Rising Costs Squeeze Specialty Crop Growers’ Profits

By Andi Anderson

Specialty crop growers across the United States are facing intense financial strain as rising input and labor costs continue to outpace crop prices, eroding profit margins and increasing uncertainty across fruit, vegetable, and nut markets.

According to American Farm Bureau Economist Daniel Munch, specialty crops — which include more than 350 commodities from almonds and apples to lettuce and lemons — represent over $75 billion in farm-gate value, accounting for a third of total U.S. crop sales.

However, these producers face limited access to federal risk management and safety-net programs designed for major field crops.

“Each crop relies on distinct production systems, marketing channels and labor demands, making it difficult to design one-size-fits-all safety nets,” Munch explained in the latest Market Intel report.

Labor remains one of the biggest challenges. In 2023, specialty crop farms averaged $466,000 in cash expenses, with nearly 40% spent on labor — an increase of 60% since 2021 and more than six times the national average for all farms.

At the same time, input prices have soared: pesticides are up 25%, fuel 31%, fertilizer 37%, and labor costs nearly 50% since 2020.

While some crop prices have increased — fresh fruit and melons rose about 20% — these gains have not offset rising costs. “Even in sectors where prices have climbed, those gains have been far outpaced by production expenses,” Munch wrote.

Insurance options also remain limited. Roughly 43% of fruit and nut acreage and 47% of vegetable and melon acreage remain uninsured.

Specialty crops generally do not qualify for Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC), leaving growers dependent on ad hoc relief programs.

Disaster programs like USDA’s Emergency Relief Program (ERP) and Supplemental Disaster Relief Program (SDRP) have been slow to assist specialty producers.

Because these crops lack standardized yield or price data, they often fall into “Phase 2” of disaster payments, requiring lengthy manual verification. So far, specialty growers have received only 8% of SDRP payments, despite accounting for nearly 20% of 2024 crop losses.

Recent legislation, including the One Big Beautiful Bill Act (OBBBA), has expanded premium support for insurance, but reforms specific to specialty crops remain pending.

The proposed Farm, Food and National Security Act (FFNSA) aims to address these issues through new advisory committees, improved policy development, and investments in automation to reduce labor risk.

“Timely disaster assistance, stronger data collection and expanded risk management options are essential,” Munch emphasized. “These steps can help ensure the nation’s fruit, vegetable, nut and horticulture producers remain competitive in an era of high costs and heightened risk.”

Photo Credit: pexels-karolina-grabowska