December 3, 2018

Labor tops list of produce processors’ most-pressing needs

By Scott Stuntz | Contributing Writer

What are the most pressing issues facing plant managers today? It’s a difficult question to answer, mainly because there are so many challenges. Whether it’s the newly imposed tariffs making it both harder to produce and sell goods, government regulations or trying to stay on top of the many swirling trends and demands from consumers, facility managers have to be ready for anything.

Nick George has led the Midwest Food Products Association (MWFPA) for over a decade and was with Wisconsin’s Chamber of Commerce before that. He asked around 40 plant managers from across the states his group represents (Illinois, Minnesota and Wisconsin) to identify their top three challenges.

While the managers identified multiple concerns, three general themes rose to the top. Those challenges, in general, meshed with the issues identified by facility managers from by a Wisconsin-based potato grower and produce distributor as well as a California veggie noodle company, which sources its produce from farms in Arkansas, Arizona, California, Massachusetts, Texas and Mexico.

At the top of all the lists was labor.

George said while just finding dependable help is tough, the real challenge is finding skilled labor.

“If you can find a guy who can use a screwdriver, who knows how to weld and who shows up on time, that guy is gold,” he said.

Skilled labor hard to come by

Aside from the perennial problem of just finding dependable workers, George said the added difficulty of finding skilled workers, such as electrical technicians, is made even more challenging because many processing facilities are in rural locations.

That is why the MWFPA is making videos to educate young people in rural communities about the job opportunities at local processing facilities.

Trucking, specifically its rising costs, made the list of Marcus Williams, produce production analyst with Alsum Farms outside of Friesland, Wisconsin. Alsum grows potatoes and distributes a variety of fruits and vegetables, from apple to onions. Alsum also grows potatoes and trucking is something that the potato industry has been looking at closely.

“The current shortage of trucks and drivers has several significant causes,” said John Keeling, National Potato Council executive vice president and CEO. “The reduction in allowable driving hours coupled with the ELD (electronic logging device) mandate means that it requires more time to deliver loads.”

Keeling said that means truckers have to invest more hours of their time to deliver loads and in order to make the same money as they previously did in less time on the road.

“All this makes trucking a less desirable vocation especially when a strong economy offers higher paying jobs at home,” he said.

Trade was also on the mind of processors. While it didn’t make the top three, George said another consistent concern he heard from processors was the recently imposed tariffs, both U.S. tariffs on imported metal, especially tinplate, and European duties on the finished products.

Although an important issue, he said dealing with tariffs really rises above the level of a problem that a plant manager can deal with and are more of a C-suite concern. Regardless ,they are affecting the day-to-day operations of processing.

For example, George cited the woes of the Chippewa Bean Company, which told the Wall Street Journal that it now has $25 million of kidney beans, which were originally destined for European markets, taking up space in its warehouses.

Plant manager’s take

We asked three plant managers to name their three biggest concerns. Here are their answers.

Chris Romano, captain vegetable/chief operating officer, Cece’s Veggie Co.:

  1. Labor. Managing labor costs and availability with perishable inventory will always be the top challenge. Maintaining consistent oversight and being open to process innovation is key, especially when you’re creating a unique product in a way no one else can.
  2. Transportation. Fluctuating and raising freight costs due to not enough drivers, and other factors like changing rules and regulations.
  3. Consumer demand. Anticipating customer behavior and adjusting sales projections accordingly. For example, consumers tend to buy fewer groceries in the summer when their routines change and travel increases.

Marcus Williams, production analyst, Alsum Farms & Produce:

  1. Staffing. More employees leaving the workforce due to retirement combined with an unwillingness to work longer hours means finding enough workers is a struggle.
  2. Changing consumer demand. Meeting changing consumer demands requires time and capital investment.  By the time these demands are met and you earn a return on investment the demands have changed.
  3. Regulation. Low margin industries, like food processing and packing, are having a difficult time complying with increased laws regarding food safety, employee safety, environmental, and financial reporting.

Nick George, president, Midwest Food Products Association

  1. Labor. The lack of skilled labor, in particular.
  2. Regulatory compliance. Namely, wastewater disposal.
  3. Costs. The price of verifying compliance with the Food Safety Modernization Act.

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