Farmers and food producers in the Golden State increasingly face high regulatory compliance costs, and the effects ripple through our communities.

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Numerous studies have documented exorbitant and rising regulatory costs of California food production.

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As food safety, labor, and environmental regulations become more stringent, compliance costs continue to rise for local farms and food producers, while imports made under less rigorous standards gain a competitive market advantage.

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Between rural economic challenges and increased water scarcity, many farms and a rapidly growing number of food processing facilities, including Del Monte Foods and Leprino Foods, have closed their businesses or moved them out of California. Consider the following:

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• A 2025 study by researchers at California Polytechnic State University, SLO, found that the regulatory compliance costs facing the state’s lettuce farmers have increased by 1,400% over the past two decades.

• Another study released this past March found that regulatory compliance costs compromise about 8 to 12% of total production costs for wine grape growers.

• California has the highest food production costs in the country. California farmers and food processors endure the highest U.S. labor, fuel, and electricity expenses. 

• The number of dairy farms in California has dropped by 95% since 1950, with less than 1,000 remaining in business today.

• California’s food producers will be hit hard by the new packaging mandate and fees, which will begin to be implemented in August. The effects could be devastating to food businesses and lead to even higher grocery prices. It is estimated that SB 54 could increase grocery costs for families by as much as $1,300 a year.

• The Sustainable Groundwater Management Act (SGMA) is expected to force the fallowing of up to 900,000 acres of irrigated farmland by 2040. This land reduction—up to 20% of the Central Valley’s productive farmland—could cost the agriculture sector up to $2.5–$7 billion in annual lost revenue and result in the loss of up to 50,000 direct and 85,000 indirect jobs. 

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Affordability is the top concern for Californians. It’s also a top concern to those who take pride in helping produce a safe, secure, and nutritious local food supply.

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“Californians continue to be concerned about environmental conditions but Californians are also living at a time that has caused heightened concerns about their cost of living,” PPIC survey director Mark Baldassare told The Sacramento Bee. “How to balance those two really presents the challenge,” for elected officials and policymakers, he said.

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When food production moves out of California, it ends up being produced in other states or countries without the same environmental protections and goals, leading to greenhouse gas emission leakage and failing to support the important progress being made to ensure the well-being of our California communities through a world-class agriculture economy.