Rising costs of regulatory compliance for lettuce growers indicate a 63.7% increase in the past seven years in a study commissioned by Monterey County Farm Bureau prepared by CalPoly San Luis Obispo professors Lynn Hamilton, Ph.D., and Michael McCullough, Ph.D.
This new study updated their regulatory costs study from 2017 with additional regulatory program requirements implemented in the intervening years.
Increased regulatory compliance requirements through 2024 bring lettuce grower total costs of regulation to $1,600 per acre, an increase of 63.7% from the 2017 study and a 1366% increase since 2006 (date of the original study).
This indicates that regulatory costs are now 12.6% of total production costs, while farmgate values for lettuce increased only 0.37% from 2017 to 2024.
Increased regulatory compliance mandates since 2017 come from the Sustainable Groundwater Management Act, Irrigated Lands Program, equipment emissions regulations, and minimum wage and workplace mandates.
Costs of regulatory compliance expenditures were studied for food safety practices and inspection audits, air quality, water quality, crop protection reporting, labor health and safety, and labor wages. Most significant cost increases were in labor health insurance requirements and water quality compliance, while food safety costs remained relatively steady.
While regulatory costs continue to dramatically increase, the farmgate value of crops has only marginally increased to cover the additional costs.
The study “Two Decades of Change: Evolving Costs of Regulatory Compliance in the Produce Industry” was formally released by CalPoly San Luis Obispo today (copy attached to this press release).
