On March 20th, I’ll be speaking to the El Dorado Wine Grape Growers’ Association. They’re a great group – they always have a lot of great questions and they're great at sharing their knowledge with each other and me. They also put me up in the Cary House, a nice, old-timey hotel in downtown Placerville, which might be the most underrated town in California. And it's a real place, unlike El Dorado's mythical namesake.
Map to a very different El Dorado:
My presentation is going to focus on the coming “Grapepocalypse” and what it means for El Dorado growers. I was doing some research in anticipation and found some interesting information on labor rates in El Dorado. Not sure if if any conclusions are generalizable to the rest of the Sierra Foothills, but here it is for what it’s worth, I found some interesting surprising. Take a look at a couple of charts with some explanation and analysis.
Vineyards w/Employees vs. No. of Vineyard Workers Countywide vs. Total Vineyard Worker Payroll, 1990-2017
Before I jump into the data, let me say that it looks spotty. According to the data, provided by the California Employment Development Division, there are only 8 vineyards in El Dorado County that pay vineyard workers over $100 in payroll per month. Even if we assume there is a little bit of under-the-table payment, this seems quite low. Perhaps some vineyard owners classify their workers in other ways, like “Farm Managers.” Looking forward to asking the growers themselves.
OK, with that caveat out of the way, it looks like the number of vineyards is falling (blue line). This conclusion holds up, even if there is under-reporting, so long as the level of under-reporting is constant. I’ll ask about that. If the number of vineyard establishments is falling, it wouldn’t be surprising. Economically farming El Dorado vineyards is a difficult job. That fewer operations would keep their farm gates open over time may well be the case. Bearing acreage numbers have actually been rising by a few percent every year for the past few years, so if the number of vineyards is falling, then (a) vineyards operations are consolidating; (b) new plantings tend to be larger; and/or (c) established vineyards are expanding their total block acreage.
Payroll size, in dollar terms, looks to have moved in tandem with the number of vineyard workers in the county. These numbers moved toward a peak in 2003 and then began falling. But those numbers did not move in tandem with grape sales.
Total Payroll vs. Grape Sales vs. Weekly Vineyard Worker Pay (Constant, 2017 Dollars), 2008-2017
These numbers also come from the EDD. Weekly vineyard worker pay looks to be pretty steady in the long-term. Judging by the low rate, most workers are generally working considerably less than a full-time, 2000 hour work year.
Though the number of workers has been falling, revenues have actually been rising, driven by increasing bearing acreage and prices, which have been steadily, but slowly, increasing. El Dorado farmers, unlike their colleagues in nearly every other winegrowing region, seem to have been able to decrease labor costs, while increasing revenue.
What is going on here? A couple of theories:
Maybe we are seeing more very small vineyards, where owners are simply opting to do the work themselves;
Maybe we are seeing larger operations, with more efficient configurations and operations that are getting more work done per dollar of wages paid;
Maybe we are seeing an increase in mechanization;
Maybe in the back-and-forth over prices between growers and producers, the compromise is to put less labor into the grapes, in order to keep prices reasonable.
Yep, not many answers here, just more questions. But I’d like to learn what’s going on. Labor is a huge issue for this industry right now. When I see figures like this, I want to know: Is this real? If it is, how is it happening? Can it be replicated?
Feel free to weigh in and let me know what you think or show up at the meeting.
UPDATE: After getting some local feedback, I've posted this update.