US (CA): Labor costs dominate food safety expenses

The California Leafy Green Products Handler Marketing Agreement, commonly known as the Leafy Greens Marketing Agreement (LGMA), went into effect in 2007, the first of a new generation of commodity-specific food safety programs to address microbial contamination in the produce industry (LGMA was developed privately by the industry, but participating firms work with USDA and the California Department of Food and Agriculture to verify compliance.) If firms decide to participate in the voluntary LGMA, they must implement a minimum standard of field-level food safety practices; compliance is enforced by mandatory third-party audits.

A recent ERS report examined the 2012 food safety practices and costs of seven large LGMA participants. The case study looked at total food safety costs for firms in the LGMA, not just the costs of LGMA practices. The study found that labor costs are the primary food safety expense for LGMA participating firms.

Of the five food safety costs measured in this case study, food safety staff accounted for 38 percent of the costs and foremen food safety time accounted for an additional 32 percent. While these cost shares are large, they do not account for the food safety time of other people in the firm with smaller food safety roles.

This chart appears in the ERS Amber Waves article, "The California Leafy Greens Industry Provides an Example of an Established Food Safety System," released in June 2017.