Raising state minimum wage rates to more than twice the federal minimum wage rates is expected now or in the near future in many specialty crop-producing states, posing significant financial challenges to U.S. fresh produce growers. With Florida’s basic minimum state wage rates set to reach $15 per hour by September 2026 and California already at $16.50 per hour (United States Department of Labor, 2022)—and farm wages potentially climbing to $19 per hour— labor costs, already a substantial portion of production expenses, are expected to increase considerably. This exacerbates competition with Mexican growers, who benefit from significantly lower wages—roughly one-tenth of U.S. rates—enabling them to price strawberries more competitively, particularly during the U.S. winter season.
As of 2020, Florida’s minimum wage was $8.56 per hour and is expected to reach $15 per hour by 2026 (United States Department of Labor, 2022). In contrast, the increasing wage disparity between the U.S. and Mexico provides Mexican producers a consistent competitive edge, evident by Mexico’s substantial market share—approximately 60% of all U.S. fresh produce imports and 98% of strawberry imports. Higher U.S. labor costs are projected to reduce domestic strawberry supplies by as much as 37%, causing domestic prices to rise by 14% to 30%. Consequently, Mexican strawberry exports to the U.S. are expected to increase significantly, further intensifying competition.
Recent research highlights the financial implications: if the minimum wage increases to $15 per hour, the U.S. strawberry industry could lose $93 million (-5.5%) in revenue (Table 1). Should wages climb to $19 per hour, losses may escalate to $304 million (-17.9%) (Table 2).
To address these challenges, Southeastern U.S. growers are encouraged to proactively adopt strategies to remain competitive. Short-term measures may include advocating for equitable trade policies addressing wage disparities. Long-term solutions require investments in automation, mechanization, and artificial intelligence to reduce labor dependency. Embracing technological innovations, reassessing pricing strategies, diversifying into niche markets, and seeking governmental support or favorable trade policies will be critical to ensuring the long-term sustainability and profitability of Southeastern U.S. strawberry producers in an increasingly competitive global market.
Table 1. Pre- and Post-Policy Minimum Wage Increase: $15/hour Wage Scenario (Lower Bound)
Pre-Policy values | Post-Policy values | Difference | %Change | |
RUSP ($/lb.) | 0.97 | 1.10 | 0.14 | 14.1% |
RMXP ($/lb.) | 1.41 | 1.56 | 0.15 | 10.6% |
MXQ (M. lbs.) | 374.89 | 454.10 | 79.20 | 21.1% |
USQ (M. lbs.) | 1,765.60 | 1,460.76 | -304.84 | -17.3% |
U.S. Revenue (M.$) | 1,699.39 | 1,606.25 | -93.14 | -5.5% |
MX revenue (M.$) | 532.02 | 712.41 | 180.39 | 33.9% |
In this scenario, farmers would pay their crews at the lower bound set by state law—a minimum of $15/hour.
Table 2. Pre- and Post-Policy Minimum Wage Increase: $19/Hour Wage Scenario (Maintaining the Same Margin)
Pre-Policy values | Post-Policy values | Difference | %Change | |
RUSP ($/lb.) | 0.97 | 1.26 | 0.29 | 30.5% |
RMXP ($/lb.) | 1.41 | 1.74 | 0.32 | 23.0% |
MXQ (M. lbs.) | 374.89 | 546.30 | 171.40 | 45.7% |
USQ (M. lbs.) | 1,765.60 | 1,108.48 | -657.12 | -37.2% |
U.S. Revenue (M.$) | 1,699.39 | 1,395.08 | -304.31 | -17.9% |
MX revenue (M.$) | 532.02 | 952.59 | 420.56 | 79.0% |
In this scenario, farmers would maintain the same margin difference relative to the increasing minimum wage, resulting in a wage of $19/hour when the minimum wage rises to $15/hour.
References:
United States Department of Labor [USDL]. 2022. Wage and Hour Division. Washington, DC: USDL. https://www.dol.gov/agencies/whd/minimum-wage/state.
United States Department of Agriculture, Foreign Agricultural Service [USDA‐FAS]. 2022. Global Agricultural Tradesystem. https://apps.fas.usda.gov/gats/default.aspx .
United States Department of Agriculture, Agricultural Marketing Service [USDA‐AMS]. 2022. Run a Custom Report, Specialty Crops. https://www.ams.usda.gov/market-news/custom-reports
The full research paper can be accessed at:
Hammami, A. Malek, Tian Xia, Zhengfei Guan, and Xiurui Cui. “Rising Minimum Wages: Challenges to the US Produce Industry.” Agribusiness (2025). https://onlinelibrary.wiley.com/doi/full/10.1002/agr.22031
Hammami, A. Malek, Tian Xia, Zhengfei Guan, and Xiurui Cui. “Rising State Minimum Wages in Specialty Crop-Producing States: Insights for Fresh Produce Growers.” Southern Ag Today 5(16.5). April 18, 2025. Permalink