POSITION.

♪♪ >> Cathy: MINNESOTA'S UNEMPLOYMENT RATE OF 2.7% IS THE EIGHTH LOWEST IN THE NATION.

THAT'S ACCORDING TO THE LATEST DATA BY THE U.S. BUREAU OF LABOR STATISTICS.

AND WHILE THE LABOR SHORTAGE IS FELT EVERYWHERE, THE STATE'S ORCHARDS AND SMALL TO MID-SIZED FARMS ARE FACING SOME TOUGH CHOICES.

IN PART ONE OF A TWO-PART STORY, REPORTER KAOMI LEE TRAVELED TO DAKOTA COUNTY TO CATCH UP WITH ONE FAMILY WHO IS LEAVING THE APPLE BUSINESS.

>> THIS IS PROBABLY -- ONE OF THE THIS IS, IT'S HARD TO TELL, BUT THIS IS NEW GROWTH.

>> JON PARRANTO AND HIS MOTHER KATHY SHOW ME AROUND THEIR APPLE ORCHARD NEAR LAKEVILLE.

AS FAR AS THE EYE CAN SEE, THERE ARE APPLE TREES, MORE THAN 8,000 ON 25 ACRES IN THE TWIN CITIES SUBURBS.

>> HOW MANY VARIETIES DO YOU GROW HERE?

>> 14, 15, SOMETHING LIKE THAT.

>> ALSO THE UNIVERSITY OF MINNESOTA ONES.

>> AND IT'S FOR SALE, THE ENTIRE 61-ACRE PROPERTY INCLUDING THE MAIN HOUSE AND ALL THE BUILDINGS IS LISTED FOR $2.1 MILLION.

AFTER THREE DECADES, CEO KATHY AND HER SON ARE CALLING IT QUITS.

>> IT IS FOR SALE AFTER ALL THIS TIME.

LIKE 30 YEARS FROM THE TIME WE BOUGHT THE PROPERTY.

PRIMARILY BECAUSE I'M READY TO RETIRE.

>> AT 77, KATHY PARRANTO SAYS OWNING AN ORCHARD HAD BEEN A DREAM SHE SHARED WITH HER LATE HUSBAND.

>> MY SON IS THE ONLY ONE LEFT HERE TO HELP ME AND IT'S JUST NOT ENOUGH.

WE CAN'T AFFORD TO HIRE OTHER PEOPLE TO KEEP RUNNING THE ORCHARD.

>> JON IS THE FARM MANAGER.

HE STARTED OUT WORKING AT THE ORCHARD AS A EENAGER AND THOUGHT ONE DAY HE WOULD SUCCEED HIS PARENTS.

NOW HE DOESN'T WANT IT.

>> I'D KEEP GOING, IT JUST, IT'S EXPENSIVE IS THE MAIN ONE, YOU KNOW, AND THE EXPENSES ARE CRAZY.

ESPECIALLY OVER THE LAST TEN YEARS PRICES AVE GONE UP.

YOU CAN WATCH FROM YEAR TO YEAR YOUR CHEMICAL PURCHASES, INVENTORY PURCHASES, THEY ALL DOUBLED, TRIPLED.

THAT'S MAKING MY PRICES GOING UP TO THE CUSTOMERS.

SOONER OR LATER YOU'RE GOING TO HAVE ZERO NET.

>> ANOTHER PROBLEM IS A LACK OF HELP.

RELYING ON FAMILY AND FRIENDS IS NO LONGER VIABLE.

FINDING AVAILABLE AND EXPERIENCED ORCHARD WORKERS IS NEARLY IMPOSSIBLE.

AND MOM KATHY SAYS THE LOCAL SUBURBAN KIDS JUST DON'T SEEM THAT INTERESTED EITHER.

>> I WENT TO BOTH HIGH SCHOOLS AND I WROTE LETTERS TO BOTH OF THEM TO PUT OUT AN AD UP THAT WE WERE LOOKING FOR PEOPLE.

>> SO THERE'S NOT ENOUGH KIDS WILLING TO WORK.

>> NO, EXACTLY.

>> THE ORCHARD IS PROFITABLE AND HAS LOYAL CUSTOMERS.

THEY COUNT ON BEING ABLE TO PICK THEIR OWN APPLES RIGHT FROM A TREE EACH YEAR BUT A DEEP LABOR SHORTAGE HAS INCREASED THE RISK FOR SMALL TO MID-SIZED GROWERS IN THE STATE.

THE SPRAWLING PINE TREE APPLE ORCHARD IN WHITE BEAR LAKE HAS BEEN OWNED BY THE JACOBSON FAMILY SINCE 1958.

>> RIGHT NOW WE'RE EXPERIENCING THAT THERE IS A LABOR SHORTAGE OR A LACK OF LABOR IN THE AREA THAT WE'RE LOCATED IN MINNESOTA AROUND THE TWIN CITIES AREA.

AND I THINK IT'S TRUE FOR JUST ABOUT ANY BUSINESS THAT THERE IS.

>> WITH A TOTAL OF 150 ACRES OF APPLE TREES THEY'RE ONE OF MINNESOTA'S TOP FIVE APPLE PRODUCERS IN A $500 MILLION INDUSTRY.

THEY RELY ON A FEDERAL PROGRAM CALLED THE H2A TEMPORARY AGRICULTURAL WORKERS.

IT ALLOWS THEM TO HIRE OVERSEAS WORKERS WITH FARM EXPERIENCE TEMPORARILY EACH YEAR.

>> THIS IS NOT IMMIGRATION.

THIS IS A STABLE WORKFORCE THAT WE'RE TRYING TO HAVE.

PEOPLE HAVE TO TRY AND SEPARATE THESE TWO THINGS.

>> IT'S EXPENSIVE AND OUT OF REACH FOR MANY SMALLER OPERATIONS.

PINE TREE APPLE ORCHARD BRINGS IN WORKERS FROM MEXICO AND OTHER COUNTRIES EACH YEAR.

EMPLOYERS MUST PAY FOR HOUSING, TRANSPORTATION, AND A MINIMUM HOURLY RATE SET BY THE FEDERAL GOVERNMENT.

IN MINNESOTA, IT'S $18.50 AN HOUR.

>> IT'S BEEN GOING UP SINCE WE'VE BEEN INVOLVED.

IT NEVER STABILIZES, IT'S ALWAYS BEEN GOING UP.

AND WITHIN THE LAST FOUR YEARS IT'S GONE UP FIVE DOLLARS PER HOUR.

>> AMERICANS GET PRIORITY OVER THESE JOBS AND EMPLOYERS HAVE TO SHOW THEY'VE EXHAUSTED ALL OPTIONS TO HIRE THEM.

BUT IN MINNESOTA OFFICIALS SAY THERE IS A .4 UNEMPLOYED WORKER FOR EVERY JOB VACANCY.

JACOBSON SAYS THE INTENSIVE OUTDOOR LABOR JOBS AREN'T FOR EVERYONE AND INCREASINGLY, FEW AMERICANS.

>> I THINK ABOUT 20 TO 25 YEARS WE'VE BEEN INVOLVED WITH THE H2A PROGRAM AND WE'VE ONLY HAD ONE PERSON COME OUT AND APPLY FOR A JOB.

>> H2A WORKERS ARE HELPING FILL THE GAP, EMPLOYER JACOBSON IS WORRIED.

>> THE ABILITY TO GET WORKERS, TO GET WORKERS ON TIME.

MOST OF OUR WORKERS DO COME FROM MEXICO BUT WE GET WORKERS FROM ALL OVER.

>> E SAYS SOME OF THE ROAD BLOCKS CAN ONLY BE FIXED IN WASHINGTON.

>> THERE'S A LOT OF DIFFERENT ISSUES WITH THE H2A.

THERE'S WAGE ISSUES THAT GET TIED TO IT, THERE'S SOMETHING CALLED ADVERSE WAGE RATE.

>> IT'S THE MINIMUM WAGE SET BY THE US DEPARTMENT OF LABOR FOR H2A WORKERS.

IT VARIES BY STATE.

SOME MINNESOTA GROWERS SAY THE STATE'S $18.50 WAGE RATE IS ARBITRARY.

A RESPONSE TO THE EFFECT OF THE WAGE RATE FROM THE DEPARTMENT OF LABOR WAS NOT RETURNED BY AIR TIME.

FEDERAL LAW EXEMPTS OVERTIME FOR AGRICULTURAL WORKERS BUT SOME STATES LIKE MINNESOTA DO NOT.

HERE MANY AGRICULTURAL WORKERS QUALIFY FOR TIME AND A HALF AFTER 48 HOURS.

JOHN JACOBSON SAYS LABOR ACCOUNTS FOR 70% OF HIS PRODUCTION COSTS.

>> OTHER STATES DON'T HAVE THE OVERTIME ISSUE SO WISCONSIN AND MICHIGAN WORKERS CAN WORK AS MUCH AS THEY CAN AND THEY DON'T HAVE TO PAY TIME AND A HALF.

>> SO THAT'S AN UNFAIR ADVANTAGE YOU'D SAY?

>> ABSOLUTELY IT DOES, AS FAR AS THE APPLE GROWERS OR VEGETABLE GROWERS.

WHEN THEY TRY TO SELL THEIR PRODUCT TO A GROCERY STORE CHAIN OR WHOEVER THEY CAN PRODUCE THEIR PRODUCT LESS THAN WHAT WE COULD IN MINNESOTA.

>> DECREASING MARGINS IS ONE REASON KATHY PARRANTO'S KIDS ARE MOVING ON.

THEY'VE CULTIVATED A COMMUNITY AT APPLEWOOD ORCHARD OVER THE YEARS.

SHE SAYS SHE HOPES THAT WILL CONTINUE.

>> I THINK THAT'S ONE OF THE REASONS PEOPLE LIKE TO COME BECAUSE THIS IS MINNESOTA AND MINNESOTA