Year Has Bad Start for Berry Farms as Layoffs Hit

Privately owned Dole Food Company, Inc. has just recently laid off 400 employees from its workforce. This is a result of high labor and other business costs related to berry picking. The entire sector is seeing the high cost of operations impacting their financial statements in a negative manner.

Why Are Wages Going Higher for Employees?

When Dole Food needs to calculate its profit margin from business operations, it simply takes the revenue and deducts business costs (product maintenance, employee wages etc.). Normally, when a company is looking to fill vacant employment opportunity, it holds a lot of power when it comes to dictating how much it would pay its employees.

However, in this case, farmers have more power because there is a shortage of available individuals that could fill the position. This has resulted in the offered hourly rate being higher than what Dole Food intended to give its employees.

This is actually a result of the entire industry making big changes within their companies’ business operations. One example is Dole Food laying off over 500 employees last year at two different facilities. All of the workers were represented by the United Farm Workers union.


Dole Food’s competitor, Cal Pacific Specialty Foods, has also been in the same situation. Towards the end of 2017, Cal Pacific laid off more than 300 employees. This occurred after it agreed to sell a facility to Titan Frozen Food.

Since workers are being laid off and potential candidates are seeing this news, they are staying clear of the berry picking and farming segment of the market. Therefore, the market is seeing a shortfall in workers, resulting in higher wages.

Is Now the Bottom in the Berry Picking Market?

Since both Dole Food and Cal Pacific are privately held companies, there could be more changes happening. However, this news is presently behind closed doors since there is no public reporting required. Both companies are in the process of decreasing staff and selling off assets, which means that the goal is to have the best assets that earn the highest margins of operations.

For example, in mid-January, there are an additional 140 employees expected to be laid off by Dole Food. Also, Dole is looking to sell some of its unproductive agriculture lands in Hawaii and California. This signals the possibility of seeing more restructuring in the sector and further job cuts.

Dole has been stuck in a stalled stock offering position, which could mean it is a target for a potential buyer. This could still mean job losses down the line once a transaction is complete because of cost synergies. This is possible since the owner of the company is 94-year-old billionaire David H. Murdock. Rather than having the headache of restructuring, being bought out may be the best solution.



Year has bad start for berry farms as layoffs hit,” VC Star, January 4, 2018.