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Portland Business Journal - Labor fears force many nurseries to scale back
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Portland Business Journal

Labor fears force many nurseries to scale back

Portland Business Journal - September 28, 2007
by Robin J. Moody, Business Journal staff writer

Third-generation nursery farmer Johnathan Lee Lewis was coming off eight years of heady growth and a 300 percent revenue increase when he drafted plans for a significant expansion.

But Lewis's optimism about his Salem business recently waned because of concerns over labor. He shelved plans to invest $500,000 to boost his greenhouse space by 50 percent and another $500,000 to buy new plants.

His 100-acre Salem operation employs 32 full-time workers but must add another 85 workers to harvest and plant trees during peak season, which runs from December to April.

Lewis is feeling particularly anxious about a new Homeland Security rule set to take effect in October that would hold employers liable for false worker documents with elevated fines and possible jail time.

"I can't risk putting this money into an expansion when I don't know whether I'll have the workers to harvest the crops," said Lewis, the 31-year-old president of JLPN Inc.

Lewis' story underscores how Oregon's largest agricultural sector -- the $932 million a year nursery crop industry -- is grappling with the recent crackdown on immigration. Nursery sales, including bulbs, sod, ornamental plants and Christmas trees, comprised about 22 percent of total agricultural sales in Oregon in 2006.

Larger growers are feeling insecure about their ability to hire enough workers, and many are delaying growth plans or even scaling back operations, said John Aguirre, executive director for the Oregon Association of Nurseries, a nonprofit trade association.

Many operators are also exploring ways to mechanize and trim their dependence on human labor.

"It's come to the point now that it's not a question of whether we can afford it, but whether it will allow us to continue key processes," said Pete Brentano, owner of Brentano's Tree Farm LLC in St. Paul, Ore.

For example, leaders at Carlton Plants LLC in Dayton, Ore., have modified several pieces of existing equipment -- a grass swather was retooled to top trees to specific heights and a machine that digs up trees was altered to also serve as a tractor -- to improve efficiency and reduce required manpower.

The value of Oregon nursery sales increased 7 percent between 2005 and 2006, but even with mechanical innovations, labor woes cast doubt on whether such growth will be sustained in future years without immigration reform.

"We feel strongly that Congress needs to act. It's a national economic issue that needs to be resolved so agricultural businesses can effectively plan" for the future, said Bob Boyle, regional vice president for the Northwest Farm Credit Services, a farmer-owned cooperative lender with $120 million in outstanding loans to Oregon nursery growers.

Some regional nursery growers report they've lost so-called "bare root" orders, or sales to growers who re-plant seedlings to sell at a larger size later, because the secondary planters are also worried about getting enough workers.

In this competitive labor environment some owners are thankful for their smaller size.

"The bigger you are, the harder it is to keep track of everyone's legal status," said Ellen Egan, owner of 10-employee nursery Egan Gardens Inc. of Salem. "Small is good sometimes."

National research indicates that as many as 30 percent of agricultural workers in the U.S. are illegal. Oregon's undocumented immigrant population was between 125,000 and 175,000 in 2005, or 4.5 percent of the state's population, The Pew Hispanic Center estimated.

Farmers say few naturalized U.S. citizens seek work on farms, and that fewer high school kids take summer work in the fields than in decades past. A confluence of tightened border security, workplace raids and new regulations have made it more difficult for Oregon farmers to hire workers.

A federal mandate affecting employers who receive so-called no-match letters from the Social Security Administration, which state that a worker's name and Social Security number don't match, has farmers especially concerned. If the no-match issue is not resolved through re-submission of worker information, employers are instructed to take "reasonable steps," which may include terminating the work. Employers say this measure will exacerbate an already-shrinking labor pool and put them in an uncomfortable enforcement role.

Pete Brentano, owner of Brentano's Tree Farm, had previously diversified his nursery by planting 40 acres of broccoli. Labor shortages have him rethinking that decision.

"It was extremely difficult to get that crop harvested this year, to find the people to do it," said Brentano.

rmoody@bizjournals.com | 503-219-3438   Original story

Copyright © 2007 Portland Business Journal

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