Crop Harvesting, Primarily by Machine

SIC 0722

Companies in this industry

Industry report:

This industry encompasses establishments primarily engaged in mechanical harvesting, picking and combining of crops, and related activities, using machinery provided by the service firm. Crops undergoing mechanical harvesting include berries, fruit, cotton, grain, nuts, sugar beets, sugarcane, and vegetables. Companies that provide threshing, combining, silo filling, and hay mowing and baling services are also included in this classification. Farm labor contractors providing personnel for manual harvesting are classified in SIC 0761: Farm Labor Contractors and Crew Leaders.

Industry Snapshot

This industry is comparatively small, and it is dominated by family-owned companies. Crop harvesters, both manual and mechanical, are directly reliant on the economic fortunes of the American farming community, the sole client of the harvesters. Although U.S. farmers suffered along with the rest of the population during the economic slowdown of the first decade of the 2000s, by 2010 some experts saw increased farm revenues and a more positive future on the horizon.

Organization and Structure

American agribusiness is a huge, diversified industry and encompasses several specialized sectors. Besides the farmer (also called the grower), who manages the land and cultivates the crops, there are industries based around companies that harvest, process, distribute, and transport farm products and farm supplies. There are also industries based around companies that supply materials and services to the farmer. Contract or custom harvesters are part of the former group.

It is increasingly common for farmers to enter into contracts to sell their produce before it has matured. Contract farming is an arrangement with a buyer, such as a food processor or marketer, to sell and ship the produce to the buyer upon harvesting. The custom harvesting company may be an intermediary part of this arrangement. If the company has been contracted to do the harvesting, it may also make the arrangements for selling and shipping the product to the buyer on the grower's behalf.

The farmer agrees to a price at the time of the contract. This arrangement can benefit either the grower or the harvester/buyer, depending on supply and demand of the particular type of crop at harvest time. For example, if there is a nationwide bumper crop of green beans and the farmer is selling green beans, the farmer may get a higher price for the crops with a contract than if he or she waited for the harvest and bid with many other farmers waiting to sell their beans. If crop production is low, creating high demand, the buyer comes out ahead because the farmer could have sold for a higher price, had he or she known there would be a smaller supply. The custom harvester, having agreed to buy a crop at a certain price before it has matured, is subject to similar losses or gains.

The custom harvester contracts production with the food processor. The contract specifies the delivery of tons of produce per day, which fluctuates according to weather conditions or other variables. The custom harvester also contracts with the grower to produce the crop. The harvester begins working with the grower when it is time to plant the crop. The harvester's field representative works with the grower to coordinate various facets of the planting process. For the harvester, this is to set standards for the crop and ensure quality control. The field representative delivers the seed and develops the timing for planting, fertilizing, and harvesting the crop. The grower pays for the seed, because it is held against his or her account when the grower is paid for the harvested crop.

Large harvesters generally have a variety of equipment that enables them to harvest the crop of their choice. They harvest with their own machinery, load the produce onto their own semi-tractor-trailers, and ship it to the processor. Large contract harvesters also have trucking and communications systems in place. These systems are crucial because, in order to fulfill the contract with the processor, the harvesting company may have to send trucks, equipment, and harvesting crews to different states for harvesting jobs. They go wherever they need to to fill the packing window. Weather can determine the order in which the harvester chooses the farms. Timing is crucial, because each crop matures at a different rate and must be harvested at its peak. Increasingly, harvesting companies use computers to track the planting dates, varieties, and pesticides (herbicides, fungicides, insecticides) used by different growers. The time frame for a harvesting job can range from a few days to two weeks, depending on crop, terrain, and size of acreage.

Mechanically Harvested Crops.
In deciding whether to harvest mechanically or manually, farmers must consider what type of crop and plant is being harvested. Grain crops are harvested mechanically. A vegetable crop, however, is usually harvested mechanically only if it is a hardy variety or if it is not intended for the fresh market. Many fruits and vegetables, especially citrus fruits, are harvested almost exclusively by hand because they must arrive on the fresh market in perfect condition, and mechanical harvesting can scratch or bruise produce. Damage is a major concern of reap harvesting. Damage is usually minimal if the harvesting equipment is kept clean and adjusted correctly for the crop. Even with hand harvesting, however, machinery, such as conveyor belts, is usually used to transport the fruit from the field, to cool it, and perhaps to wrap it. Farmers may also choose to harvest by hand if they have secured a high price for their crop and can afford manual labor. They may combine their options within the same crop, picking large, mature vegetables first by hand for the fresh market and then bringing in machinery to harvest smaller vegetables for sale to a processor.

Time is also a major consideration. If farmers need to harvest quickly, they will need to harvest mechanically. In deciding whether to harvest by themselves or to contract with a custom harvester, farmers have another set of factors to consider. If the farmers have a lot of acreage, they may own a combine harvester. Often, they will make arrangements to harvest the crops of their neighbors as well. If the farmers grow grain and do not have enough acreage to justify making the capital investment in a combine harvester (about $120,000), they will need the services of a contract harvester.

Convenience and assistance may be a factor as well. Farmers may find it easier to have the input of the custom harvester in determining crop planting, timing, harvesting, and sale issues. Even if the farmers do own a combine harvester, they may still contract a custom harvester. One reason is that the window of opportunity for harvesting is small. Farmers may need to get grain out of the field immediately or risk losses because of bad weather, for example. If they don't have the capacity to do the job themselves, they may seek help from a custom harvester.

Equipment.
The combine harvester used for grains tends to be different from the one used for vegetables, although the manufacturers strive to make the machines more interchangeable through modifications. Harvesting machinery is generally classified by crop. A harvester must be adjusted to harvest a specific crop and to keep trash out of the load. A grain harvester is called a combine harvester because it cuts, threshes, and cleans grain in one operation. Corn is harvested by mechanical pickers that snap the ears from the stalk so that only the cobs are harvested. Stripper-type cotton harvesters strip the entire plant of both open and unopened bolls. Hay and forage machines include mowers, crushers, windrowers, field choppers, balers, and grinders.

Root crops such as potatoes are harvested with diggers, which often pull up rocks and unwanted vegetation with the potatoes. Some machines can sort this trash out, while other machines carry people who sort it by hand. Sugar-beet harvesters lift the whole root from the ground, clean it, and deliver it to a bin. Vegetable crops such as broccoli, asparagus, celery, lettuce, and cabbage are still harvested largely by hand.

For the fresh market, some vegetables and nearly all fruits are still harvested by hand. For processing, drying, and occasionally for the fresh market, mechanical tree and bush shakers with catching belts, bins, pallets, and electric lifts reduce harvesting and handling labor.

Background and Development

Some custom harvesters are family-run outfits that started as growers, purchased expensive harvesting equipment, and entered into agreements with other local farmers to harvest their crops. They are likely to grow crops and maintain livestock in addition to their harvesting operations. Others are large and sophisticated operations that coordinate production with the grower from planting to sale and delivery.

The history of mechanical harvesting itself dates back to Cyrus McCormick's marketing of the mechanical reaper in the early 1840s. The reaper could harvest grains only; mechanical harvesters for root and vegetable crops weren't invented until the 1930s. McCormick's invention was an important part of the agricultural revolution that began in the eighteenth century.

The agricultural revolution dramatically increased a farmer's ability to produce crops. The technique of crop rotation allowed farmland to be used continually. Machinery allowed ever larger areas to be worked, and farmers increased their acreage. When mechanical harvesters and other devices were created to do formerly manual labor, production increased to a level that surpassed national consumption. The McCormick reaper permitted the cultivation of the vast Midwestern plains states.

The proportion of human labor used in the production of farm goods dropped by measurable degrees as a result of farming advances, while capital spending on feed, machinery, fertilizer, and other farming staples increased dramatically.

Farmers now rely heavily on specialized technology to sustain and increase production. Farmers are also highly dependent on outside sources for their equipment and services, such as custom harvesting. Because of these specialized interrelationships, farmers and the businesses that support them have also necessarily become increasingly sophisticated in their cash management techniques.

In the late 1990s, efforts to develop new machines to facilitate the labor-intensive harvesting of crops intensified. In Florida, for example, providers of citrus for the production of juice faced labor shortages, and exploration of mechanical harvesting options became necessary. The most promising type of mechanical harvesting system appeared to be the "continuous canopy shake and catch," which resulted in up to a 75 percent decrease in harvesting costs. These systems were appropriate only for fruit destined for juice production, as fruit for fresh consumption would suffer from too much damage from the machinery.

Because this industry sustains itself by providing services to farmers, it is affected by many of the same economic, climactic, and industrial conditions that affect farmers. The early years of the first decade of the 2000s saw a slight improvement in the American farm economy, after three years of decline in the late 1990s. Net farm cash income was more consistent and higher than in previous years. Farmers who stored grain were able to take extra advantage of relatively high commodity prices. After grain reserves reached historically low levels in 1993-94, producers expanded their crops to keep up with increased national and international demand. By 2006, cash receipts from the sale of crops by U.S. farmers totaled $122.3 billion.

In 2003 about 10.3 billion bushels of corn were produced, a significant increase over the 2002 crop of 9.01 billion bushels. Wheat production fluctuated dramatically in the early years of the first decade of the 2000s as well. After falling to 1.9 billion bushels in 2001 and to 1.6 billion bushels in 2002, wheat production rebounded to 2.3 billion bushels in 2003. Soybean production dropped 12 percent in 2003, falling to 2.42 billion bushels, its lowest level since 1993.

In 2001 farmers spent a total of $25.4 billion on farm services, up from $23.5 billion in 1996. This figure covered all farm services, not only expenditures for the mechanical harvesting of crops. Also in 2001, according to the U.S. Department of Agriculture (USDA), expenditures on tractors and self-propelled farm machinery remained steady at $5.4 billion, although by 2004 this figure had jumped to $8.7 billion. Spending on other farm machinery increased from $3.6 billion in 2001 to $4.3 billion in 2004. These figures suggested continued use of mechanical harvesting equipment on U.S. farms throughout the 2000s.

Current Conditions

The trend toward increased spending on farm services continued as the country neared the second decade of the twenty-first century. According to the USDA, total expenditures on farm services in 2008 equaled $38.0 billion, a figure that represented 12.4 percent of total farm production expenditures. U.S. farmers spent $11.4 billion on tractors and self-propelled farm machinery that year, more than double the amount in 2001. Expenditures on other farm machinery also increased, though not as significantly, reaching $5.9 billion in 2008.

Corn remained the largest U.S. grain crop in the late years of the first decade of the 2000s. In 2009, a record 13.2 billion bushels of corn were produced. U.S. farmers also harvested 3.36 billion bushels of soybeans, 2.21 billion bushels of wheat, and 383 million bushels of sorghum. Although the value of crops continued to increase, some of the farmers' profits were offset by higher energy and production costs. Nevertheless, total cash receipts from the sale of all crops in 2009 equaled $166.3 billion.

Industry Leaders

According to Hoovers Inc., leaders in the mechanical harvesting services industry in the early 2010s in terms of revenue included Noblesse Oblige Inc. of El Centro, California, with 2009 sales of $67 million; P.R. Farms Inc., of Clovis, California, with annual sales of $25 million; and Jack Klein Trust Partnership of Stockton, California, with sales of $17.4 million in 2009. Other companies engaged in providing mechanical harvesting services were geographically clustered in agricultural regions in such states as Texas, Kansas, Oklahoma, Indiana, Wisconsin, and Florida.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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