Driscoll’s Mexico: Advancing Berry Production and Improving Labor Shortages

Ahead of speaking on the Day 1 Opening Plenary session at the World Agri-Tech Innovation Summit in Mexico City this October, Miguel Angel Curiel, Vice President & General Manager at Driscoll’s Mexico shares his perspectives on accelerating berry production, changing labor shortages and benefiting from nearshoring opportunities in the region.

Watch the 12 minute video or read the full transcript below:

How grave is the problem of labour shortages within Mexican berry production? Tell us what the solutions are to fix these challenges?

[Miguel Angel Curiel]: We’re in a macroeconomic environment that has different factors contributing to the demand and the supply of labor. Within this environment, as we get into this nearshoring wave, there’s more demand and labor everywhere. So more than a shortage, I believe there has been an increase in opportunities for people to work now as we are focused on people in rural areas, they are looking for opportunities in the cities, but are also looking for better opportunities from operations and businesses that work in rural areas. For example, the preference of that person lives and works in the rural area to stay at home. The challenge that we have as an industry is to create those conditions that will allow people to stay within their regions. I think the biggest pressure for the agricultural industry is the incentive that people have to move to the cities rather than staying in their areas of origin or in rural areas. Even though there has been pressure, what we see is a trend from leading companies in the industry to improve conditions, salary levels, and to create a dignified working center for people. More importantly, a job that allows people to grow both economic and personal development. So that’s what we’re seeing happening in the industry.

Also, what we have seen in the last two or three years with a lot of pressure for the Mexican workforce and given the macroeconomic conditions, the exchange rate pressure in Mexico is actually going the other way. Today, this has reduced production in several regions and there seems to be an interesting balance between supply and demand of labor for this upcoming season.

How widespread is automation in berry harvesting, and do you see it as the future of berry production, and a solution to labour shortages?

[Miguel Angel Curiel]: Cultural practices in the berry industry specifically have been limited. We are basically producing in a very similar way that we have done in the last 20 years. However, there is pressure in labor availability and the cost of labor, which are two different things. There are also factors in supply and demand, and they are also two different things. I believe that more than the shortage of labor and the increased cost of labor as a component of your total production cost is moving companies to consider technologies that will help in different areas to substitute labor, hard hand workforce, with mechanization first, and automation processes.

This is happening across cultural practices like fumigation or application of nutrients and pest controls. It’s also moving towards weed control, but one area that has been resistant to mechanization or automation has been the harvesting part, and the fruits being so delicate, and susceptible to damage if it’s been handled rough and that has limited projects that have ventured to go into helping substituting harvesting labor for automation. So, we don’t see it today.

As the labor factor increases, we will move more towards mechanization and automation. I believe the break point today as an example, two years ago, labor was 25% of the cost component. Today, labor is close to 50% of the cost component. As this cost increases more towards 65-70%, I believe that the breaking point where mechanization, at the very least, automation, at some point will be necessary for the industry.

To what extent has nearshoring been a positive influence on Mexican agriculture?

[Miguel Angel Curiel]: Mexican agriculture has been in a nearshoring mode for the last 30 years. Since the NAFTA agreement, there has been a natural move from North America mainly, but also with other global companies to produce fruits and vegetables from Mexico, initially for the fall, winter, and as a counter seasonal solution.

In the last 20 years, it started to flow into complementing the supply from the US, where in the fall it continues to be strong in the winter, and also complementing the supply in the US in the spring. So, you have this overlap on perishable goods, mainly between the US and Mexico in the fall and in the spring, where in the summer it’s exclusively almost for production in the US and production in the summer. When you ask people in the agriculture space about Mexico nearshoring, they’ll tell you, ‘Hey, we’ve been doing that for 30 years. There’s nothing now. What is new is the pressure that we’re seeing, once again, in labor demand, where there’s manufacturing operations coming to the border, but also within central Mexico. Border opportunities in Northern Mexico have a demand on the same labor pool that central Mexico has, so as manufacturing companies and automobile supplies and other production happens within central Mexico cities, in the urban areas that is pulling some of the labor that is in little towns in Alico Michoacan or Guanajuato, central Mexico, to move into the cities because they have decent job opportunities. But at the same time being in the city, they’re able to provide their families, security, education and health services that they don’t get at the same level in rural areas. So it is a secondary factor in our business.

You will join the Opening Plenary to discuss enhancing resilience and sustainability in Mexican agriculture. What are you most looking forward to talking about on this session?

[Miguel Angel Curiel]: It’s the opportunity to share what we are doing as Driscoll’s and our vision of the Future of Act. This what we see between how we act in Mexico and by 2030. So it’s sharing that vision in the sector and we definitely moving towards a more sustainable agriculture in Mexico. By 2030, the berry industry will have 100% of plastics in fields recycled. We’re very close in some regions to be 100%, but not nationally. That’s an example of course, water. We have a very good year this year. It’s a rainy year by any means. I believe we’re getting more into El Nino pattern, but that’s only going to last for a while, so we need to continue, even though we’re going to have positive conditions and water availability for this year in many regions, not all of them.

In most regions, we must not let our guard down in the efficient use of water. It’s key to create conditions for workers in the rural area and a dignifying career within. Agriculture is our dream, and our vision is for people to have a passion and desire to be in the agricultural industry. So that is the biggest challenge and for decades we have seen agriculture as basic work, where you come into and move on. We want, we would love, for people to see agriculture as the destination, and not just a stepping stone towards a better life in general. So that’s kind of our goal.