Western Growers Statement on California Gas Tax (SB 1) Repeal Efforts

January 4th, 2018

IRVINE, Calif. (January 4, 2018) – Western Growers has provided financial support for qualification of an initiative to repeal SB 1, the California gas and diesel tax increase enacted last year. Western Growers President and CEO Tom Nassif issued the following statement:

“Western Growers opposed SB 1, the $55 billion gas and diesel tax increase, for several reasons. We were not satisfied that the state had made the case that enormous amounts of gas and diesel tax moneys collected in prior years had been properly dedicated to road and highway maintenance. We were concerned with the lack of reforms to state transportation spending in SB 1.

“Our industry is heavily impacted by California’s already-high gas and diesel taxes, but we were presented SB 1 as a finished product. We have now been presented with a viable mechanism to force a do-over by the next Legislature, with the consent of the state’s voters, and we believe this would be in the best interests of California’s farmers.”

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About Western Growers:
Founded in 1926, Western Growers represents local and regional family farmers growing fresh produce in Arizona, California, Colorado and New Mexico. Our members and their workers provide over half the nation’s fresh fruits, vegetables and tree nuts, including nearly half of America’s fresh organic produce. Some members also farm throughout the U.S. and in other countries so people have year-round access to nutritious food. For generations, we have provided variety and healthy choices to consumers. Connect with and learn more about Western Growers on our Twitter and Facebook.

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Western Growers Applauds Finalized “Waters of the United States” Applicability Date

January 31st, 2018

IRVINE, Calif. (January 31, 2018) — In response to today’s news that the Environmental Protection Agency and U.S. Army Corps of Engineers have finalized the applicability date of the 2015 Clean Water Rule, providing an additional two years for the agencies to reconsider the “Waters of the United States Rule,” Western Growers Vice President of Federal Government Affairs, Dennis Nuxoll, issued the following statement:

“The producers of America’s safe and affordable food are our nation’s first and finest stewards of the land and its resources. Yet, the Obama-era Clean Water Rule overextended the reach of the Clean Water Act, jeopardizing the livelihood of family farmers across the country. We applaud EPA and the Army Corps for hitting the pause button while we search for added clarity and certainty for America’s farmers. In the coming years, Western Growers looks forward to working with the Administration to refine the rule, ensuring it achieves the aims of the Clean Water Act while preserving the ability of our farms to stay in business.”

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About Western Growers:
Founded in 1926, Western Growers represents local and regional family farmers growing fresh produce in Arizona, California, Colorado and New Mexico. Our members and their workers provide over half the nation’s fresh fruits, vegetables and tree nuts, including nearly half of America’s fresh organic produce. Some members also farm throughout the U.S. and in other countries so people have year-round access to nutritious food. For generations, we have provided variety and healthy choices to consumers. Connect with and learn more about Western Growers on our Twitter and Facebook.

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Legislator Profile: Representative Ken Calvert from California’s 42nd Congressional District, encompassing parts of western Riverside County

January 17th, 2018

By Western Growers staff

 

Born and raised in the city of Corona, California, in the western-most part of Riverside County, Congressman Ken Calvert witnessed the growth explosion of his hometown and the surrounding areas over the last several decades. The lifelong Riverside County resident, who currently represents the state’s 42nd Congressional District and serves on the powerful Committee on Appropriations in the U.S. House of Representatives, watched the area transform from a largely rural one to a congested urban satellite where traffic has become one of the biggest issues to most who live there.

The 42nd congressional district is not new territory to Calvert. He has represented the area in one way or another since he was first elected in 1992. Redistricting required him to change the districts he previously served, bouncing him from the nearby 43rd and 44th congressional districts, respectively, to where he is now.

His district, which is part of the Inland Empire, and encompasses such cities as Corona, Murrieta and Temecula, once thrived with agriculture. From the turn of the 20th Century until the 1970s, the area was dominated mostly by citrus, heavy concentrations of dairy farms and vineyards that produced table grapes, raisins and wine. In fact, for more than 75 years, Corona was known as the ‘Lemon Capital of the World,’ housing industry giant Sunkist, and its 700 employees who grew and processed lemons and citrus products. During a recent interview, Calvert recalled the importance lemons had on the area, saying of him and his family, “We used to put lemon on and in everything.”

Eventually, agriculture’s hold on the region gave way to the demand for housing and other development, falling victim to Southern California’s population boom and the ensuing urban sprawl in the 1970s. Though sprawl never killed agriculture in that part of the Inland Empire, it certainly dictated what ag remained in the area. The focus is now on more higher-priced products, such as the wine that comes out of places like Temecula and Murrieta in the southern part of Calvert’s district.

Despite the shift, agriculture is still a focus of Rep. Calvert’s efforts in Congress. As chairman of the Interior and Environment Appropriations subcommittee, and as a member of the Energy and Water Development Appropriations subcommittee, he overseas a variety of issues that directly and indirectly affect agriculture.

One of Calvert’s earliest efforts in Congress was on behalf of the wine industry. Grape growers were battling Pierce’s Disease (PD), a grapevine-killing malady spread by a pest called the glassy-winged sharpshooter that scourged California’s wine industry. According to the California Department of Food and Agriculture (CDFA), the first threat posed by this disease “occurred in Temecula, Riverside County in August of 1999, when over 300 acres of grapevines infested with the glassy-winged sharpshooter were infected with [Pierce’s Disease] PD and [were] ultimately destroyed.”

Calvert worked with California’s congressional delegation, growers, the Wine Institute and others to secure federal and state funds to fight the pest and the disease. He also worked with UC Davis and UC Riverside to come up with plant species that are disease resistant.

Unfortunately, as Calvert points out, the fight against ag diseases continues, referring to the appearance of the Asian citrus psyllid in California, including in his district. The insect can carry a virus that causes a condition known as “citrus greening.”

“Frankly, it scared the hell out of us,” he said, adding that the citrus industry in Florida and Texas have been partially destroyed by the virus. “We don’t want that to happen in California so we’ve been working with those states to get the resources farmers and the state need to fight the psyllid.” Calvert said now that the psyllid is here, we need to make sure that they don’t have the disease and don’t spread it. “It’s a real problem,” he said. “We are all working together to find the funding to invest in the research needed in order to find a way to deal with this.”

As a former ag committee member, Calvert was quick to address the importance of passing a farm bill that includes programs for research and development funding for pest and disease prevention, among other programs that benefit specialty crop growers. Because many provisions that are part of the 2014 Farm Bill will expire in the fall of 2018, Congress will take up debate on a new farm bill this year.

The bill also includes programs related to production agriculture and controversial nutrition programs such as the Supplemental Nutrition Assistance Program (SNAP). As in years’ past, debate around nutrition programs and subsidies for production agriculture will undoubtedly be highly-contentious, making passage of a bill difficult and dependent on bi-partisan support. Calvert acknowledged the importance of each of the major programs that are part of the bill. He stressed the need to ensure that funding is in the bill for research into pests and plants, ag inputs and the development of agtech advancements to help the industry. Tying it back to the psyllid threat, he said research is needed to find an effective way to deal with the pest in the short-term while also developing a long-term solution that eliminates it once and for all. He added that working closely with the citrus industry to stop the threat is crucial.

A supporter of President Donald Trump, Calvert said farmers should already be enjoying and realizing some of the benefits of policy changes being made by the new administration. In particular, he was referring to the Administration’s rollback of Obama era processes and regulations that were more harmful than good to individuals and businesses, adding that such policies were a trademark of that administration. “I think that a lot of people in the farming industry already noticed that there is a new sheriff in town,” Calvert said. “In Congress, we used the Congressional Review Act about 15 times to repeal regulations that made it difficult for small businesses to thrive and also made it tougher for people to find jobs,” he proudly added.

As chair of the Interior Appropriations subcommittee, one of the agencies Calvert funds is the Environmental Protection Agency (EPA). He said as chairman, he tries to ensure Congress funds agencies and programs that provide improvements for taxpayers rather than ones that are bureaucratic and create more red tape. “That’s been one of the things that has been very important to me. That’s been a big deal,” he said.

On the subject of North American Free Trade Agreement and the trade pact’s renegotiation, Calvert said he voted for the initial agreement and got a lot of blowback for doing so at the time. But things have changed and trade groups like Western Growers and the wine industry are pushing for the deal to be renegotiated instead of terminated. Calvert said he believes in free trade, but like the president, he also believes in fair trade and feels President Trump and his administration are simply trying to equalize the trade imbalances that exist between Mexico and Canada in industries other than ag, even though ag is part of the overall equation. When the president and his administration talk tough on NAFTA it’s with that goal in mind he surmised. He personally doesn’t feel it’s the president’s goal to get rid of it. In the end, he hopes an agreement will be reached that is largely beneficial to everyone.

Calvert also addressed two of Western Growers’ members’ top issues. The first was immigration reform and the use of e-verify. The second was infrastructure needs and funding.

The e-verify issue is one of Western Growers’ most important issues because it deals directly with its members having access to workers now and in the future. Calvert was the original creator of the e-verify program and currently is sponsor of a bill that would require all employers to use the system, something that Western Growers opposes as a stand-alone measure.

Calvert said it’s been a number of years since the program was integrated into the immigration process and although the system is not mandatory, he believes it has worked quite well for those who have used it. “Millions go through the system every year and it works,” Calvert said, noting that its use is already mandated in a number of states.

Western Growers’ supports the use of a mandatory e-verify program, but that support is contingent on ensuring that practical and reasonable solutions are achieved for both the current and future workforce that American farmers depend on in order for the industry to remain competitive. In other words, Congress must also pass immigration reform.

Despite his affinity for e-verify, Calvert recognizes ag has a labor problem. He said that’s one reason he supports Chairman Goodlatte’s bill, which he believes will be improved as it makes its way through the legislative process. Calvert did point out that the Deferred Action for Childhood Arrivals (DACA) is a high priority item for Congress and that issue will most likely be addressed first. He said he is not sure if e-verify will be part of that discussion but suspects we will soon find out.

“I recognize ag is an important industry in our state and across the country and needs labor to provide food and fiber to the American people,” Calvert said. “We in Congress want to make sure you continue to do that. I talk to a lot of farmers and they mention this issue to me as their first, second and third item of importance.” On this and on every issue, Calvert said it was important for farmers to remain engaged on these subjects and continue to remind their elected leaders of the issues that concern them.

Lastly, Calvert addressed the issue of infrastructure reform, reiterating the president’s goals of addressing welfare and infrastructure reform now that tax reform has been signed into law. Calvert said that many infrastructure projects fall under his jurisdiction. He realizes that infrastructure reform goes far beyond surface projects, acknowledging the need to address airport, utility and water projects, among other things.

“Water storage and conveyance is not only important for farmers, but it’s also important to the general population,” he said. “I’d like to get the Shasta Dam addition under construction. An increase in the height of the dam by a modest elevation of 18 feet will give us a lot more yield in acre feet. It’s important to get things moving.

Calvert also cited the various funding mechanisms in place that can leverage state and federal dollars to help complete road, water, sewer, wastewater and flood control projects. “We will give folks tools to build more projects that are qualified rather having them simply work us over for more money.”

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This is Jerry’s Last Year, What’s Next?

January 17th, 2018

With several initiatives and numerous statewide and Congressional offices up for grabs, 2018 will be a busy political year. I recently wrote about Arizona Governor Doug Ducey, whose strong economic policies and sensible approach to regulation have set him on course for a successful reelection campaign.

California, as always, is a different story.

Much has happened in California since 1975, and 37 percent of that time, Jerry Brown has been governor. Due to term limits, this year is definitely his last as the state’s chief executive, so it seems a good time to take a brief look back at his impact on our industry.

During his first stint as governor, Brown famously espoused his canoe theory of politics: paddle a little on the left, then a little on the right, and go straight down the middle. However, as evidenced by his alliance with Cesar Chavez, support for the United Farm Workers (UFW) and signature on the landmark Agricultural Labor Relations Act (ALRB), Brown banked his political canoe hard left his first go around, at least when it came to agriculture.

After a period of political desert wandering, Brown reemerged—first as mayor of Oakland, then as state attorney general, and finally as Governor Part Deux—slightly less ideological and a bit more pragmatic. Indeed, during his first term in this second go-round, Brown steered his canoe on a somewhat straighter course. Shortly after coming into office, Governor Brown sent shockwaves through Sacramento when he vetoed card check legislation, the then-crown jewel of the UFW’s legislative agenda. Brown rejected other UFW-sponsored bills, including a punitive heat illness measure that would have paved the way for a rash of class action lawsuits.

Unfortunately, in the current and final four-year term, and without another statewide election confronting him, Brown dealt California agriculture a devastating one-two punch by approving legislation that mandates massive hikes in minimum wage and overtime rates. On environmental policy, the record is similarly mixed. For example, at Brown’s insistence, renewal of the “cap and trade” system at the heart of the state’s greenhouse gas reduction strategy included provisions to aid the agriculture industry. Less helpfully, the Governor’s water quality regulators have imposed costly requirements on farmers while simultaneously seeking to reduce water availability from key rivers.

I provide this abbreviated analysis not as a critique of the Governor, but as a means to set up the significance of the 2018 gubernatorial election. While it may seem that Brown is constantly paddling in the opposite direction of California farmers, he has proven reasonable in certain situations, and is usually open to debating the pros and cons. For all the well-deserved criticism, Brown does have a fundamental appreciation for agriculture and has often served as the only check—a backstop, to use a baseball reference—to the radical excesses of the majority in the California Legislature. The obvious question is whether the next governor might have a similar approach.

This is the reason why Western Growers directors and staff have been so diligent in reaching out to the major candidates. To date, we have had substantial interactions with former Los Angeles Mayor Antonio Villaraigosa, State Treasurer John Chiang and Lieutenant Governor Gavin Newsom. Villaraigosa and Chiang have already addressed our Board of Directors in person, and Newsom will join us for our next Board Meeting in March.

Based on our private conversations and public statements made by the current frontrunners, each of the candidates projects a desire to understand and help support agriculture, to different degrees.

Villaraigosa clearly understands the direct connection between California agriculture and the economic livelihood of his most significant voter base: Latinos. He supports efforts to increase our water supply and has expressed his desire to “look out for the interests of farmers.” Additionally, he has shown an independence from the unions that are so powerful in Democratic campaigns. As mayor, Villaraigosa clashed with government worker unions as the Great Recession forced cuts to public payrolls. He also publicly scolded the state’s teachers union for its role in protecting bad teachers.

Newsom is quite vocal about the iconic value of California agriculture. As a business owner himself, he has acknowledged the regulatory challenges facing California farmers, stating that “we could do a lot better to make a point that agriculture matters and we care.” As lieutenant governor—a position with few official duties and little influence—Newsom hasn’t had much of a chance to influence the state’s policies. As he campaigns for governor, however, Newsom has embraced key positions of the progressive (or liberal) wing of his party, such as supporting a single-payer health care system.

Chiang also supports the single-payer system, although he talks about it with caution, noting the need for a realistic scheme to pay for it; this financial acuity permeates his campaign as Chiang stresses his record as both state controller and treasurer. In his meeting with the WG Board of Directors, Chiang focused on fiscal management and mostly bypassed discussion about labor, water, regulatory demands and other major issues, leaving a great deal of uncertainty about the impact he would have on our industry if elected governor.

Then there is the matter of the Republican candidates for governor. Many in our industry affiliate with the Republican Party, myself included, so it pains me to say that there is almost no chance a Republican can be elected here.

California is a heavily Democratic state; indeed, by the November election, it is possible that registered Republican voters will have fallen from second place to third, as independent voters (deemed “No Party Preference,” or NPP) increase their ranks. Nearly 45 percent of registered voters are in the Democratic column. Republican registration has fallen to 26 percent (from 34 percent just 10 years ago); independent/NPP registration now counts for 24.5 percent of the state’s voters and is increasing.

Nearly twice as many California voters chose Hillary Clinton over Donald Trump in 2016. California has not voted for the Republican nominee in a presidential contest since 1988. Not a single Republican holds statewide office, the state’s 53-member delegation to the House of Representatives includes just 14 Republicans, and the state Legislature is controlled by Democratic supermajorities.

As advocates for the best interests of our members and our industry, these are the realities we must confront as we prepare for a new governor. We can hope for, and will work toward, a rebalancing of California’s politics, but those efforts are probably best made within the realm of the Democratic majority. It is a near certainty that for the foreseeable future, California will be governed by that party.

All of this is to say that we have engaged, and will continue to engage, these candidates in an effort to determine their vision for California, to educate them on the role the state must play in protecting and promoting our industry, and to lay the foundation for future access and influence regardless of who wins in November. California is already a challenging place for agriculture, and times seem to be getting tougher, but we are redoubling our resolve to fight the fight, and these early and sustained exchanges with Villaraigosa, Chiang, Newsom and others will give us our best chance of developing a meaningful and, hopefully, productive relationship with the next governor.

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2018 Chairman of the Board Craig Reade: First Job Yields a Career

January 17th, 2018

Though Craig Reade’s dad was in the oil industry, he grew up around agriculture in the Central Coast and always knew he was destined to be in the farming business.

“From the time I was 10 years old, I was driving a tractor on a neighbor’s farm and I knew that was what I wanted to do,” he said.

Reade worked on farms in high school and college, majored in Ag Business Management at Cal Poly San Luis Obispo, and helped start a soil laboratory at nearby Betteravia Farms while still in college. Now, more than 35 years later, he is still at Betteravia Farms.

Today, he is a managing partner along with the other third generation partners: Mitch Ardantz, Rob Ferini, Alain Pincot and Tommy Minetti.  “We run operations while senior partners Henry Ardantz, Milo Ferini and Patrick Ferini bring the institutional experience and knowledge to the business while staying involved on a daily basis.”

Reade’s entry into the farming business wasn’t totally by happenchance. His father’s family grows grapes in the southern San Joaquin Valley. When the elder Reade moved to San Luis Obispo to attend Cal Poly, he “met my mom who was a San Luis Obispo-born-and-raised gal and never returned to the family ranch.”

But his dad was still passionate about farming and instilled that trait into a young Craig.  “As I look back at my career, I owe special thanks to a handful of people in the ag industry that took an interest in me, supported me, which afforded me an opportunity to follow a passion and become further involved with production agriculture. Families such as the Acquistapaces, Nishinos, Taniguchis, Ferinis and Ardantzes played keys roles in my success over the past 40 years and deserve a very special thanks.”

When Craig looks at the company’s current soil lab and protocol and its handful of technicians and myriad of tests, he chuckles a bit at the early effort he was involved in starting in the 1980s.  “We were doing very basic stuff—soil salinity, nitrate levels and pH levels. Much different than what we are doing today. We have a full lab complete with four full-time employees.”

After several years of running that lab, Craig began to work side by side with the farm’s general manager. He learned about ground preparation, planting and scheduling, and completely loves that part of the work. In those early years, he thought he would take the knowledge he was learning and eventually strike out on his own, but “I was treated so well here, I never left.”

While his involvement in management has brought him indoors for a significant portion of his work day, what he enjoys best is checking the progress of the many crops that the firm has been producing since the 1930s.

Today, the organization is a year-round producer of an array of crops with cauliflower, broccoli, head lettuce, celery and romaine serving as the core items. Those mainstays have been at the center of the company’s product list since that first crop was planted in the Santa Maria Valley 85 years ago. Today, with Betteravia Farms serving as the production entity and Bonipak Produce handling sales, cooling and shipping, the firm’s farming operations have expanded beyond Santa Maria to include a winter operation in Yuma, AZ.

And Reade said the list of crops seemingly grows every year. The newest additions have been Brussel sprouts and artichokes along with a return to strawberry production. Cilantro, cabbage and leaf items are on the list and Betteravia Farms has also established an organic program over the last decade with the firm’s core crops being the foundation of that effort.

Reade is well versed on the facts and figures of the firm he helps manage, but he is more interested in talking about the next generation in the family-owned business and how the technology of the future will solve today’s problems. “I really feel the next generation will play key roles in the way of advanced technologies that will get the right fix in place. Just in the past few years, I have personally witnessed great strides made in the way of automation. When looking for ways to improve through new technologies, it becomes very apparent that this new generation is the perfect fit. They get it and can take it even further with their innate understanding of hardware and software applications and the competitive challenge of advancement.”

Reade said when he started a spiral notebook was used to keep track of what was going on in the field. Now smart phones and iPads have not only replaced the notebooks, but they are used to run the ranches and do analyses.

He mentions that labor and water are major problems today but technology is being used to mitigate those issues. More efficient ways to irrigate, as well to plant and harvest the crops, are being developed at breakneck speed. For example, he mentioned an automatic lettuce thinner that Betteravia is now using. Four people can now do the work that previously needed a crew of 36. Reade is quick to point out that the company has a labor shortage so this new technology is not displacing workers. The workers doing this work can now move into more skilled positions and receive higher wages. “That’s a winner all the way around,” he says.

The Betteravia executive is also quick to point out that he is not minimizing the efforts of generations of leaders and employees that have made the firm what it is today. “When I mention the next generation, I am in no way discounting or ignoring the contributions previous generations have made to our company’s ongoing success. Since the early ‘30s, we have prided ourselves with the culture we have created which is all about and around our people. We fully understand that hiring the right person for the right job and then getting behind them with company resources and moral support is most important.”

Reade is equally excited about his year at the helm of Western Growers. He believes the next generation is not only the key for success at Betteravia and Bonipak but also at Western Growers and throughout the industry. He points to WG’s Future Volunteer Leaders effort and the Center for Innovation and Technology as programs that will propel the industry into a better future. He believes more work needs to be done to attract young people to the industry. He said advanced technology will play a big role, but there will still need to be people to walk the fields and tend the crop and make decisions about which crop should be harvested when. Reade noted that many companies, including Betteravia, do have a potential gold mine in their fields. He said many laborers have the ambition, the knowledge and the work ethic to be long-term key employees. “Don’t forget your pool of existing employees. You have a lot of real talent from within that you can develop.”

On a personal front, Reade is doing what he can to add to the agricultural labor force. He and his wife, Christine, have four young adults in the fold, each of whom appears to be headed for a career in agriculture or a related field. “Anthony is the oldest and the first to graduate from Cal Poly and is now working indirectly for the family business through a collaborative strawberry growing project. My second child, Lindsay, is nearing completion of her master’s program at Boise State University in Health Sciences. Andrew will be graduating this spring from Cal Poly in crop science, while my youngest, Lauren, will be a junior at Cal Poly continuing her study’s in ag communications.”

As they move toward empty nesting, Craig and Christine Reade have kept up an active life style. He credits WG Past Chairman Larry Cox and his wife, Tina, with introducing the pair to fly fishing. Craig also enjoys mountain biking.

And he is very much looking forward to his year as Western Growers Chairman of the Board. “I feel honored and privileged to have been involved with the Western Growers Association for the past 15 years and to now serve as its chairman. It’s a big responsibility that I take very serious and look forward to working very closely with WG’s leadership, board of directors and its wonderful staff.”

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It’s All About the Carrots

January 17th, 2018

Member Profile

Jeff Huckaby

CEO/President Grimmway Farms

Bakersfield, California

Member Since 1986

Grimmway Farms began as a sweet corn growing operation in Orange County in the 1960s, morphed into the largest carrot grower in the world in the 1990s in Kern County, and is now also the largest organic grower of vegetables in the United States.

All of this points to a diversified company with a wide portfolio of crops and services. That is true but longtime employee and Chief Executive Officer Jeff Huckaby said “it is still all about the carrots.”

He added: “Carrots are massive for us. They are still a big presence. We do not mind being known as a carrot company.”

And he explained that it’s not just a hard-to-shake reputation, it’s a fact. The success of the two founders, brothers Rod and Bob Grimm—both of whom died at a relatively young age—is well known and well chronicled. They started in Orange County in the 1960s with sweet corn acreage, added a farm stand early on and then fortuitously added carrots as a rotation crop for their sweet corn. By the 1980s, they had moved to Bakersfield and were well on their way to being carrot entrepreneurs. They perfected the production of baby carrots and helped launch a revolution in that category. Throughout the ‘90s, the company grew into the carrot powerhouse that it is today.

Of the 70,000 acres of carrots under cultivation in the United States, Huckaby says production from about 40,000 of them are marketed by Grimmway Farms.

It was in the 1990s that the company started to grow organic carrots, which the current CEO Huckaby admits was not wildly successful. “We did okay,” he says.

The shifting from corn to carrots was obviously a pivotal moment in the firm’s evolution. Another such moment occurred in 2001 when Grimmway Farms purchased Cal-Organic Vegetable in nearby Lamont. “That was a big shift for us,” Huckaby said.

He explained that ground used to grow organic carrots one year, must be planted with rotational crops in years two and three, before returning to carrots in year four. With the purchase of Cal-Organics, Huckaby said Bob Grimm made the commitment to devote the company’s best land to the organic sector. They couldn’t use leased land as the crop rotation made it impossible to preserve the integrity of the organic certification without controlling every crop on that ground, every year. Huckaby, who was in charge of Grimmway’s organic carrot production, became general manager of Cal-Organic and the leader of the firm’s march into the organic world.

Initially, the Cal-Organic’s purchase gave Grimmway 30 vegetable crops to rotate with its organic carrot acreage. Huckaby said after a couple of years and crop rotations it became clear that the soil was being improved and so was the output. He said the organic carrots being produced were of higher quality than before and yields were much better. Today the company has a stable of 65 organic vegetables that are utilized in the crop rotation with its carrot production.

But Huckaby said it is carrots that continue to be the focal point. Growth is determined by how much carrots are needed. “We have the ability to go out and increase our mixed vegetable production without increasing carrot production, but we don’t do that.”

As goes carrots, so goes Grimmway. That path has produced quite a winner over the years.  Huckaby said the firm has 42,000 of company-owned acres under organic production. It has come close to perfecting its crop rotation which includes onions, potatoes, broccoli and a host of other items, including cover crops that are tilled back into the field on a regular basis. This rotation, he said, improves the soil and results in the production of top notch organic crops on a continual basis.

Huckaby believes that the decision made by Bob Grimm in 2001 to use only the best land has been the key to their success. He notes that other growers often find a piece of land that has been out of production for three years or more to launch their organic involvement as that reduces the time needed for certification. “But there’s a reason that land wasn’t being used,” he said. “And it’s usually because of bad soil.”

Grimmway took its best land and produced its best crops.

While 20 years of organic farming experience has helped Grimmway achieve close to yield parity between its conventional and organic crops, Huckaby said it is still significantly more expensive to grow organic products, and the premium price they command is justified and needed. He said weeding costs are 10 times more in organic carrot production because there are no approved herbicides that can do the job chemicals can do on conventional land. And from a fertility standpoint, he said the work done with conventional carrots is cheaper and more effective. “Those two inputs alone are enough to justify the premium price.”

Huckaby said that currently organic demand is outpacing supply so the premium is still in play. He indicated that without that premium it would be difficult to continue growing organic crops.

For his part, Huckaby grew up on a farm, joined Bolthouse Farms after college as a farm manager and then several years later came to Grimmway to head up their organic farming division. He then took over Cal-Organic and became executive vice president of the firm after Bob Grimm passed in 2006. In 2016, Huckaby was elevated to the role of president/CEO.

Grimmway Farms is still a family-owned operation with three children of the original founders currently working within the organization and being groomed for future leadership roles. Brandon Grimm has been active in Western Growers and went through the organization’s Future Volunteer Leaders Program

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Western Growers Annual Meeting: Reade Becomes Chairman; Cannabis Session Attracts Big Crowd

January 17th, 2018

More than 550 attendees enjoyed networking socials, captivating educational breakout sessions and thought-provoking keynote speeches during Western Growers 92nd Annual Meeting in Las Vegas on October 29 – November 1, 2017.

During the meeting, Craig Reade, CEO of Bonipak Produce, Santa Maria, CA, was officially inaugurated as the 2018 WG Chairman of the Board of Directors while David Gill of Rio Farms and Gill’s Onions was recognized as the 2017 Award of Honor recipient for his visionary leadership in the agricultural community. Guests pondered over the political musings of P.J. O’Rourke during the PAC Lunch, gained insights into millennials from Kristen Soltis Anderson at the Chairman’s Luncheon and laughed with comedian Jim Gaffigan during the Award of Honor Dinner.

 

This year brought a collection of memorable breakout sessions:

•   Healthcare: A panel of state and federal healthcare experts discussed a variety of issues ranging from the state of play for the Affordable Care Act to the prospects of single payer healthcare.

•   Immigration: Political insiders from the U.S. Chamber of Commerce, Cato Institute and AmericanHort touched on the prospects of immigration reform, the pros and cons of Chairman Goodlatte’s “The AG Act” bill and the strategy for moving an agricultural solution forward.

•   AgTech: Six startup companies with technology solutions for the fresh produce industry competed for real-time investments from S2G Ventures, a food and agriculture venture fund. Two companies—AgVoice and Hazel Technologies—walked away with a $2.25 million total investment offer. (See separate story.)

•   Building, Preserving, and Protecting Capital: The panel of financial and insurance experts helped guests unravel the mystery of the economic outlook, equity markets, and private equity opportunities for ag.

•   Top Chef: The always popular Top Chef workshop featured two phenomenal chefs who demonstrated using everyday fresh produce in gourmet meals.

One of the most popular breakout sessions was surrounding the topic that is garnering many questions and concerns lately: cannabis. With the adult use of cannabis now legal in California as of January 1, 2018, the workshop examined the emerging state regulatory and marketplace structures for cannabis. Additionally, this standing-room only session delved into the risks and challenges legal cannabis presents both for entrepreneurs looking to seize the opportunity of the burgeoning new industry and for producers of fresh produce concerned about competing for limited resources such as labor and water. Employer liability was also discussed and the challenges cannabis production presents in that arena.

Western Growers Vice President and General Counsel Jason Resnick led the lively and passionate discussion between Lori Ajax, chief of the California Bureau of Cannabis Control; Henry Wykowski, general counsel at the California Cannabis Industry Association, Aaron Johnson, partner at L+G, LLP Attorneys At Law; and Jeff Brothers, co-founder of FLRish, Inc.

From beginning to end, the workshop engaged each of the attendees through compelling stories of cannabis use to the risks employers may face as the drug becomes legal in California. Johnson quickly captured the audience’s attention by sharing his personal story of how a severe neck injury triggered an addiction to painkillers. He was not able to quit his opioid habit until he learned that he could control the pain with a small dose of marijuana daily. He indicated that the injury caused—and still continues to cause—so much pain that without the use of cannabis, many of his daily activities would be difficult to accomplish.

“Small doses of cannabis can be beneficial to you. It was and still is for me,” said Johnson. He, along with Wykowski, went on to discuss how there have been proven studies that demonstrate how cannabis treatment has provided relief to many suffering from diseases such as Alzheimer’s and type 2 diabetes.

As the afternoon continued, panelists highlighted the challenges of trying to regulate a drug that is legal in several states, but not yet legal on the federal level. A significant challenge of getting involved in this new industry can be navigating through the nuances of regulations that are constantly changing. For example, Internal Revenue Code Section 280E prevents marijuana businesses from being able to qualify for deductions since cannabis is still considered a federally-banned controlled substance. However, there have been a couple of Tax Court cases in which the court allowed deductions for certain non-marijuana products sold at dispensaries.

“If you want to get into this [cannabis] industry, partner with someone who’s already involved and understands all the nuances,” advised Brothers, who started a Salinas-based cannabis cultivation company long before the drug was even legal in California. “Don’t rush in!”

Ajax then shared how the California Bureau of Cannabis Control understands the frustrations about complying with two different set of laws and was working to develop a regulatory scheme by the January 1 implementation date. Growers listened intently hoping to glean as much information as possible about this new crop. For some, the session was to learn how to take advantage of the opportunities that growing marijuana could present, but for others, it was learning how to mitigate the risks.

WG President & CEO Tom Nassif asked the question that was top of mind for many of Western Growers members, “What will the effect of cannabis production be on agriculture in California in terms of resources such as water and labor?”

Brothers stated how the the cannabis industry impacts agriculture can’t yet be determined, but stressed that “the cannabis workforce isn’t seasonal like traditional agriculture. Our labor is full time and permanent.”

The labor topic continued as John D’Arrigo of D’Arrigo Bros. Cos of California inquired about the use of the drug impairing employees at work. Many ag employers are concerned about their employees’ ability to properly function in jobs that require them to use heavy machinery, such as operate tractors or run equipment in the production plants.

“How do we know if an employee is high or if they just have marijuana in their system from their use weeks before? Should employers implement a zero-tolerance policy?” asked D’Arrigo.

Though the answer to how long the drug can stay in your system is still inconclusive because it can vary from person to person, Johnson chimed in with his personal views, “The choice is up to the employer. But if I wanted to work for your company and you had a zero-tolerance policy, I wouldn’t be able to apply.”

When the session concluded and the nearly 100 attendees started to exit the room, more in-depth conversations amongst the guests at Western Growers Annual Meeting about cannabis were just beginning to form.

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WG ANNUAL MEETING: AgTech Startups Offered $2.25 Million During Competition

January 17th, 2018

When the clock hit 4:00 p.m. on Tuesday, October 31, 2017, six startup companies fiercely pitched their technologies to a panel of investors and farmers in hopes of receiving generous investment offers and ample acreage to pilot their innovations. Two startups left with monumental offers while others left with partnerships that will be key to the companies’ ability to scale.

The inaugural AgSharks™ event kicked off during Western Growers (WG) 92nd Annual Meeting in Las Vegas, making it the first agricultural technology competition to offer real-time investment opportunities and decision-making in front of a live audience. With JV Smith Companies President & CEO Vic Smith piloting the event as moderator, six startups using technology to help solve issues faced on the farm presented their product to a panel of ag leaders and financial investors. These judges then inquired more about the product and feasibility of use.

“If you have an employee standing next to your 500-pound piece of equipment, what sort of safety precautions do you have so that the employee doesn’t get run over or harmed?” asked Ryan Talley of Talley Farms to representatives from Augean Robotics, who invented a robot that follows pickers in the field. Talley was one of six judges determining the viability of the ideas. The others were: WG Directors Rob Yraceburu of Wonderful Orchards LLC and Edwin Camp of D.M. Camp & Sons; and Sanjeev Krishna, Chuck Templeton and Matthew Walker from S2G Ventures, a key sponsor of the event. In addition to feedback from the judges, the audience had the opportunity to use the Annual Meeting app to rate if they would “buy, try or deny” the technology.

When the presentations concluded and the audience survey results were tallied, the room fell silent as the judges deliberated on which companies would receive equity investment offers. The AgSharks called up Bruce Rasa, CEO of AgVoice, and offered a convertible note investment of $200,000 at a $3 million cap. Rasa then rebutted, emphasizing the importance of how the company is developing the world’s first voice and data management system that allows ag professionals the freedom to work hands-free while on-the-go. Rasa triumphed and left the stage with an offer of a $250,000 convertible note at a $4 million cap.*

 “AgSharks helped bring us one step closer to our vision of giving any farmer, rancher and grower the ability to push a big button on their phone and have their voice records convert to data,” said Rasa. “This event is a first of its kind and is crucial to cultivating innovative solutions that focus on changing the system, not fixing the symptom.”

Fueling the enthusiasm of the crowd, the judges made an announcement that took everyone by surprise and had the audience nearly falling off their seats with excitement. Smith invited Aidan Mouat, CEO and co-founder at Hazel Technologies, Inc, to the stage to converse further with the judges. The company develops inserts that fights spoilage and slows the aging process of fresh produce. Learning that 70 percent of the audience voted to “buy” Hazel Technologies’ product, the Sharks decided to offer the start-up company an equity investment of $2 million.

“We are grateful that Western Growers and S2G gave us this platform to show how Hazel Tech increases returns, reduces labor cost, and opens new markets for grower-shippers,” said Mouat.

In addition to the offers made to AgVoice and Hazel Technologies, the start-up companies who pitched their technologies—Augean Robotics, Farm Dog, Food-Origins and iFoodDecisionSciences—walked away with connections that can lead to pilot programs or sales.

“AgSharks is an unprecedented event demonstrating the full potential of Western Growers’ innovation efforts,” said Tom Nassif, WG president & CEO. “AgSharks brought together growers, investors and agtech startups in a single forum to prioritize and fund technology that will help solve agriculture’s most pressing issues and move the industry forward.”

AgSharks is the latest WG effort to support agtech startups in accelerating the introduction of unique products and services to the market. In December 2015, WG opened an agtech incubator—the WG Center for Innovation & Technology—in Salinas, CA, to provide startups with the resources and mentoring needed to get their companies and technologies up and running. The center now houses 51 startups, including five of the six startups who competed in AgSharks. Startups involved with WG and the WGCIT are afforded the opportunity to participate in groundbreaking events, such as AgSharks.

“We are thrilled to have partnered with Western Growers which brings trust and access to local and regional farmers providing over half the nation’s fresh produce,” said Krishnan, managing director of S2G Ventures. “By providing capital to the entrepreneurs at Hazel Technologies and AgVoice, S2G and Western Growers support innovation on the farm and in the supply chain to improve farmer productivity and profitability.”

 

*The cap is the maximum price at which the note will convert. AgVoice is still in the early stages of growth and when it reaches the next round of growth, the convertible note will transform into a percentage of the company.

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Indoor Vertical Farms: The Wave of the Future?

January 17th, 2018

On November 1, 2017, the National Organic Standards Board (NOSB) voted—by the narrowest of margins—to allow growers utilizing container, hydroponic or aquaponics production to keep their organic certification. While the NOSB is advisory in nature, with the staff of the National Organic Program and other USDA officials making the final call, this vote is significant in that it maintains the organic integrity of growing practices employed in many non-traditional, urban farming-type scenarios, including vertical farming.

Vertical farming touts the use of vertical space—from the floor to ceilings that can be several stories high—to reduce inputs and increase outputs, leading to “more food per square foot of land.” Predictably, the indoor environment can be managed to yield year-round production. Indoors, out of the elements, the problems of pests and weeds can be virtually eliminated, with a corresponding near-elimination of the need for chemical applications. Water and nutrients can be applied and adjusted in controlled amounts at precise times. And portability—the ability to place vertical farms closer to population centers—lessens the carbon footprint generated getting food from field to fork.

Although not without its growing pains—as evidenced by the spectacular failures of Atlanta-based Podponics and Chicago-established FarmedHere, once the largest vertical farm in the U.S.—what began as a niche segment of the agriculture industry has developed into a fast-evolving, increasingly viable method of production.

Look no further than Plenty, a young Silicon Valley startup that is currently building a 100,000 square foot vertical farm outside of Seattle, WA, the first of what the company envisions to be many full-scale indoor farms near every major city in the world. Venture capital is paying attention, as Plenty has the backing of SoftBank, a tech-investment fund led by Japanese billionaire Masayoshi Son, and Bezos Expeditions (yes, as in Jeff Bezos of Amazon fame), who recently bet $200 million on Plenty’s global rollout plans.

Plenty claims their indoor vertical farms can produce crops at yields far greater than traditional farms, citing the statistic that a 50,000 square-foot room—about the size of an acre—can produce two million pounds of lettuce a year. They boast the ability to grow Whole Foods quality produce at Walmart prices, which makes the recent Amazon-Whole Foods connection even more intriguing. And they label their produce “super organics” or “beyond organics,” as there are no pesticides or chemicals used to grow their crops.

Other players in the vertical farming game are also receiving big-time funding from big-time investors. For instance, New Jersey-based Bowery has raised more than $30 million from GGV Capital (formerly Google Ventures) and others. Another New Jersey startup, AeroFarms, has reeled in over $140 million from the likes of Goldman Sachs and Prudential.

With all of the capital flowing into indoor vertical farming, should traditional farms be worried about increased competition in the marketplace?

Yes, and no. But mostly no, according to Jim Pantaleo, general manager of Urban Produce, an upstart vertical farming company nestled amidst a maze of industrial and office buildings in the heart of Irvine, CA. On 1/8th of an acre of space, Urban Produce can grow the equivalent of 16 acres of organic wheat grass, up to 10,000 pounds per month, which is supplied to a host of retail and foodservice companies, including a range of global cold-pressed juice clients.

“No, we’re not a threat to traditional farming,” Pantaleo states affirmatively as he scrubs his hands and dons a safety net before opening a heavy door to reveal his high-density, vertical-growing system. Once inside, under the bright pink LED lights, Pantaleo’s sharp, inquisitive eyes and wide, expectant grin seem better situated in a Las Vegas nightclub than an urban farm.

Pantaleo found indoor vertical farming almost by accident, as he was searching for a meaningful second career following two decades in the software-licensing business. After a friend introduced him to a vertical farm in Hawaii, Pantaleo became “hopelessly smitten with the world-changing possibilities vertical farming offered.” Then and there, he dedicated himself to learning everything he could about indoor vertical farming, and has since found an opportunity to apply the skills from his previous life to his newfound passion with Urban Produce.

“We’re not coming after anyone’s market share,” Pantaleo continues, offering a reassuring smile. “Indoor vertical farming is still a nascent industry with not enough players and not enough capital.”

However, Pantaleo does believe that outdoor farmers can learn lessons from the production systems employed in indoor farming. “At its core, vertical farming is about precision agriculture, using science and technology to increase yields while reducing inputs,” Pantaleo explains.

While traditional farming has made significant strides in conservation and efficiency in recent years, Pantaleo notes that the industry is still very resource heavy. “I know we can do things to make the industry, as a whole, even more sustainable. Agriculture and ultimately humans can greatly benefit when technology and science are applied at its highest levels,” he asserts.

Like the Ghost of Christmas Yet-to-Come, Pantaleo points to the success of indoor vertical farming in other, often resource-starved countries such as the Netherlands, Singapore, which has less than 250 acres of arable land, and Japan, which is still reeling in the wake of the 2011 tsunami that resulted in the meltdown of the Fukushima Nuclear Power Plant and widespread radiation contamination of the island nation’s farm land.

Since Fukushima, the number of Japanese vertical farms has almost tripled, from approximately 75 to more than 200. Led by Dr. Toyoki Kozai, the father of Japanese indoor farming and president of the Japan Plant Factory Association, the country has leveraged the tech prowess of several of its major companies, like Panasonic and Fujitsu, to reconstitute old semiconductor facilities into giant factory farms. One such Japanese plant factory, Spread, is capable of harvesting 20,000 heads of lettuce every day.

For Pantaleo, the ultimate success of indoor vertical farming, both here and around the world, will come down to capital and intelligence; businesses securing both the financial resources and management capabilities needed to build sophisticated growing systems and expand market opportunities.

But, even as this budding industry begins to sink its roots (pun intended), Pantaleo believes the role of vertical farms will never be to replace traditional farmers. Instead, he says, “It should be viewed as complementary to traditional farming, as a way to help the industry to meet the challenges of feeding more people, potentially 10 billion by 2050, with dwindling resources and increasing climate uncertainties.”

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Using Technology to Limit Shrink

January 17th, 2018

If you ask Hazel Technologies co-founder and CEO Aidan Mouat where the idea came from for creating the technology that helps prevent food waste by keeping fresh produce edible longer, don’t expect to hear an astonishing tale of discovery. “Everybody always thinks there is this ‘Eureka!’ moment in chemistry where some flash of inspiration starts the ball rolling on a new technology,” Mouat said during a recent interview.  “Our story is a little more pedestrian than that.”

But for growers, packers, and shippers of fresh produce, the important thing is not how the technology came to fruition, it’s how it can help improve the quality of their product and ultimately their bottom line. And Hazel’s technology does just that.

The main premise behind the technology developed by two of the company’s co-founders is sustainability. They started out with a mission to try to reduce food waste by coming up with a tool that was commercially attractive to growers/packers/shippers that could help solve key problems like rejections, downgrading or not being able to reach overseas markets. “We wanted to ensure that every piece of produce grown by our customers gets to a consumer who is willing to eat it. That, at its heart, is the solution to the food waste problem,” Mouat explained.

The company was born from a chance meeting between Mouat and Adam Preslar, the company’s chief operating officer, and one of its five co-founders. At the time, both Mouat and Preslar were doctoral candidates at Northwestern University and were enrolled in an entrepreneurial accelerator program called NUvention. Mouat held a bachelor’s and master’s degree from Emory University and was well-versed in materials and synthetic chemistry. The work he was doing in 2012 on his Ph.D and as the fellow for the Institute for Sustainability and Energy at Northwestern (ISEN) exposed him to sustainability challenges and other issues that included a new understanding of the role of chemistry in agriculture.

As a bio and medicinal chemist, Preslar was fascinated with working with relatively small, cheap, uncomplicated, manipulable molecules that he could use to trigger significant physiological effects in plants and animals. With Mouat’s expertise in small molecule separation, storage and manipulation, the pair found common ground. They combined their spheres of influence in sustainability and chemistry and moved forward.

“Putting those two halves together is what really created the technology we have today,” Mouat said. “Adam showed me a very cool set of molecules and with my background and expertise, I knew how to create very cheap and biodegradable materials that can deliver those molecules in a commercially relevant context.”

The pair knew they needed other skills to effectively flesh the enterprise out, and so they recruited other co-founders, including Amy Garber and Pat Flynn.

Garber, a patent agent for 10-plus years, holds a master’s of science in law from Northwestern and serves as the company’s chief intellectual property officer. Chief Marketing Officer Flynn has a degree in computer engineering from Northwestern. A fifth co-founder is no longer with the company.

 

The Technology and Its Sustainable Upside

Pedestrian beginning aside, it’s the technology that sets Hazel apart from others who dabble in this arena. Hazel’s core technology uses a small sachet that can be placed into master cases of produce. The sachet stores and time releases small amounts of an active ethylene inhibitor, 1-Methylcyclopropene (1-MCP), into the atmosphere of the produce that physiologically slows the aging process, improving quality and extending shelf life. “It seems simple, but it’s really not,” Mouat said. “There are a couple of simplifying factors—like the low concentration threshold—that make the chemical engineering much easier to attain.”

Most produce has a low threshold for application. Once the 1-MCP is applied and the saturated concentration level is reached, the effect is the same. All of the produce in the case is protected evenly.

1-MCP has been in commercial use, mostly by the fresh produce industry, for 25-30 years. The company that first commercialized it applied it through a fumigation process, but doing so limited its effect on most produce. Mouat and Preslar recognized that the problem was not with the compound, which Mouat describes as “phenomenal.” The problem, he said, was with the delivery system and how it was applied.

Mouat explained that he and Preslar changed the function of the materials to slowly release the active ingredients instead of doing it as a single shot, providing two benefits. The first is that the slow release application technology improves the response of the produce over single shot applications. The second benefit is that customers don’t have to change anything about their shipping and packing practices.

Mouat said they can change the dose rate of sachets to give customers different shelf life times. “We can literally dial in the shelf life requirements of each particular supply chain. It’s something that has never been done before and has gotten our customers fairly excited,” he said proudly.

“We have found this really cool sweet spot where our stuff is really effective and as a result, it gives customers one of the longest shelf life extensions they can get,” he said. “We’re not aiming for absolute length, we’re aiming for the right length and that ties back to our creedo: ‘We aren’t trying to make food last forever, we are trying to make it last long enough to get eaten.’”

The technology even fixes ‘ethylene crosstalk’ issues. Crosstalk prevents certain produce from being shipped with other produce since doing so speeds up the ripening process of some fruits and vegetables. “Our technology allows us to mix and match shipments,” Mouat said. “We have a customer that violates every rule of shipping by transporting all kinds of produce together, but because he has our product, that’s not a problem.”

The product doesn’t require users to change their shipping and packing practices. “That is something they customers can really appreciate it,” Mouat said. “We want to work with them instead of forcing them to work with us.”

One thing that will positively change for customers who use Hazel’s technology is their ability to reach new markets, particularly in Asia. Export crops typically generate more value than domestic crops due to better overseas prices, but the longer transit times are a challenge. “We have had a lot of customers get very excited about being able to throw our sachet in their box and get their product overseas with minimal freighting charges and maximum quality,” Mouat said.

Surprisingly, the technology is something the founders nailed on their first iteration, never having to go back and tamper with the original invention. Mouat attributes some of that success to luck but believes it is mostly because the team employed a ‘Keep it simple’ philosophy during development. Instead of being tempted to delve into more sophisticated engineering, they chose to work with nature’s most basic molecules keeping their customer’s bottom line in mind. Finding a cost effective solution was necessary to make their technology practical. “Our technology had to be cheap, effective and durable and had to be something we can mass manufacture because ag is one of the highest volume industries on the planet,” Mouat sad. “Having that philosophy is what guided us, and as a result, it was harder to fail.”

 

What’s in a Name?

After a free-association brainstorming session, the group chose the name ‘Hazel’ because it’s a color that helps reaffirm the company’s commitment to green chemistry without directly using the ‘green’ moniker evoked by so many other start-ups. “We really want to remind people that we are trying to promote a technology that is sustainable and eco-friendly,” Mouat said. “There are also naturopathic associations with the name,” he added, making reference to hazel plant and nut.

Perhaps one of the more interesting reasons for the use of ‘Hazel’ is that it also happens to be Adam’s grandmother’s name. “That made it relatable and personal for all of us,“ Mouat said.

In the end, they knew they got the right name when people started referring to the technology simply as ‘Hazel.’  “When you get that kind of brand stickiness, it’s clearly resonating with the customers, so we weren’t going to change anything.”

 

Growth from Western Growers’ Ag Sharks Investment

The company is still currently in the process of scaling up its operations, in addition to working through some manufacturing limitations and regulatory hurdles before it can make a move to become more publicly visible. Mouat believes they should be able to openly sell the product on the open market sometime this summer.

In the meantime, the co-founders have focused on developing relationships with their existing customers, prepping them for a full rollout of the product once they pass the company’s pilot stage. Mouat said this allows them to control of production quality and volume while also allowing them to collect real-time commercial data. The data they collect will let their customers know definitively that Hazel is doing the right thing and helping their business.

When the time comes, a large part of the $2.5 million in funding they will get as a result of participating in Western Growers’ first Ag Sharks’ event will provide the Hazel team with the needed capital to engage in serious expansion efforts. “We’re hiring new folks in January and doubling up on our production to fill customer demand,” Mouat said. “By summer, we expect to be hitting the market in a much bigger way, because of the visibility and money we got through Ag Sharks.”

 

The Future

When asked about where he sees the company in five years, Mouat said he hopes their global strategy will allow their technology to have a presence around the world, particularly in target areas like Latin America, Southeast Asia, Brazil, the European Union and Oceania.

He also sees it being an important technology for emerging markets that have a lot of arable land and little or no refrigeration or transportation infrastructure, such as in Africa, India and China.

“Being able to create drop-in technologies that can help extend produce shelf life without having to make multi-trillion dollar investments in infrastructure is a very powerful and lucrative tool that can help prop up agriculture and develop export markets in any emerging economy,” he said.

Continuing with his vision for the future, Mouat added, “One day, I’d love to see every case of specialty produce sold on the planet have a little stamp on the side of the box saying, ‘Protected by Hazel Technologies.’ And that will tell people where the quality and freshness is coming from.”

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Farm Bill is Back With Challenges & Opportunities

January 17th, 2018

By Dennis Nuxoll

Every few years Congress turns its attention to reauthorizing the Farm Bill, and the time to do that has come around again with the bill set to expire in October of 2018.

When farm bills roll around, the media is covered with stories about farmers getting production subsidies and fights about nutrition program funding. That seems very remote to producers of fruits and vegetables in the West because we use the Farm Bill in a very different way. Producers in our industry rely upon the Farm Bill to provide funding for research and development projects for next generation crop varieties, funding for pest and disease intervention, and conservation programs to help with endangered species. Some of the money earmarked for specialty crops is used to help promote exports into new markets, while another expenditure lowers crop insurance premiums to a reasonable level. Though our industry benefits from the Farm Bill differently than others, like all of agriculture, there is a lot at stake.

Unlike the last reauthorization, it is anticipated that this Farm Bill will face significant budgetary hurdles. With the recently enacted tax law that is likely to add trillions to the federal deficit, all federal government spending is under pressure. Adding to this pressure is the fact that there will be significant demands for funding because many agriculture sectors, including corn, cotton, soybeans and dairy, have experienced massive losses over the last few years. Fruit and vegetable producers asked for significant Farm Bill funding for the first time only about a dozen years ago so we are still seen as “new” to the party. So factoring in these issues, our industry’s first priority is focused on maintaining our funding and preventing competing sectors of agriculture from reducing our budget.

We also have to look out for those organizations on the right and the far left that would seek to destroy the Farm Bill. Organizations on the right, like the Heritage Foundation, have often called the Farm Bill programs nothing more than corporate welfare. They have teamed up with those on the left that would like to transform the Farm Bill into a vehicle to achieve extreme concepts of social and environmental justice.

Beyond basic defense, we are focused on making improvements to how the federal government spends money to better help our members. For example, we want to focus more research resources on the automation/mechanization of the specialty crop industry. While not all crops will need this research (potatoes and onions come to mind since they are already largely automated) most of the specialty crop industry needs to become more mechanized and rely less on an uncertain farm labor supply. Many efforts are already underway in the private sector, but resources the federal government could provide through the Farm Bill could act as an accelerant. As such, we are exploring ways to dedicate research dollars on this priority—a priority for USDA to stimulate research and product development in automation to save labor within the specialty crop space.

We also want to strengthen the existing pest and disease programs. We use those programs to detect and interdict pests and diseases before they take hold in a state. If pests and disease have arrived, either at the border or within a state, then these programs help to first contain, and then eradicate. Western Growers and other fruit and vegetable associations are also working to secure additional funds for the market access program that many producers use to promote their products in distant markets around the world. The employment and profit multiplier for that program is very high and we want to see more funds flow so American exports can grow. Finally, we are interested in using the Farm Bill to tackle pressing conservation problems facing our industry.

Whether securing funds to help prevent endangered species listings or money to better manage water use, the Farm Bill can serve as a tool. For too long, fruit and vegetable producers have not taken full advantage of those programs and we are striving to change that and make programs that are more accessible to our members.

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New California Employment Laws for 2018

January 17th, 2018

On January 1, 2018, a number of new employment laws will take effect in California. These laws will have a significant impact on California employers and companies with operations in the state. Prompt action will need to be taken to ensure compliance, including revising employment policies and practices such as hiring and compensation practices, employee handbooks, and notices. Below is a summary of many of the laws that affect agricultural employers. All are effective January 1, 2018, unless otherwise noted.

 

WAGE & HOUR

New Minimum Wage and Salary for White Collar Exemptions

When Governor Brown signed SB 3 into effect in 2016, he set California on course for a $15 minimum wage by 2022. The next phase-in sets the minimum wage at $11.00 an hour, up from $10.50 per hour, as of January 1, 2018 for businesses with 26 or more employees. Smaller businesses jump to $10.50 per hour.

The increased minimum wage also increases the minimum salary that must be paid to meet the so called “white collar” exemptions (i.e., executive, administrative, and professional). For employers with 26 or more employees, the minimum salary under California law is $45,760 per year as of January 1, 2018. For employers with 25 or fewer employees, the minimum salary under California law is $43,680 per year as of January 1, 2018. In addition, nine cities and counties have set their own minimum wages higher than the state’s minimum, including San Diego, Los Angeles, San Francisco, and San Jose, among others. Some municipalities including Los Angeles and Berkeley have even enacted paid sick leave ordinances that exceed state law requirements. Make sure to check whether or not the cities or counties where your employees work have such ordinances.

 

Ag Overtime

In 2016, Governor Brown signed AB 1066 into law, which will gradually lower the daily and weekly hours of work thresholds for paying overtime to agricultural employees starting in 2019 for ag employers with 26 or more employees and by 2022 for smaller operations. AB 1066 directs the Department of Industrial Relations (DIR) to update Industrial Wage Commission Wage Order 14 (which governs agriculture) to make it consistent with the new law. However, to date, DIR has not updated the wage order. As a result, it is unclear whether the Wage Order 14 exemptions from overtime (e.g., for irrigators and truck drivers, among others) remain in place for now or whether they sunset in 2019 when the overtime phase-in begins. However, most practitioners agree that ag’s exemption from the requirement to provide employees with one day’s rest in seven was eliminated by AB 1066 on Jan. 1, 2017. Western Growers, in conjunction with other industry organizations, is seeking clarification by state regulators and cleanup legislation, if necessary.

In Mendoza v. Nordstrom, the California Supreme Court ruled that the required “day of rest” is measured by the workweek as defined by the employer, and not on a 7-day rolling calendar basis. The court agreed the law allows a limited exception for part-employees who work no more than six hours a day and not more than 30 hours in a workweek. The court further clarified that employees may voluntarily decide to work more than six days in seven, after the employees have been informed of their right to take a day of rest and may take it free from coercion.

 

Immigration Worker Protection Act

New Government Code sections 7285.1 and 7285.2 prohibit an employer or any person acting on an employer’s behalf from providing voluntary consent to an immigration enforcement agent to enter a nonpublic area of business without a warrant. The new law also prohibits an employer from providing consent to an immigration enforcement agent to access, review or obtain the employer’s employee records without a subpoena or judicial warrant. Importantly, the prohibition does not apply to I-9 Employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer.

Labor Code section 1019.2 prohibits an employer from reverifying the employment eligibility of a current employee at a time or in a manner not required by federal law.

Labor Code section 90.2 requires employers to post a notice informing employees of any inspections of I-9 Forms or other employment records conducted by an immigration agency. The posting must occur within 72 hours of receiving the inspection notice, including in a language normally used to communicate work related information.

The posting must contain the following information:

1.  The name of the immigration agency conducting the inspection;

2.  The date the employer received the notice of inspection;

3.  The nature of the inspection, to the extent known; and

4.  A copy of the notice of inspection.

 

The Labor Commissioner is directed to develop a template notice by July 1, 2018. Upon reasonable request, the employer must provide affected employees with a copy of the notice of inspection.

Moreover, the law requires that, except as otherwise required by federal law, employers must provide each “affected employee” (and their exclusive collective bargaining representative, if any) a copy of the agency’s results of the inspection within 72 hours.

The notice must relate to the affected employee only, and contain the following information:

1.  A description of the deficiencies identified in the written immigration inspection results notice related to the affected employee;

2.  The time period for correcting any potential deficiencies identified by the agency;

3.  The time and date of any meeting with the employer to correct any deficiencies; and

4.  Notice that the employee has a right to representation during any meeting scheduled with the employer.

 

The notice must be delivered by hand at the workplace, if possible, or by mail and email if hand delivery is not possible, and must include notice to the affected employee’s representatives, including collective bargaining representatives.

Penalties for failure to comply with the above requirements range from $2,000 to $10,000 per event.

 

California “Bans the Box”

A.B. 1008 amends the Fair Employment Housing Act (Government Code § 12952) to mandate a multi-step process for requesting and considering an applicant’s criminal conviction history until after a conditional offer of employment has been extended. The new law applies to employers with five or more employees, and contains exceptions for farm labor contractors and positions for which an employer is required by law to conduct background checks or restrict employment based on criminal history. Employers must conduct an individualized assessment before rejecting an applicant based on a criminal conviction, including consideration of whether the criminal history has a “direct and adverse relationship with the specific duties of the job that justif[ies] denying the applicant the position,” taking into account the “nature and gravity” of the offense or conduct, the amount of time that has passed since the offense and completion of the sentence, and the nature of the job.

Once the employer has made the decision to disqualify the candidate, the employer must then provide written notice of the preliminary decision to the candidate. The candidate then gets five business days to respond to the notice, and if he or she disputes the accuracy of the conviction history findings, then the candidate gets an additional five business days to respond to the notice. The employer must consider any information from the applicant before making a final decision, which must include: the final denial or disqualification; any procedure the employer has for challenging the decision; and the right to file a complaint with the Department of Fair Employment and Housing (DFEH). The employer may, but is not required to, justify or explain the reasoning for the final decision. Applicants can sue for alleged violations of the provision, requesting compensatory damages, attorneys’ fees and costs.

 

Prior Salary Information

California employers are now prohibited from seeking or relying on an applicant’s salary history as a factor in determining whether to offer employment or what salary to offer. (Labor Code § 432.3.) The law defines “salary history information” to include both compensation and benefits. While the new law does not prohibit an applicant from voluntarily and without prompting providing salary history information, or an employer from considering or relying on a voluntary disclosure in determining the salary for that applicant, it would be difficult for an employer to prove that the disclosure was truly “voluntary and without prompting.” The new law also requires employers to provide the pay scale for the position upon an applicant’s request. Section 432.3, consistent with Labor Code section 1197.5 (the Equal Pay Act”) affirms that consideration of prior salary, by itself, may not be used to justify any disparity in compensation.

 

Parental Leave for Small Employers

The California Family Rights Act (CFRA) provide employees with up to 12 weeks of unpaid leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. The law was limited to employers with 50 or more workers. Under the New Parent Leave Act, the threshold has been lowered to 20 or more employees within a 75-mile radius. Employees are eligible to take leave once they have 12 months of service with the employer, worked at least 1,250 hours in the prior twelve months, and work at a worksite with 20 or more employees within a 75 mile radius. Eligible employees may use paid sick leave for parental leave. If both parents work for the company, leave can be limited to a combined total of 12 weeks and the employer can require the leave be taken concurrently.

 

Cal-WARN Act Applies even for Temporary Layoffs

The federal Worker Adjustment and Retraining Notification Act (WARN ACT) requires covered employers to provide employees and certain agencies 60 days’ advance notice before closing a plant or conducting a “mass layoff” when 50 or more employees at a covered establishment experience a “layoff” during any 30-day period. Covered employers that do not comply with or qualify for an exception may be liable to pay employees back pay and benefits. As is so often the case, California has enacted its own version of the law (Cal-WARN) that has more stringent requirements.

In The International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, Local 998, et al. v. Nassco Holdings Inc., et al., the plaintiffs alleged that their employer violated Cal-WARN by failing to provide notice before ordering about 90 employees not to return to work for four to five weeks. The California Court of Appeal considered whether the furlough constituted a “layoff” triggering the 60-day notice requirement.

In finding that the Cal-WARN Act is broader than the federal WARN Act, the court held that California’s WARN Act requires employers to give employees advance notice of mass layoffs even when the layoffs are not permanent and were less than six months in duration (i.e.., the trigger under the federal statute.)

Fortunately, employers are not required to provide a Cal-WARN or federal WARN Act notice to seasonal employees or employees hired for a limited project, so agricultural seasonal layoffs do not trigger a notice obligation. However, an agricultural operation that intends to permanently or indefinitely shut down part or all of its operations (e.g., shutting down a processing plant or stop growing a particular crop leading resulting in a “mass layoff”) may subject the employer to the statute’s strict requirements.

 

New Harassment Training Requirements

California employers with 50 or more employees currently must provide two hours of sexual harassment training for supervisors every two years. SB 396 expands the subjects that the mandatory supervisor training must include. Beginning January 1, 2018, the two-hour harassment training must include components on harassment based on gender identity, gender expression, and sexual orientation. The training must include specific examples of such harassment. This portion of the training must be presented by trainers with knowledge and expertise in these areas.

SB 396 also requires employers to display a new poster regarding transgender rights prepared by DFEH.

Conclusion

Given the scope of these new laws, employers should carefully review and revise their written policies, procedures, and new-hire packets to ensure compliance.

 

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ORGANIC GROWER SUMMIT: First-time Event Draws Enthusiastic Crowd

January 17th, 2018

With Western Growers as one of its significant sponsors, the inaugural Organic Grower Summit was held in Monterey, CA, in mid-December, with a lively audience and a tech-heavy trade show.

The summit was co-hosted by the Organic Produce Network and California Certified Organic Farmers, with Western Growers serving as the technology sponsor, including hosting “Tech Alley” during the trade show portion of the full-day event. Also featured were six breakout sessions and three keynote addresses, which largely served to quantify the increasing impact organics are having on the food industry.

One of those keynote addresses featured a round table discussion on the organic industry’s attractiveness to investors. Moderator Scott LaRue, an investment banker with Piper Jaffray, told the crowd, which represented all links in the organic produce supply chain, that a stunning amount of capital is heading to the organic sector. He noted that the sector is “on-trend” as it is a central focus of millennials and capitalizes on the healthy eating mega-trend.

While not a perfect fit for public companies because of the volatility of agriculture, LaRue said there is a huge amount of private investment money looking at the organic sector as the next big thing. “It is a very, very active sector on Wall Street,” he noted.

His panelists consisted of three of the larger growers in the western organic produce industry: Grimmway Farms, JV Smith Farms and Mission Ranch. Those firms were represented respectively by Jeff Huckaby, Vic Smith, and Stan Pura. Smith noted that one of the problems with investment money in the produce industry is that investors are typically looking for a quick return while at JV Smith Farms decisions are made with a vision five-15 years down the road. Smith said his firms have done well with traditional bank financing.

Huckaby told the story of how Grimmway has become the largest organic grower in California and probably in the United States. The firm currently has 42,000 acres of organic vegetables under cultivation. He said it is all about using top notch land and finding the right crop rotation to enhance the soil, which improves quality and yield.

Pura discussed Mission’s evolution to become one of Earthbound Farms larger grower partners. The growing entity specializes in organic salad blends. He believes the organic sector has much more room for growth on the supply side as growers are becoming much more efficient. He said 20 years ago, they had 20 percent waste in getting a crop from the field to market. “Now we are looking at only 5 percent.”

Another keynote speaker, Don Barnett of the meal kit firm Sun Basket, discussed why he believes food in general, and organic food in particular, is ripe for disruption. He said many other sectors—from books to electronics to laundry soap—have seen a significant percent of market share grabbed by on-line suppliers. That hasn’t happened yet in the food industry but Barnett believes it will soon.

He argued that his firm answers the question that is top of mind most afternoons for most people: “What’s for dinner?”

He said statistics show that 80 percent of consumers cook at home three to five times a week. With their proportioned meal kits, Sun Basket makes that easier. By January 1, Barnett said all of the ingredients in the Sun Basket kits will be organic. The company is moving in that direction because organic food sales are growing faster than conventional foods and is an on-trend category. With its three distribution centers strategically placed throughout the country, Barnet said Sun Basket reaches 98 percent of the zip codes in the United States, including food deserts that have little access to organic offerings.

Another keynote address witnessed Miles McEvoy, the retired former head of the USDA’s National Organic Program, give a full-throated endorsement of that program. However, he did say it was under-resourced, both by lack of money and people. He said NOP has only a $9 million budget and 35 employees to oversee the 39,000 organic operations around the United States. Last year, they conducted 4,000 investigations, including one that uncovered thousands of tons of grain crops coming into the United States from Eastern Europe falsely labeled as organic product.

McEvoy said the USDA organic seal is extremely important and its integrity must be protected.

The workshops covered a variety of topics with the session on cannabis drawing the largest crowd. Because it is still illegal nationally, cannabis doesn’t qualify to use the USDA’s organic seal, though legitimate growers must use organic methods in their production. No crop protection tools—synthetic or natural—have a cannabis use on the label so a zero residue level of all products is required. The panelists noted that regulations are still being written for the legal production of cannabis and so much change will occur in the coming years. Currently, the crop is regulated by county. Thus Kern County doesn’t allow cultivation, Monterey County requires all cannabis crops to be grown in greenhouses and Humboldt County allows for outdoor crops.

WG Senior Vice President of Strategic Planning, Science & Technology Hank Giclas moderated a workshop on “Clean and Renewable Technology” featuring three firms that are part of the Western Growers Center for Innovation & Technology in Salinas. He said clean ag technology has the promise of offering a positive ROI utilizing such 21st century concepts as getting credits for environmentally-sustainable inputs. He defined clean technology as any product that does not negatively impact the environment.

Solar and wind energy are in this category, which was the focus of the remarks by session panelist Aaron Enz of Alta Energy. His company works companies through the process of interfacing with the 3,000 utility companies around the country. Alta Energy analyzes the energy needs of a company and makes recommendations with regard to their clean energy use, determining what makes sense for each operation. He noted that it is possible to participate in the clean energy world with off-site solar and wind installations. To get energy credit, the installation does not necessarily have to be on your property. He also said that the use of batteries—the same kind that fuel cell phones—will become more prevalent as a power source in the years to come.

Robert McBride of Boost Biomes discussed his firm’s work to harness the power of microbes and microbiomes to protect crops and attack other farming challenges. This technology resonates well with producers of organic crops.

The third speaker was Sean Lyle of PowerGrow, a company that has patented a high-tech glass greenhouse configuration. The facility results in zero waste using waste as an energy source. He said a five-acre installation can produce the same volume of crops that would come from 93 acres.

Other sessions were devoted to sustainable packaging, funding issues facing research in the organic ag sector, soil health and precision agriculture.

WG Executive Vice President Matt McInerney said it was an excellent show from a Western Growers perspective. Many of the organization’s members have added organic acreage and were in attendance. In addition, “Tech Alley” was populated with firms working with Western Growers and its members to use technology to solve some of the industry’s most vexing problems. Technology has made great inroads in many industries and Western Growers is on the leading edge of facilitating technology development in agriculture. He said the firms participating in the show were very pleased with the quality of show attendees.

 

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Small Business Target of Cyber Attackers

January 17th, 2018

open and found an official looking link to a file sharing service (that I am familiar with) asking me to open and review the attachment. Even though this was from someone I know—and trust—the language and lack of detail just seemed a bit fishy (phishy?) to me. Instead of opening the link—I opted to reach out and verify that this was indeed a legitimate email and that a member did indeed wish me to open and review the document.

This is where it gets interesting. I occasionally get these things—as we all do—and when you reach out to verify, they are quickly exposed as the phishing expeditions they are, but in this case, I got a reply that said it was a legitimate request, not spam, please open the attachment.  Turns out—the member email was indeed hacked, they were indeed sending malicious software and in this instance, the “hacker” was responding directly to me impersonating the actual email owner.

I am lucky that I get busy—in this case, I did not see the response for a couple of days and by this time the hacker had moved on—likely to exploit someone else’s email account. The member had discovered the hack and alerted recipients to the identity theft and I didn’t “click” the link. In the grand scheme of cyber threats and attacks, email counterfeiting for the distribution of malicious software may not rise to the same level of attention as major data breaches like Equifax, Anthem, Chase, Target, etc. but the whole thing got me thinking about cyber security, and wondering, how prepared member companies were for the more and more common attacks on small and midsize business that may have insufficient protections and protocols.

How important is cybersecurity and how serious is the threat to small and midsize business, including agri-business?

According to experts like Gartner and Symantec, security researchers see small to midsize businesses (SMB) trending into the majority for attack targeting. Malicious cyber attackers typically find easier exploitation in the SMB community often due to a lack of awareness and preparation. Agriculture’s IT challenges compound this risk even further. No one is immune and the financial impact of incidents can be significant.

Many small to midsize businesses deem themselves too small to be a target and don’t consider the investment in cyber security to be worth the cost but some of the more recent statistics in this area suggest otherwise. For example, more than 50 percent of small to midsize businesses (across all sectors) have experienced some type of data breach in the past year. The average recovery cost for each breach is around $36,000. These are not insignificant numbers.

Why are hackers interested in small to midsize business? Well first and foremost—personal data that can be stolen from a successful breach has value on the (illegal) market. Social Security numbers fetch around $30, date of birth $11, health insurance credentials $20, credit card credentials $6 and the list goes on. If you have this data, you have something of value to exploit. In addition, most small to midsize businesses are not thinking about cyber security and so their protections (internal and external) may be limited and easy to exploit.  Growers and handlers, like other small business should weigh carefully the level of cyber risk they are willing to take on. Many cannot afford to be conservative in cyber risk mitigation particularly if you are handling employee and/or customer data.

“How at risk is your businesses and what would a breach mean to your brand, reputation, or economics?” To effectively answer this question you need to consider the following: What is your current level of vulnerability/risk? If there was a breach (data theft, ransom, etc) what could it cost? Are you comfortable with that level of risk? What would you need to implement and what would it cost to improve your security to a level you were comfortable with?

Working your way through those questions may not be in the wheelhouse of many small business owners. It often takes a practiced eye to spot vulnerabilities and risks. To help us understand, Western Growers has recently started talking to security experts associated with Land of Lakes who offer a robust suite of cyber security services to growers and retailers that are members of their cooperative. Their offerings include a quick, low cost estimate of risk developed through brief company interviews, a fully comprehensive, multi-week, on-site examination that includes detailed reports with specific remediation guidance and even further they can provide a virtual Chief Information Security Officer (vCISO) service that includes the comprehensive assessment and expert, credentialed CISO who will lead security remediation, policy development, training and represent state of security to leadership.

So as we all head into the New Year and an era of increasing cyber vandalism and theft, I encourage you to think through your cyber security and know your risk profile. If you are interested in outside assistance, I would invite you to reach out to me.

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The Evolution of Produce LTL From Inconvenient to Enabling

January 17th, 2018

By Steve Gabrick
C.H. Robinson Regional Sales Manager

 

Today’s supply chains are changing—they are becoming increasingly complex—especially when fresh produce and other perishable commodities are involved. There are many reasons behind this, but consumer buying influences, multi-channel sales, and speed of the order seem to be driving the most change.

Millennials’ buying behavior is highly based on health, convenience and brand. As a result, healthier, more convenient perishable products are being sold through new channels, which is driving the average order size down, frequency of delivery up, and putting greater scrutiny on supply chains. Additionally, retailer, wholesaler and foodservice supply chains are more just-in-time than ever before, holding less inventory in warehouses and distribution centers to increase the speed from field to shelf.

In traditional produce supply chains, the average order size was larger and offered greater flexibility from a delivery perspective. In that model, rolling consolidation and multi-stop load methods proved to be a successful way to execute produce LTL deliveries. Produce LTL transportation was typically viewed as an independent variable in the supply chain, only enabling one component of the supply chain (as shown in the image below).

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Fast-forward to present day. Traditional LTL transportation methods tend to require delivery date flexibility, but with increasingly smaller order sizes, and increased delivery frequency, this can result in erratic ordering behavior. Order quantities will vary a great deal from one order to the next and volume and frequency can be unpredictable, which can have a direct impact on freight spend.

 

Four ways to ease the burden of perishable LTL shipments

Luckily, produce LTL transportation does not need to operate this way. How can shippers make moving fresh LTL freight as easy as possible on their supply chains? Let’s look at four strategies:

1.  Analyze LTL volume: Analyze and leverage all of your LTL volumes, not just what is viewed as “painful.” This will give you a full picture of what needs to be shipped, when, and to where, helping you to create optimized route plans.

2.  Create a planned environment: Utilize forward distribution and traditional rolling consolidation where applicable—with aligned sailing schedules and capacity strategies.

3.  Aggregate volume: Aggregate volume from origin region(s) into destination regions. This will help your shipments move more efficiently and eliminate waste.

4.  Utilize consolidation points: Use forward distribution on a regular cadence. These allow for disparate shipments to be combined together for greater transportation efficiency.

 

As you can see below, with the right model to support your LTL orders, you can achieve greater efficiency across your entire supply chain. The net result is an enabled supply chain offering a way to manage freight spend, change, and risk, all while improving supply chain efficiency.

*****

Ultimately, results can vary by situation. But I’ve seen many companies make this transformation, creating a more efficient supply chain, and allowing them to do what they do best—selling and marketing their great products.

Learn more about optimizing your perishable LTL supply chain by speaking with an experienced C.H. Robinson expert today.

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#MeToo Movement Demonstrates Importance for Sexual Harassment Training

January 17th, 2018

Sexual harassment is not a recent phenomenon. However, recent allegations against high-profile figures in entertainment, media, sports, business and politics show how important it is to address inappropriate behavior in the workplace. Sexual harassment is often downplayed or worse—excused, sanctioned and obscured. It is important to educate your workforce and to establish a culture where any inappropriate behavior is not an option. Training on sexual harassment prevention is a great start.

What is Harassment?

Harassment is defined as unwelcome conduct that is based on race, color, religion, sex, national origin, age, disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile or abusive.

The following are two of the most common types of harassment:

1.  Quid Pro Quo

     In the context of sexual harassment, this phrase (Latin for “this for that”) means requiring sexual favors for job security, advancement or pay increase or other job-related requirements. In this case, the harasser is in a position of power over the victim.

2.  Hostile Work Environment/Abusive Conduct

     Creating a hostile work environment can be perpetrated by any employee, vendor, contractor or customer—not necessarily someone in a position of power. This may include actions such as making sexual comments, telling offensive jokes, using racial slurs, cat-calling, touching, leering at or threatening another, using intimidation, ridiculing or insulting.

Who is Affected by Harassment?

Women in all walks of life are reporting the occurrence of sexual harassment. Why does it seem like women are reporting in such large numbers now? One reason is that since it is getting a lot of media attention there is safety in numbers. The more women report, the easier it is to have your voice heard by those in charge.

The #MeToo movement has primarily focused on professional women in politics, the media and the entertainment industry. However, this movement and sexual harassment in general, happens at all socio-economic levels, such as blue collar workers on the Ford shop floor, food-service workers at McCormick & Schmicks and other low-paying hourly positions where financial insecurity makes reporting harassment a difficult decision.

Although the media attention has primarily focused on female victims, male victims are also increasingly reporting. According to Psychology Today, employers and their co-workers often expect men to conform to traditional gender roles in the home. Those who take on non-traditional gender roles (such as child care providers) or who act in ways that may be perceived as “unmasculine” may suffer harassment and career setbacks as a result.

What Can Employers Do To Be Both Proactive and In Compliance with the Law?

The consequences of not preventing and addressing sexual harassment can be detrimental to a company’s workplace environment and reputation. It is important for employers to take the following steps to prevent sexual harassment incidents and stay in compliance with the AB 1825 and AB 2053 (California’s harassment training laws):

1.  Take an honest look to see if your corporate culture promotes or enables this behavior. Do you foster a respect for all employees and a culture of openness, or does your culture foster secrecy and retaliation?

2.  Exercise reasonable care to prevent or correct inappropriate conduct when you become aware of it. This includes having and posting your sexual harassment policy in a visible location and communicating it in group and one-on-one to your employees.

3.  Provide several confidential options for reporting.

4.  Be sure that you have and communicate a policy to prevent retaliation for reporting.

5.  Take allegations of sexual harassment seriously, and do an immediate, unbiased investigation.

6.  Ensure that you are offering the most up to date, legally-compliant training and vendors to deliver the training to your supervisors and managers and delivering periodic training to your employees.

7.  Be sure to retrain, discipline or fire offenders in a timely fashion.

8.  Ensure that any vendors or contractors that your company employs have a communicated sexual harassment policies and reporting and investigation procedures. Additionally, make sure that their managers are also receiving timely, up-to-date training and that they are training their employees on correct workplace behavior.

Western Growers offers a two-hour AB-1825 and AB-2053 compliant workshop, in both English and Spanish. The training explores the consequences of harassment on the individual and the organization, and provides guidance on how to maintain a healthy work environment. 

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2017: The Year California Burned From North to South

January 17th, 2018

At the time of this writing, the massive inferno of the Thomas fire is finally under control, at 92 percent contained. This fire, the largest in California’s history, has ravaged more than 280,000 acres and destroyed hundreds of homes and businesses—many of which are of Western Growers members. And to top it off, the Thomas fires comes on the heels of mega wildfires earlier this year that engulfed a good chunk of Northern California and burned on the hills of Orange County. Some fire researchers are saying that fire risk won’t decrease anytime soon in California and that more and more homes and businesses will continue to be threatened. We are here to help.

As these wildfires blaze, damage to crops and agriculture-related industries will continue. These type of weather catastrophes can wipe out your profits for the whole year, and Western Growers Insurance Services wants to help you decrease the risk of losing your investment.

You can minimize your damage by taking advantage of risk protection insurance. There are two coverages that apply during a wildfire crisis: Crop Insurance and Weather Risk.

Crop Insurance has the ability to protect the remaining crop as long as the fire (or fires) is not determined to be manmade. Beyond the physical loss of the crop due to the fire, the remainder of the crop could be compromised by smoke damage or smoke taint. Smoke taint will affect the quality of the crop and could present problems at delivery. With a variety of crop insurance products and services available, we can help your operation evaluate each and design the coverage that’s right for you.

In addition to crop insurance, Western Growers Insurance Services offers Weather Risk to provide compensation to a business if it is affected by some defined weather event. This type of coverage can mitigate risks for growing operations and business entities from the effects of wildfires, adverse weather and price decline. If certain defined conditions occur—such as price decline, wind, excessive rain, lack of rain, freeze, excessive heat or other events—the buyer of the insurance will get paid even if they do not incur a loss or suffer no financial loss. This coverage is available to any business including growers, wineries, cooling facilities, fertilizer companies and transportation companies, among others.

A few things to keep in mind when utilizing these coverages:

•   For those impacted by weather catastrophes, it’s important to notify your crop insurance agent of any loss within 72 hours. In addition to contacting your agent, you must put any Notice of Loss in writing within 15 days.

•   The insured can provide Notice of Loss via telephone, email, fax, postal service or in person. After the loss is filed, an adjuster will contact the insured directly to physically review the damage in the block or orchard.

•   In order to prevent delays, make sure that the contact information—especially cell phone number—of the key contact at the growing operation is provided and up to date when you file the loss.

•   The insured is still required to care for the crop if possible and, if notice is given within 15 days prior to harvest, is required to leave representative samples of the crop.

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3 Digital Trends for Ag to Watch in 2018

January 17th, 2018

In 2017, we saw an astounding increase in the number of companies utilizing social media to tell their brand’s story. Industries such as retail, hospitality and tech captivated their audiences by mastering the art of storytelling on free platforms such as Facebook, Twitter, YouTube, Snapchat and Instagram.

Take for example Taco Bell, whose Instagram strategy goes deeper than posting photos of burritos and tacos. The food giant uses bright and creative artwork to highlight their menu items; hosts launch parties for customers to take and post photos of new menu items on Instagram; and coordinates quirky photo shoots with Taco-incorporated clothing to emphasize the fact that Taco Bell is more than just a fast-food chain, it’s a culture.

These types of companies are effectively amplifying their messages through quick videos and imaginative images shot on their phone, creating a loyal fan base and an army of brand ambassadors. In the same way, we in agriculture can use social media to not only increase our connection to consumers, but to influence the public policy agenda that impacts our bottom lines.

One of Western Growers’ goals is to help you tell your story and to provide you with the resources and support needed to start sharing your own tales on the farm with consumers, legislators and other stakeholders. The more storytellers we have, the more people will hear our collective messages.

As we are deep into January and teams are starting to develop and finalize company goals and strategies for 2018, here are some general digital and social media predictions for the upcoming year to help guide your master plan.

 

1.  The Use of Disappearing Videos Will Grow

     Each month, 200 million people use Instagram Stories—the disappearing photo and video collections feature that the company replicated from Snapchat. It’s predicted that by the end of 2018, a majority of Instagram’s 500 million users will be using Stories.

     Additionally, since its launch in 2011, Snapchat has infiltrated the digital world relatively fast. This photo-sharing messaging app racks up 150 million users daily, and Bloomberg suggests that Snapchat will continue to grow at a rapid pace.

     Disappearing videos is escalating. This means that brands interested in connecting with Millennials and Generation Z must take the time to master Instagram Stories and Snapchat.

2.  The Rapid Rise of Influencers

     More companies are starting to invest in social media–based influencer marketing strategies to connect with new audiences. Social influencers—an “everyday” person with a large social media following—can do wonders for telling your story.

     For example, the California Strawberry Commission has hosted numerous blogger tours where they reached out to food and nutrition influencers and invited them to participate in a two-day tour. The event showcased a behind-the-scenes look at the care that goes into strawberry farming in California communities and gave the personalities the opportunity to speak with real farmers and hear their stories. The result? A flurry of social media posts from each of the influencers to their audiences about the importance of agriculture.

3.  Organic Reach is Dying. You Need to Pay to Play.

     Yes, most social media platforms are free. However, Facebook, the largest social networking site with more than two billion monthly active users, requires you to pay to play in order to be heard. To maximize your reach on Facebook, you must invest in advertisements. This will result in ensuring that your current fan base is seeing your posts and will open the door to garnering new fans.

     In 2017, Western Growers started “boosting” our video posts on Facebook. For a small investment of only $3 a day, we were able to target selected demographics to view our videos, such as Californians in the 25-45 age group who have an interest in agriculture and innovation, reaching thousands more people than we would have “organically.” By posting videos and utilizing ads this year, we gained 136 percent more new fans than in 2016 when we weren’t using Facebooks Ads.

 

Conclusion

It’s a brave new social media world, and agriculture must embrace the digital revolution and master all things social media. And it’s not just the brands that need to tap into the power of social networks. Everyone connected to agriculture, from the growers to the businesses that depend on farms, needs to become competent in digital storytelling.

It’s as easy as taking a selfie on the field and posting it to Facebook or writing a short tweet about how a piece of legislation will affect your farm. In this way, ag can better control the online messages being shared about our industry.

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Fed Raises Interest Rates Again; Caution Advised

January 17th, 2018

In the second week of December 2017, Federal Reserve officials decided to raise interest rates. The Fed funds rate was raised from 1.25 percent to 1.50 percent, and along with this change, officials raised guidance on GDP growth to 2.5 percent, up from 2.1 percent forecasted in the September Fed meeting.

Along with this revised guidance, the Fed also indicated there would be three additional rate hikes in 2018, and two more in 2019. This would take the Fed rate up to 2.25 percent by the end of 2018 and to a guided 2.8 percent by the end of 2019. To put this in perspective, a 30-year treasury bond, as of mid-December 2017, yields 2.70 percent. The recent rises in interest rates, along with the Fed guidance for the coming years have many concerned about the yield curve flattening. The yield curve is the yield of fixed-interest securities plotted against the length of time. A healthy curve represents an increasing yield as the length of time is extended out. When a yield curve flattens, one can achieve the same yield buying a shorter term security as a longer term security, thus speeding up the credit cycle and rendering the longer term securities less significant.

Historically, after the yield curve inverts, a recession is not too far behind. Take a look at the following chart from Business Insider. Notice that when the 2-year/10-year spread turns negative, you’ll see a stock-market pullback highlighted by the shaded grey areas.

Janet Yellen, the Federal Reserve Chair, has addressed the flattening yield concern in her latest statements after the recent Fed meeting. “When the yield curve has inverted historically, it meant that short-term rates were well above average expected short rates over the longer run,” Yellen said. “Typically that means that monetary policy is restrictive, sometimes quite restrictive.”

But now, “it could more easily invert if the Fed were to even move to a slightly restrictive policy stance.” Yellen also remarked that market participants have not expressed concern about the flattening trend. “They see the odds of a recession as low,” she said, “And I’d concur with that judgment.”

For now, it’s important we monitor the yield curve and the major risks that can hinder the unprecedented growth the market has seen since November 2016. It’s not time to panic yet, however, as there are many positive economic data points that point to a healthy and growing economy. United States GDP continues to expand from its June 2016 low of 1.2 percent, to where it currently stands as of September 2017—at 2.3 percent and trending upward according to the latest Fed meeting. Other positive indicators include retail sales data (five-year high), consumer confidence trends (highs that we haven’t seen in over a decade), and 10-year highs in new home sales.

Leading economists, as well as economic data in recent months, have suggested that if the yield curve does continue to tighten and eventually reaches a point where an inverse to the yield curve occurs, meaning short term treasuries “out-yielded” long-term treasuries, an economic pullback would not be imminent. To quote Yellen in her recent press conference, “Now there is a strong correlation historically between yield curve inversions and recessions,” Yellen said. “But let me emphasize the correlation is not causation.” This means that just because two things correlate does not mean that one causes the other. At the same time, let us also remember Sir Thomas Templeton’s quote, “The four most expensive words in the English language are, ‘This time it’s different.’”

Posted in January / February 2018 Issue | Comments Closed

Proposed Eastern San Joaquin River Watershed Ag Order Still Includes Nitrogen Reporting Requirement

January 25th, 2018

The California State Water Resources Control Board recently released the second proposed order revising the Eastern San Joaquin Agricultural General Waste Discharge Requirement. This proposal is being considered for adoption on February 7, 2018.

Several impactful requirements in this order, which will become precedential for most all of agriculture statewide, are:

  • Reporting of nitrogen applied and removed at harvest, as well as multi-year ratios.
  • Grower outreach and education.
  • Submission and certification of irrigation and nutrient management plans (with exceptions).
  • Farm/ranch level data reporting.

Western Growers provided written comments on the previous draft proposal and additionally met with State Water Board members regarding concerns with some of the precedential requirements. Western Growers will also be attending the February hearing.

Click here to read the draft order.

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