The key findings of a recent study on farm labor are nowhere near surprising. Researchers reported a declining supply of domestic farmworkers, rising wages and labor shortages, increased mechanization and the rise of H-2A labor.
At the most recent Great Lakes Expo, Dr. Zach Rutledge, Department of Agricultural, Food and Resource Economics at Michigan State University, spoke about farm labor scarcity and adaptation strategies. His work is based upon a survey of farmworkers in the U.S. – how many, where they are and in what industries. About 1,300 farms were surveyed (with about three-quarters of respondents based in California).
Rutledge reported that in the ag sector, 70% of workers today are foreign born, and of that number, 90% hail from Mexico. Of those foreign workers, nearly 41% are unauthorized to work in the U.S. Additionally, 66% are male and their average age is 41.
“This is important because there was a decline in the number of Mexican immigrants between 2010 and 2020 for the first time in American history,” Rutledge noted.
He added, again unsurprisingly, that the supply of domestic farm labor declining – partially because there are better opportunities in non-farm sectors of the U.S. job market. There are also lower birth rates in Mexico. And until recently, he said, there was tighter border security.
Additionally, “follow-the-crop” migration within the U.S. has declined. Workers don’t like to be as transient as they once were. The domestic workforce is aging. Farm wages, like those in most other sectors of the economy, continue to increase too.
However, average annual ag employment is relatively stable. There are 1.2 million full-time equivalent positions in the industry nationwide and that number has remained fairly stable over the past few years.
How is the domestic labor supply falling but ag labor is steady? The growth of the H-2A program, Rutledge answered, from about 80,000 workers in 2010 to about 310,000 in 2021. He broke down where those farmworkers are going: 53% of H-2A laborers are direct hire crop; 34% in ag support services; 4% in direct hire animal; less than 1% in direct hire forestry; and all other sectors make up the remaining 8%. Large employers are the primary users of the program, but definitely not the only ones. Rutledge thinks demand for H-2A will continue to rise as well.
With farm wages rising, Rutledge noted basic economic theory says that rising labor costs should induce a shift out of labor use into other inputs – the substitution effect. Some possible options for substitution include automating labor-intensive tasks; adopting technologies that complement workers and increase efficiency; switching to less labor-intensive crops; and/or changing cultivation/labor management practices.
A total of 67% of those surveyed said they adopted a new labor-saving technology in the past few years, with 25% reporting they used a mechanical harvest aid in 2020.
“Why adopt technology?” Rutledge asked. “Eighty percent said they did due to labor costs. About 40% said it was because of COVID, and about 30% said it was due to ongoing labor shortages.”
The investments in technology weren’t enormous – 55% of respondents said they spent less than $100,000 on tech. Rutledge said they’re also changing their cultivation practices, such as reducing pruning/weeding or changing its timing. Farmers are also using more temporary farm labor contractors.
Rutledge reported that 53% of those surveyed said they had a labor shortage in 2020-21, and 64% of respondents said COVID exacerbated the shortage. So how do farmers in need of solid labor tackle the issue of finding and keeping good help?
“The top incentives for employee retention: scheduling flexibility, health insurance and production bonuses – and farmers need to do some of these to retain workers,” Rutledge said.
by Courtney Llewellyn
Leave A Comment