize too that
comes with a cost of production,and that they will be paying for
(17:53):
that hopefully at the consumerlevel. And that's something
we're not seeing right now.
And that's one of the thingsthat this report pointed out is
that in those eight years from2017, the price of lettuce has
actually only increased at thewholesale level by less than 1%.
The dollars are not recoveringthe costs of doing all these
(18:14):
great things for the consumersbecause the consumers are not
recognizing the value of what'sgoing into their food supply.
And, honestly, I don't think theaverage consumer understands
that a lot of their product isgrown in The United States. But
it also comes from othercountries, particularly South of
us. So I think that's somethingthe consumer needs to be more
(18:35):
aware of as they look atproducts in the supermarket.
We can't have peaches twentyfour seven, three 60 five
because that just isn't theseason here. So they must come
from someplace else. So I thinkthere is a good story to tell.
We just need to figure out howto get it out there.
Speaker 3 (18:50):
It's funny that you say that, Norma. I used to feel
very passionately about peopleunderstanding where their food
comes from. And as I spent moreand more time in our industry,
in particular, my relationshipnow with Farm Bureau, it's such
a and you mentioned this, thedata, the science. It's such a
scientific operation that ourproducers are doing. It really
(19:11):
is hard to articulate what it isthat they're doing.
And so I've changed my narrativenow to, I I want consumers to
have an appreciation for ourfarmers, ranchers, and dairy
men, and all of the things thatthey juggle day to day, year to
year in order to ensure that wehave the safest food supply in
the world on our tables. And Iagree with you. I think there's
an opportunity there. We just weneed to figure out what that
(19:33):
messaging looks like.
Speaker 5 (19:35):
Yeah. Exactly. And I think to some degree, we have
spoiled the American consumer byhaving great product. It's
almost perfect. Every time theygo into the supermarket, they
can find anything and everythingthey need $24.07, $3.65.
And so we have really spoiledthem, and we are seeing that
now. It's the lowest cost ofproduction in the or excuse me,
(19:58):
of the price of food in anywherein the world related to the
overall income level. And so weneed to figure out how to put
that value back into ourdomestic food supply and really
get the consumer to appreciatewhat we do as farmers and
ranchers to get that product tothe marketplace.
Speaker 4 (20:16):
Is there a place that people can go and see some of
this data?
Speaker 5 (20:19):
Sure. The report is available off our website, which
is MontereyCFB.co. So Montereyis in our area here, but
CountyFarmBureauCFB.co. Andthere's a link on our landing
page to the report itself thatcan be downloaded so you can
read the entire thing. And ithas a lot of good data and and a
lot of detail related to thevarious different areas of
(20:42):
regulatory compliance that theystudied as well as some things
that they decided were reallyoutside the scope that people
may have questions about.
Speaker 4 (20:51):
K. Yeah. And it might be interesting to see how it
translates across county tocounty.
Speaker 3 (20:55):
Yes. Yeah. Maybe before we wrap it up, Norm, is
there anything we're missing? Isthere anything else you'd like
our listeners to know about thereports or what you all are
doing with the data?
Speaker 5 (21:05):
I think the overall message here is it's getting
increasingly more difficult todo business in California,
whether it's agriculture,whether it's manufacturing,
whatever the case. And this justdemonstrates that with our
excessive regulatory burden thatwe have in California that
really puts us at disadvantagein some cases. It really
(21:26):
highlights the fact thatCalifornia is an expensive place
to live and work, and we are notseeing any light at the end of
the tunnel where they're tellingus they're not gonna continue
doing this. So I think we needto have that conversation with
our legislators and moreoverwith our regulators to get them
to understand that California isan important part of our food
(21:47):
supply chain, and we need tomake sure that we protect
agriculture, whether it's thesmallest barber or all the way
up to the larger farms that areproducing large quantities
simply so they can fill themarketplace. It's an important
message we need to continueputting out there.
Speaker 4 (22:04):
Well, we like to close the show with a call to
action, and I feel like thatkind of was action. I was gonna
ask you what should your call toaction be for our listeners, for
your members, in your FarmBureau, or members across Well,
Speaker 5 (22:17):
as I tell our farmer and rancher members here is
they've got to get out in frontof those legislators and those
regulators and tell them theirstory. Tell them what they do on
the farm. We invite many of themto come and take tours here
because our intensiveagricultural system here is very
unique and very different, andalso because we can do it
(22:38):
because we have water, climate,and soil that supports that type
of intensive agriculture. And soI suggest or continue to suggest
to all our farmers and ranchersthat it just can't be me putting
this message out there. It hasto be them themselves from their
experiences on the farm andranch.
Speaker 3 (22:55):
What a great way to wrap it up, Norm. Thank you for
your time this morning and, yourcommitment to Farm Bureau. And,
honestly, the I reallyappreciate that you and your
board and your team there sawthe value in putting in
investing in a report like this.
Speaker 5 (23:11):
Right. Thank you. Appreciate the time.
Speaker 4 (23:13):
Yeah. It was really nice meeting you, and thanks for
being on the show.
Speaker 5 (23:16):
Very good.
Why wait until September to earn your CEUs?
Register now for the twentytwenty five Crop Consultant
Conference and start earningexclusive early access CEUs on
April 1. Each month a new expertled session unlocks covering key
industry insights, regulatoryupdates, and agronomics
strategies. Join us in Visalia,the heart of California
agriculture on September 2025for two days of learning,
(00:26):
networking, and innovation. Thisconference is your one stop
destination to earn all the CEUsyou need.
No need to go anywhere else.Register today at
ProgressiveCrop.com/conferenceand start earning CEUs now.
Speaker 2 (00:40):
As a disclaimer, views expressed in interviews
are solely those of theindividuals and do not
necessarily represent those ofMy Ag Life, JCS Marketing, and
its employees.
Speaker 3 (00:52):
This is Kristen. And this is Anna.
Speaker 4 (00:54):
And this is Farm Bureau Friday. Hi, and welcome
(01:17):
to another episode of FarmBureau Friday. I'm Kristen
Platts with JCS Marketing andMiAg Life.
Speaker 3 (01:22):
And Anna Janacee with Stanislaus County Farm Bureau.
Speaker 4 (01:25):
And we're here with Norm Groot. He's the executive
director for Monterey CountyFarm Bureau.
Speaker 3 (01:30):
So thanks for joining us this morning, Norm. Before we
jump into today's topic, whichis cost of compliance, the ever
increasing cost of compliancefor our ag industry, can you
just introduce yourself, yourrole with Farm Bureau in
Monterey County?
Speaker 5 (01:46):
Sure. I've been the executive director here for Mar
Monterey County Farm Bureau forjust about fourteen and a half
years now. My prior Farm Bureauexperience was as a volunteer. I
started in Orange County ontheir board many decades ago and
ended up being a districtdirector for Los Angeles and
(02:08):
Orange County on the state boardfor thirteen years. And so this
was a natural step to move intoan agricultural oriented
community and really make myfootprint here very important to
keep this agricultural communitymoving forward, and particularly
when it comes to regularsregulates regulatory programs,
(02:29):
everything that's involvedthere.
It's great to be that voice ofagriculture here.
Speaker 4 (02:34):
Great. Norm, today, we are talking about your
regulatory compliance cost studythat you guys had conducted
recently. Can you just walk usthrough that report? When was it
created, and what led to itbeing commissioned?
Speaker 5 (02:48):
Sure. This really goes back to 02/2006 when we had
some concerns about how waterquality regulations, the
irrigated lands regulatoryprogram, was going to impact the
cost of production here on theCentral Coast and particularly
for leafy greens and vegetablegrowers. And so they did a study
(03:08):
and found some significantamounts, but it was just the
genesis of that irrigated landsprogram. And really as we move
through the differentiterations, we realized that
there's other regulatoryprograms that impact costs as
well as the water qualityregulations. And so 2017, we did
(03:28):
an update.
We figured that was a gooddecade to see how regulatory
cost compliance had expanded,and we found that it was 795%
more in that one decade alone.Looking at it last year, our
board was concerned that notonly do we have another
(03:48):
iteration of our irrigated landsregulatory program, but we're
looking at air quality issues,food safety, labor, particularly
wages, of course, but alsohealth and safety, ag chemical
use, and the permitting that'sgoing on there. And so we
decided now's a good time to doanother update even if it isn't
a decade. And, unfortunately,what we found is that we had
(04:11):
another 64% increase inregulatory costs just in those
intervening eight years, and,really, that brings the total
cost of regulatory compliancefor a Central Coast Grower to
$1,600 per acre. That's a prettyastounding amount.
When people start wondering whythe price of their leafy greens
(04:32):
and vegetables and otherproducts are going up, not just
here from the Central Coast, butthroughout California. The
regulatory climate that we haveis really inducing a lot more of
costs in the production of thoseitems.
Speaker 4 (04:46):
Can you tell us who compiled the report?
Speaker 5 (04:48):
Sure. It was done by Cal Poly, San Luis Obispo. The
two professors that did theinitial study in 02/2006 are
still with us, and they did the2017 as well the 2024 updates.
They had the system in process,so it was easy for them to step
back into this and really updatetheir numbers, going to the same
(05:09):
growers using the same data setsand trying to update those. And
so we are very fortunate that wehave that consistency that those
two professors are available tous to update the study and not
have to basically start fromscratch all over again.
So they understood themethodology. They understand
agriculture, and they were veryproactive and very excited to
(05:31):
actually do this update.
Speaker 3 (05:33):
Norm, I think it's important, and you touched on
this. So you guys initially werelooking at the irrigated lands
program and water regulatorycosts. Right? But as you move
forward with report, youexpanded into air quality,
labor. So not just talking aboutthe increased minimum wage and
the elimination of a ten hourworkday in agriculture, but also
(05:57):
just real calocea safety.
Can you speak to some of thoseother regulatory entities and
how those are impacting yourgrowers locally?
Speaker 5 (06:06):
Sure. I think the obvious one that that everyone
knows about is the cost of laborhere in California with the
minimum wage increasing as wellas the change to the overtime
rules. Those were dramaticallyincreased in the last eight
years essentially. And what wefound is those went up a 25%.
That was the leading, I guess,factor in this most recent
(06:28):
report that indicated that we'rereally dramatically increasing
the cost of doing business inCalifornia in the agricultural
sector.
We also found that labor healthand safety also increased up to
52% more in that eight yearperiod. And so when you combine
those two factors together,labor really becomes the
(06:49):
overriding concern of wherewe're going in California and
how we can afford to continuedoing what we're doing in
agriculture. And here in theSalinas Valley and in Central
Coast with the crops that wegrow here, we do need those
hands to harvest our crops. Andso we don't have that option of
going to some sort of mechanicalharvesting yet. Even though
(07:12):
there's a lot of research and alot of dollars being thrown at
that right now, we don't havethose solutions that are
financially viable.
When you look at one of theother ones that probably people
don't realize or understand asmuch as air quality regulations
and how those impact not onlywhat we do on the farm with our
stationary equipment, but nowmoving into farm equipment that
(07:33):
is mobile as well as what we'reusing to transport our products
either from the field to themarket or the field to the
cooling facility and then to theprocessors. With that, we saw
56% increase in the last eightyears. And so you you're seeing
a trend here. These numbers andpercentages are pretty darn
large now, and they areoverriding the fact that now
(07:55):
it's over 10% of our costs ofinput are regulatory costs here
in California. And to be exact,it's about 12 and a half percent
now.
So when you start thinking abouthow we're producing our crops
here and realizing that thefarmer is not getting a recovery
of those costs in the marketprice that he is selling the
(08:16):
product for, it hits the bottomline pretty hard. And so that
makes it all the much tougherfor our small farmers to really
remain financially viable fromyear to year.
Speaker 3 (08:27):
So I have a quick follow-up question to that,
Norm. I think it's reallyimportant for folks to
understand while this report wascommissioned by Monterey County,
these trends are impactingCalifornia growers. It's not
specific to Monterey Producers.But what are you all doing, or
what are you hoping to do withthis data that you have
(08:47):
solidified now? Like, how areyou using it as an advocacy and
agricultural literacy tool?
Speaker 5 (08:53):
Well, we are providing it to the elected
officials who are making thosenew laws that create these new
regulatory programs, and we'rewatching closely where we can
insert this into theconversations for new laws that
they're developing this year,which there are already several
that we're having thatconversation on. But moreover,
with the regulatory agenciesthemselves, helping them to
(09:16):
understand that everything thatthey do has a cost. And for
example, when we went throughour last iteration of the
irrigated lands program here,they really didn't look at the
economics of what they weredoing to agriculture with all
these new requirements, whetherit's the gathering of data from
points in the field, how theyhave to report it, understanding
(09:38):
the calculations that arerequired when they're reporting.
Those all come into the aspectof the regulatory costs. And so
I think it's more important thatwe get this out in front of the
regulators so that theyunderstand when they're
proposing changes to programs ornew programs that these have
financial impacts toagriculture.
(09:58):
And so we are having thosediscussions. I think one of the
elements that we found in thereport too is that there's a new
cost of education and trainingwithin agricultural companies to
keep up with all thesecompliance requirements. Whether
it's the reporting or whetherit's the data gathering, there's
a lot of education that has totake place. And unfortunately, a
(10:20):
lot of those programs changefrom year to year. And so that
is really a dynamic that we areseeing that farming operations
as well as ranching operationsand the processors have to keep
up with those changes.
And right now, that pencils outat about 25 and a half dollars
per acre. So when you startadding all of these costs per
acre up and we come to that$1,600 number here on the
(10:44):
Central Coast, we can translatethat easily to a lot of the
other crops that are beingproduced in California simply
because we all more or less workunder the same regulatory
scheme.
Speaker 3 (10:55):
So I'm stepping on Kristen really quick. One of the
things that I've seen recentlycome out of California Farm
Bureau, and they are noting someof your numbers, is the Brian
the project that Brian Little isworking on right now to provide
a tax cut opportunity forproducers who are paying
overtime. So hopefully, fingerscrossed, that'll be one area
(11:18):
where we can see a little bit ofbreathing room. But as we know
in California, though, therewill be no rolling back of any
sort of regulatory change.
Speaker 5 (11:27):
Yeah. And I think that's an important discussion
that we need to have, and Ithink the tax roll break for
overtime costs may have asignificant impact. It just
depends on how it is implementedand the rules around it and how
quickly payroll systems can bemodified to actually make that
deduction when they're payingthe taxes that that employees
(11:50):
are collect or they're collectedfrom the employees. So I think
there's a lot of answers therethat need to be forthcoming in
how that mechanically is goingto work and hopefully not
another additional burden forfarms to calculate that and
determine how that's going towork. But there is an
opportunity there.
But you're right. I think we'rein a regulatory system right now
(12:12):
where we really don't see thoserollbacks, and every layer
that's added on additionallybecomes a cost just like what we
saw on this report.
Speaker 4 (12:21):
Annie, you covered something that I was gonna ask.
But, Norm, you talked a lotabout the $1,600 an acre, all
the things that that roll intothat. Were there any other parts
of the report that you werereally surprised by, or is there
any piece of it that deeplyconcerns you that you might
wanna dive deeper into rightnow?
Speaker 5 (12:40):
Well, I think the one area I would say that surprised
me is actually a positive isthat we're not seeing escalating
costs for food safetyrequirements. I think we pretty
much got that down in what we'reproducing here with leafy greens
and fresh vegetables, and we areactually the leading area for
food safety related to the leafygreens marketing agreement. And
(13:01):
people have been doing that fora while. So we did not see as
dramatic a leap in those costswhere other areas, as I've
noted, went up substantially. Somaybe that's leveling off a
little bit, but that's still oneof the primary concerns that we
have for our food supply ismaintaining that food safety
element and continuing todevelop new practices as the
(13:25):
science either directs us orproves that something needs to
be improved or changed.
That was a relief, I think. Weare all expecting a lot more
from the food safety elementsthat people have to do, and it
is a pretty costly per acrewhere we're looking at $244 per
acre maybe on an average forfood safety requirements, but
(13:47):
that is relatively a lowerpercentage than what we saw for
a lot of the other areas ofregulatory concern, particularly
the labor and labor health andsafety areas.
Speaker 3 (13:59):
That's interesting. I think it's important to note,
Norm, Correct me if I'm wrong,and this kinda leads into our
next question. But the marketingagreement around leafy greens,
that was something that growersdid proactively. Right?
Speaker 5 (14:10):
Yes. That was what the industry took on themselves
rather than allowing theregulators to dictate what we
should be doing. We knew betterhow to solve those problems and
develop the leafy greensmarketing agreement in
cooperation with growers as wellas the processors and the
transportation sector to reallymake sure that we're we're
(14:30):
touching all parts of the supplychain as the product moves
through it. We are the epicenterof this, and I think many across
the country are now wonderingwhy they are having to do the
same thing. And really, it's forthe benefit of our food supply
in general, to make sure that weare producing a product that is
the most safe in the world, aswe call it.
(14:52):
But, yes, we are the epicenterof food safety, and that is, I
think, primarily one of thebigger choices that the
operations have to make is howthey handle their food safety
practices. And unfortunately, ithas become a huge liability
issue too if something isrecalled, that they have to
manage that process also. And sothere's a lot of back end
(15:14):
practices that have to beobserved at the same time. So it
is all encompassing, and I thinkmost operations here would say
food safety is their primaryconcern when they're harvesting
product and putting it into thesupply chain.
Speaker 3 (15:28):
So, Norm, I do wanna maybe take us down a route of
hopefully a more positive notethan additional regulatory cost.
It's it seems we have the moststrict rules in regards to
agricultural production anywhereelse in The United States, and I
would argue anywhere else in theworld. How can we switch the
(15:50):
narrative rather than saying, ohmy lands, we have to comply with
all this stuff. Is there anopportunity for us as California
growers to market our productsas you just said it, the most
safe in the world and get apremium for that. Do you see
that opportunity?
Speaker 5 (16:06):
I think it starts with telling our story. I think
we need to tell a better storyas we go along, and it can't
just be me, a talking head, soto speak. It has to be the
growers themselves putting thatforth into the public domain, so
to speak. So first of all, Ithink we need to tell our story
better. And second, I think wehave a good story to tell.
(16:27):
We just need to figure out howto get that into the public
domain, and most of thatprobably would need to go
through social media. And we allknow social media has its
pitfalls and can easily turnaround into a war of words with
those who disagree. We have tobe very careful about how we
approach that. We've oftentalked about how we could manage
(16:49):
that as a overall brand, likeSalinas Valley Produce is the
safest in the world, which weall realize is probably very
true statement, but it is notreally out in the public domain,
partly because we have so manyfood safety recalls that are
precautionary and notnecessarily a threat to the food
(17:11):
supply. As the science evolvesand the testing evolves, we're
testing for parts for billionnow.
That makes the science all thatmore complicated, and so the
precautionary recalls are muchmore in the public domain, and
that's what people see. And theydon't necessarily relate that to
the science of how we'rediscovering those situations. So
(17:32):
I think there's a great storythat we can tell, and hopefully,
we can make that something as apride of California product,
whether it's lettuce, whetherit's peaches, whether it's
avocados, whatever the case maybe. I think there is an
opportunity to do that, buteveryone has to realize too that
comes with a cost of production,and that they will be paying for
(17:53):
that hopefully at the consumerlevel. And that's something
we're not seeing right now.
And that's one of the thingsthat this report pointed out is
that in those eight years from2017, the price of lettuce has
actually only increased at thewholesale level by less than 1%.
The dollars are not recoveringthe costs of doing all these
(18:14):
great things for the consumersbecause the consumers are not
recognizing the value of what'sgoing into their food supply.
And, honestly, I don't think theaverage consumer understands
that a lot of their product isgrown in The United States. But
it also comes from othercountries, particularly South of
us. So I think that's somethingthe consumer needs to be more
(18:35):
aware of as they look atproducts in the supermarket.
We can't have peaches twentyfour seven, three 60 five
because that just isn't theseason here. So they must come
from someplace else. So I thinkthere is a good story to tell.
We just need to figure out howto get it out there.
Speaker 3 (18:50):
It's funny that you say that, Norma. I used to feel
very passionately about peopleunderstanding where their food
comes from. And as I spent moreand more time in our industry,
in particular, my relationshipnow with Farm Bureau, it's such
a and you mentioned this, thedata, the science. It's such a
scientific operation that ourproducers are doing. It really
(19:11):
is hard to articulate what it isthat they're doing.
And so I've changed my narrativenow to, I I want consumers to
have an appreciation for ourfarmers, ranchers, and dairy
men, and all of the things thatthey juggle day to day, year to
year in order to ensure that wehave the safest food supply in
the world on our tables. And Iagree with you. I think there's
an opportunity there. We just weneed to figure out what that
(19:33):
messaging looks like.
Speaker 5 (19:35):
Yeah. Exactly. And I think to some degree, we have
spoiled the American consumer byhaving great product. It's
almost perfect. Every time theygo into the supermarket, they
can find anything and everythingthey need $24.07, $3.65.
And so we have really spoiledthem, and we are seeing that
now. It's the lowest cost ofproduction in the or excuse me,
(19:58):
of the price of food in anywherein the world related to the
overall income level. And so weneed to figure out how to put
that value back into ourdomestic food supply and really
get the consumer to appreciatewhat we do as farmers and
ranchers to get that product tothe marketplace.
Speaker 4 (20:16):
Is there a place that people can go and see some of
this data?
Speaker 5 (20:19):
Sure. The report is available off our website, which
is MontereyCFB.co. So Montereyis in our area here, but
CountyFarmBureauCFB.co. Andthere's a link on our landing
page to the report itself thatcan be downloaded so you can
read the entire thing. And ithas a lot of good data and and a
lot of detail related to thevarious different areas of
(20:42):
regulatory compliance that theystudied as well as some things
that they decided were reallyoutside the scope that people
may have questions about.
Speaker 4 (20:51):
K. Yeah. And it might be interesting to see how it
translates across county tocounty.
Speaker 3 (20:55):
Yes. Yeah. Maybe before we wrap it up, Norm, is
there anything we're missing? Isthere anything else you'd like
our listeners to know about thereports or what you all are
doing with the data?
Speaker 5 (21:05):
I think the overall message here is it's getting
increasingly more difficult todo business in California,
whether it's agriculture,whether it's manufacturing,
whatever the case. And this justdemonstrates that with our
excessive regulatory burden thatwe have in California that
really puts us at disadvantagein some cases. It really
(21:26):
highlights the fact thatCalifornia is an expensive place
to live and work, and we are notseeing any light at the end of
the tunnel where they're tellingus they're not gonna continue
doing this. So I think we needto have that conversation with
our legislators and moreoverwith our regulators to get them
to understand that California isan important part of our food
(21:47):
supply chain, and we need tomake sure that we protect
agriculture, whether it's thesmallest barber or all the way
up to the larger farms that areproducing large quantities
simply so they can fill themarketplace. It's an important
message we need to continueputting out there.
Speaker 4 (22:04):
Well, we like to close the show with a call to
action, and I feel like thatkind of was action. I was gonna
ask you what should your call toaction be for our listeners, for
your members, in your FarmBureau, or members across Well,
Speaker 5 (22:17):
as I tell our farmer and rancher members here is
they've got to get out in frontof those legislators and those
regulators and tell them theirstory. Tell them what they do on
the farm. We invite many of themto come and take tours here
because our intensiveagricultural system here is very
unique and very different, andalso because we can do it
(22:38):
because we have water, climate,and soil that supports that type
of intensive agriculture. And soI suggest or continue to suggest
to all our farmers and ranchersthat it just can't be me putting
this message out there. It hasto be them themselves from their
experiences on the farm andranch.
Speaker 3 (22:55):
What a great way to wrap it up, Norm. Thank you for
your time this morning and, yourcommitment to Farm Bureau. And,
honestly, the I reallyappreciate that you and your
board and your team there sawthe value in putting in
investing in a report like this.
Speaker 5 (23:11):
Right. Thank you. Appreciate the time.
Speaker 4 (23:13):
Yeah. It was really nice meeting you, and thanks for
being on the show.
Speaker 5 (23:16):
Very good.
Popular Podcasts
Fudd Around And Find Out
UConn basketball star Azzi Fudd brings her championship swag to iHeart Women’s Sports with Fudd Around and Find Out, a weekly podcast that takes fans along for the ride as Azzi spends her final year of college trying to reclaim the National Championship and prepare to be a first round WNBA draft pick. Ever wonder what it’s like to be a world-class athlete in the public spotlight while still managing schoolwork, friendships and family time? It’s time to Fudd Around and Find Out!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!