Where Are We on Agriculture Labor Needs?

Well, the problem has not changed all that much since my previous update in early February. At the dairy cooperative level truck drivers are still in short supply for hauling milk to processing facilities. And our plants need additional employees to keep them operating at sufficient capacity to meet consumer needs. Our dairy producers are in dire need of help! This has been a problem for a long, long time. The issue is still a major priority for the dairy industry as well as other agricultural businesses and needs to be resolved as soon as possible.

Current State of the Economy

As you all know the present inflation rate of 8.3% is taken its toll on consumers. Higher gas, food and utility expenses just to name a few are significantly cutting

into the take home pay of most all wage earners. With the average price of gas at $4.76 per gallon nationally and in some states much higher, commuting to work has become a very costly part of the budget of almost everyone. Food prices of course have dramatically increased. For a while, dairy products were able to hold the line. However, the disruption of the supply chain and higher expenses for dairy producers and cooperatives at all input levels has increased the inflationary cost of dairy products to 14.7%. Read on!

Dairy Producers and Cooperatives Face Unprecedented Expenses

Yes, the All Milk Price is very good topping $25 per cwt but labor costs, feed, diesel fuel, fertilizer prices and about every other cost you can think of has increased dramatically for our producers and cooperatives. I know I am preaching to the choir, but these costs only exacerbate the severe labor shortage on our dairy operations and cooperative facilities. I point this out because it is a problem that can be fixed if Congress would only move on agricultural immigration reform.

Climate Change Challenges

To add to the pressures of high costs and labor needs dairy farmers are under increased pressure to reduce Greenhouse Gas Emissions. Although the actual

amount of GHG emissions from methane gas produced by manure is not precise, it is estimated that 2% or more can be attributed to dairy and as much as 10% to livestock and poultry operations. Although estimates from the UN Environmental Organization, and a number of environmental groups, place these GHG estimates much higher. There is a call to reduce the number of dairy cattle and for more strict government regulations on manure management. Some states have already initiated regulatory requirements and set net zero-time frames for GHG emission reductions. Anaerobic digesters are costly to construct and maintain and only work well on certain size—larger—dairy operations.  This issue is not going to go away. It only adds to the many challenges producers face in today’s world.

The Legislative Holdup

As mentioned in my earlier article the House of Representatives passed the Farm Workforce Modernization Act in March of 2021 with a bipartisan vote. The Senate has not moved on this bill although there have been some discussions among Senators from dairy states who are pushing to get legislation passed in this session of Congress. The Bill passed by the House is not perfect, but it is a good starting point. There has been talk that perhaps during the “Lame Duck” session this fall after the mid- terms that the Senate might move forward on Ag Labor Legislation.

Farm Labor Costs Are Up

USDA has released additional data on the Adverse Effect Wage Rate comparing the 2021 and 2022 wage rates. The average adverse wage rate for field and livestock workers combined was up nearly 9% over the same period compared to last year. The wage rates in the Northeast, Florida, and the Lake States including Michigan, Minnesota and Wisconsin and the Corn Belt States of Iowa and Missouri were well into the double digits. The U.S average wage rate went from $15.08 per hour to $16.37 an 8.55% increase in one year.

The U.S Mexican Border Situation

You can’t talk about the agriculture labor issue and the prospects for legislative reform without mentioning the crisis at our southern border. In April 234,000 illegal immigrants crossed the U.S. border a record number according to the Border Patrol Agency. In all likelihood, the warm weather is still not upon us which will increase that number substantially. The previous Administration had initiated Title 42 which dealt with COVID related health matters for immigrants crossing the border. It resulted in as many of half of them being sent back to Mexico and not allowed to gain asylum in the U.S. The Biden Administration planned to lift Title 42 on May 23^rd. However, a federal District Court Judge in Louisiana blocked the move and issued an injunction against it when several state Attorney Generals sued to stop the Administration from proceeding with lifting Title 42.

Estimates by immigration experts and the Border Patrol Agency believed that the lifting of Title 42 would triple the number of border crossing on a monthly basis. That would mean that as many as 700,000 plus illegal immigrants would entered the U.S. on a monthly basis using the April numbers as an example. Thousands and thousands of immigrants are massed on the Mexican side of the border awaiting a decision on an appeal the U.S. Department of Justice on the Judge’s decision.

Can We Expect Congress To Act On Ag Labor Reform This Year?

In my last article I was pessimistic about our chances for getting something done. In fact, I said our chances were about zero. Let me say this—the crisis at the border continues to remain a huge impediment to Congress moving on this high priority matter. Some will say it is an excuse to do nothing and that is a good point, but as long as thousands of people enter the U.S. every day with very little information on their background and why they are coming here, is an issue that concerns almost all Americans. Most are just released and told they will be notified to attend a hearing at some date in the future. Many will never show up at a hearing. A number of TV pundits say that farmers and other businesses use these illegal immigrants as “cheap labor”.  Our dairy farmers provide the Social Security numbers and all other information on their employees and withhold federal taxes and social security taxes and state taxes where applicable. Those employers who pay cash under the table and do not provide the federal and state governments with the proper employee information are taking a huge gamble. The TV pundits for the most part are wrong. I believe it is going to be difficult to get the Farm Workforce Modernization Act passed in the current political environment during an election year. However, the Lame Duck session is always a possibility. What the dairy industry needs to push for I believe is simply an expansion of the H-2A program that would provide for full-time, year-round workers for dairy operations. It would be an enormous help to our industry. And if it could be extended to include the workforce at our cooperatives, all the better. I will be keeping you updated on this very critical matter.