Nine years ago, with labor costs increasing and availability shrinking, Larry Jacobs, an organic grower and shipper based in Santa Cruz, Calif., saw the writing on the wall.

“In 2016, it became really obvious that we are going to need to find some solutions to this labor thing,” Jacobs said during a panel discussion at the Organic Grower Summit, Dec. 4 in Monterey, Calif.

Jacobs decided to turn to automation, but finding the right fit for his farm was not easy. “We started looking at what the tech world was doing, thinking automation for specialty crops must be coming,” he said.

Today the diverse fruit and vegetable farm is among thousands of Western farms to invest in automation, and, Jacobs said, the investment is paying off. “We are starting to use some of these things and seeing that they’re helping cut our labor costs,” he said.

With innovations in ag technology coming at growers at a rapid pace, knowing if, when and how to invest in technology is a complex, at times daunting question for growers struggling with high labor costs and short supplies. But promises of reduced labor and increased efficiencies are driving an embrace of the innovations.

A 2023 report from Western Growers found that growers are now spending an average of $500,000 a year on automation in response to ag labor shortages. Further, the Western Growers Specialty Crop Automation Report showed a dramatic year-over-year increase in ag tech investment of 25 percent between 2022 and 2023.

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Jacobs’ first foray into ag technology involved purchasing a “harvest helper.” “That is our biggest cost,” he said of harvest operations. “That is what we spend most of our time on.”

Today, that investment has cut the costs of transporting boxes from the middle and edges of fields to the ends of rows by 15 to 30 percent, depending on the length of the row.

Jacobs said that before he invested in the technology, he visited fellow farmers who were utilizing ag technology. “I saw what they were doing, I looked at some of the equipment and I thought, this just might work. And there was a question of how inexpensively I can get in and try this, and I was surprised. The price point was pretty low, and we jumped in,” Jacobs said.

“I’m much less risk averse to trying something for 15 grand, and if it ends up that I don’t use it, I can live with that,” Jacobs said.

Up-front costs

Unlike what Jacobs found, in many cases, the price point for investing in ag technology is anything but low and often carries significant risk, particularly given the relatively short shelf life of ag technology.

Related:Tech a labor-saving solution for organic growers

“When we first got into this, we thought the technology would last three or four years before we had to worry about (new technology replacing the old). It’s not,” said Bartley Walker of Pacific Ag Rentals, a company that rents out ag technology equipment. “It’s 18 months if not shorter before someone else comes out with something lighter, something stronger, something better.”

Adapting innovations to older machinery can sometimes extend the usefulness of older technology, he said, but not always. Often, the latest innovations aren’t adaptable to older technology. Also, panelists noted that technologies often don’t interact with one another, creating a silo effect with the different platforms and depleting their usefulness.

Still, Walker said, “At some point, farmers have to make the decision to go out and try it and see it. That is why I think the rental model works so well. Ownership is overrated.”

Daniel Bernstein, CEO of Reservoir, an impact-driven venture capital firm and ag tech incubator, noted that while much of ag technology is concentrated on developing large machinery for Midwest scale corn and soybean operations, there is a place for incremental advancements in farm productivity within the utilization of relatively inexpensive technology and the industry is seeing more of that of late. “There is a whole space in the ecosystem for significantly less expensive implements and machines for companies that are not taking on as much venture capital. And we really want to be investing in those companies,” he said.

But it is important to realize, he said, the significant contributions the $1 million-plus machines are providing ag tech, in part because of the investment expectations of venture capitalists, which are helping drive advancements in the field.

One addition to the field of ag technology panelists said they would like to see is a clearing house of information on the thousands of pieces of ag technology that are out there. “These sorts of things exist in other areas of technology, but in the ag technology sector, that is a total black box right now,” Walker said. Without this, it can be difficult to determine where to invest your ag tech dollars, he said.

Profound need

The fact that investments in ag technology for specialty crops continues to expand can be traced in large part to a profound need to develop solutions to the costs and shortages of ag labor.

Walt Duflock, vice president of Innovation for Western Growers, noted that California farmers hire 850,000 unique farmworkers every year, accounting for 425,000 full-time equivalent farmworkers. On an economic basis, farmers are paying $16.3 billion for 850 million hours every years, adding up to an average costs of over $20 an hour.

“We have a massive labor cost element hitting ag right in the head,” Duflock said. “And it keeps going up because domestic labor keeps getting harder to find.”

Also, Duflock said, labor lawsuits targeting farms have increased tremendously in the past 20 years, adding to the risks and costs of farm labor.

“What kind of costs do you spend on a $1 million lawsuit?” Duflock asked. “Can you spend $500,000 of that on robots and cut down on your labor? I think the risk of litigation may continue to push growers to look even harder for new technology.”

In addition to reducing labor needs, ag technology, in some cases, can help with worker retention, according to Jacobs, who noted that his workers enjoy working with the harvest helper, particularly as they became more familiar with it.

“We really focused on how we can provide tools to our team to reduce their time doing things and how do we make them more efficient, and how we can make it more fun for them to help us hold on to people,” Jacobs said.

Often, panelists said, a farm doesn’t see immediate benefits when investing in new technology, but if they stick with it, they will eventually see a return on investment. Walker noted, for example, that six years ago, his company lost money for the first few months after introducing an automatic weeder to a farmer’s operation.

“We found out how not to do it,” Walker said. “But that was six years ago. We had to evolve.”

Now, Walker said the farm, which has continued to rent from his firm and has since added a tech position to its organizational chart, has lowered its overall weeding cost because of the technology.