Why Food Prices Are Rising: California AB 1066 and Its Impact on Family Farms

Food prices keep rising because nearly every cost of growing food has gone up at once, and labor is one of the biggest. Beyond standard inflation, state-level policies like California’s Assembly Bill 1066 have fundamentally altered the economics of agricultural labor, impacting both farm revenue and worker take-home pay.

Understanding the real dynamics behind farm gate prices requires looking at labor rules, production expenses, and the unintended consequences of recent legislation.

What Is California AB 1066?

For decades, California agriculture operated under standard rules that allowed farm laborers to work up to 60 hours per week at their standard hourly rate before overtime kicked in. This framework accommodated the extreme seasonality and weather dependencies of commercial farming, where harvests must happen rapidly before fruit drops or spoils.

AB 1066 changed this framework by phasing down the weekly overtime threshold from 60 hours to 40 hours per week. While intended to provide agricultural workers with higher pay, the operational realities on working farms created very different outcomes.

The Unintended Economic Consequences for Farmers and Laborers

Margins at the farm gate are notoriously narrow. Unlike retail stores that can adjust consumer pricing immediately, growers sell into wholesale markets where commodity prices fluctuate based on global supply.

Because of these tight margins, most family operations could not afford to pay time-and-a-half rates for labor over 40 hours. To avoid catastrophic labor costs, farm managers had to make difficult operational changes:

• Capped Weekly Hours: Instead of paying overtime, hours were restricted to 40 hours per employee per week.
• Reduced Take-Home Pay: Farm laborers who previously relied on 50 to 60 hours of steady harvest work saw their total earnings decline significantly.
• Higher Operational Costs: Farms were forced to recruit and train larger part-time crews or pass increased operational expenses along the supply chain.

Read nextWhere America’s Avocados Come From: The 2025 Numbers by Country

Why Avocado Harvests Do Not Fit Neatly Into a 40-Hour Week

From the outside, farm work can look like any other job that could simply be spread across more people. On an avocado grove the work comes in bursts, and the calendar is set by the trees and the weather rather than by payroll.

Commercial Hass is not picked in one pass. The standard practice described in Avocado Production in California: A Cultural Handbook for Growers, Book One is size-picking: a crew goes through the grove taking only the larger fruit first (size 48 and up, roughly 7.5 to 9 ounces each), comes back for at least one more size pick, and then strip-picks whatever is left. Every pass is another round of skilled labor on the same trees. The handbook also recommends picking at least a third of the Hass crop before April to support a good return bloom for the following year, so the timing of that labor affects next season’s crop as well as this one.

Weather adds hard deadlines. According to the same handbook, prolonged spells over 100°F cause fruit drop, temperatures over 105°F in late May or June have been known to drop almost the entire crop of young fruit, and Santa Ana winds on exposed slopes can cause almost complete fruit drop. When a heat wave or a wind event is on the way, the fruit still hanging on the tree is exactly what is at risk, and that is when a grower most needs an experienced crew to work extra hours.

Then there is the size of the trees. An unpruned Hass can reach 50 to 60 feet. Growers have long listed “the tree is too large” among the drawbacks of Hass, because tall trees raise picking costs, make picking more hazardous, and require pruning that adds considerably to production costs. Every one of those items is measured in labor hours.

Labor Is Only One of the Costs Rising at Once

AB 1066 did not land on farms that had room to spare. Water is the other large line item for Southern California avocado growers. The UC handbook records that during the 2007 drought, growers on the interruptible agricultural water plan had to cut deliveries to their groves by 30% or pay stiff penalties, and water districts then raised rates to cover their fixed costs. When the drought was declared over in 2010, the rates did not come back down, which the handbook describes as setting off “a downward spiral of groves going out of business” in San Diego County. By 2012, water cost $1,100 per acre-foot in Fallbrook and $1,300 to $1,400 per acre-foot in the Valley Center Water District. The handbook’s irrigation chapter puts a typical San Diego County grove at about 3 to 3.5 acre-feet of water per acre per year, so at those 2012 prices water alone came to roughly $3,300 to $4,900 per acre.

At the same time, growers cannot simply add those costs to their price. Mexican Hass avocados were first allowed into part of the United States in 1997 and into 31 states by 2001, and in the winter of 2002–03 Chile alone shipped 157 million pounds, more than a third of California’s annual Hass crop. When supply from abroad sets the market, a California grower is a price-taker. We cover that side of the story in what is behind the price on the shelf.

That is how prices can climb at the store while the grower’s share barely moves. The difference goes to packing, shipping, distribution and retail, a gap we explain in farm gate pricing.

Hope on the Horizon for California Agriculture

Recognizing the adverse impact on both farmworkers and agricultural sustainability, legislators in Sacramento are currently reviewing the law. Bipartisan discussions are underway to explore policy updates that genuinely support agricultural labor wages without forcing small family operations out of business.

Balancing fair wages with sustainable farm gate economics is critical for keeping local, domestic food production viable in California.

For a closer look at how the overtime rules played out for the people doing the work, see why good intentions backfired on farmworkers and our comparison of farm worker wages in the US and Mexico.

Follow Our Journey

Navigating modern agricultural regulations is just one part of keeping our family avocado grove thriving. Whether you are curious about tree care, grove irrigation, or the economics of commercial farming, we invite you to leave your questions in the comments below as we continue our mission to save the family farm.

This is part of our complete guide to what it really costs to run a California avocado farm — the grower statement, farm gate pricing, and the numbers behind a family grove.