The Current Status of the Labor Issue in the Dairy Industry

Back in October I authored an article for Dairy Business characterizing the serious dilemma faced by dairy producers and cooperatives in securing sufficient labor to meet the needs of the dairy industry. Now five months later a lot has happened across the agriculture labor front and throughout the country so therefore a timely update is in order. Overall, I wish I had better news to report but as we move forward into 2022. The situation may improve although there are many factors in play and to a great degree our status is tied to national events that are beyond our control, but at the same time have significant effects on our industry.

National Implications

On the national level despite the fact the U.S. has added over 6 million new jobs in 2021, which was a major record, there still remains 10.9 million job openings as of December. Many individuals have quit their jobs while others have either been laid off or fired for not getting COVID vaccines. Some analysts have described this huge departure from the workforce as the “Great Resignation”. Although the previous generous federal unemployment benefits expired in early September it did not seem to stem the tide at all in folks who left their employment for one reason or another. Some are seeking higher paying or more fruitful job opportunities while others may be content to stay at home during the COVID pandemic. Employers are having to pay much higher wages in many cases and are finding it difficult to enlist new employees who will stay in their positions for a sufficient period of time.

Agriculture Labor Shortages

On the agricultural side truck drivers have been in short supply for several years. Dairy cooperatives have had to wrestle with the difficulty of having enough bulk tank truck drivers to move their raw milk from the farms to their processing facilities on a daily basis. Nationally it is reported that there is a need for 80,000 truck drivers or more to haul all kinds of products from manufacturing plants and of course agricultural commodities to stores and other outlets. The general public may not be fully aware that it requires extensive training to become a licensed truck driver given all the safety and other rigid requirements necessary to pass the tests and become qualified to operate these large vehicles.

In addition to the trucker problem the day to day operations of our dairy cooperative processing facilities still remain in jeopardy due to the lack of a sufficient workforce. Most recently this was exacerbated by the onset of the Omicron variant that has led to employees being out sick and therefore has created much difficulty in keeping plants running at full capacity. Despite problems with the supply chain which have not been resolved, dairy exports have remained strong and demand for many dairy products is excellent and this has shown up in higher farm milk prices. All of these events demonstrate the challenges we face as an industry.

 So What Is Being Done To Resolve Labor Shortages?

So given where we are right now what are our chances for an improved labor outlook for dairy?  Let’s first start with our dairy producers since they have felt the brunt of labor shortages for a very long time. At the end of my previous article I mentioned the potential for the passage in Congress of the Farm Workforce Modernization Act. This bill was passed by the House in March of 2021 with strong bipartisan support. It was then sent to the Senate where it has remained in limbo. My prediction on its passage by Congress and being sent to the President for his signature in 2021 was at best 50/50. To quickly summarize the importance of this bill to dairy producers, was it would expand the H-2A seasonal worker program to allow for full time immigrant workers that are fully vetted and legal to be available to work on dairy operations year round. No such program now exists for dairy farmers or other ag businesses who need workers on a full time basis twelve months a year. The Senate has not moved on this legislation and its chances of being passed in 2022 are very unlikely I am sorry to say.

There are a number of reasons for this. One of the main reasons is the current crisis at the U.S. Mexican border. Last year over 2 million illegal immigrants crossed the border into the U.S. Very few were processed in any formal way and they came from countries all over the world. This continued influx of border crossings has prompted strong concerns by a number of members of Congress. And it has clearly diminished the chances for passing any agriculture labor reform legislation in the near future. Members of Congress want this problem resolved first before moving on any legislative initiatives involving immigration. And as we move closer to the mid-term elections the less likely a free standing bill such as the Farm Workforce Modernization Act will be taken up. Recently the U.S. Supreme Court ruled that any illegal immigrants crossing the U.S. border must be sent back to Mexico and processed on a case by case basis before they could be admitted to the U.S. or be sent back to their own country. So far the current Administration has not made much headway in following up on the Court’s mandate.

Other Legislative Avenues

The House has attempted through the budget reconciliation process on three separate occasions to include immigration provisions for undocumented agricultural workers already in the U.S. as well as “Dreamers” and those under temporary protected status to remain permanently in our country. These efforts were part of the Build Back Better Bill that was passed by the House and sent over to the Senate. On each occasion the Senate parliamentarian rejected these provisions as they failed to pass muster with the “Byrd Rule” which excludes legislative policy objectives being included with budgetary impacts that are part of the reconciliation process. However, at this point the Biden Administration is not pursuing enforcement of undocumented workers already in the U.S. by the Immigrations Customs Service (ICE). Also the Build Back Better Bill has failed to gain any traction in the Senate at this time.

Higher Hourly Wages for Farm Workers

I should point out that three states, Washington, California and now New York have all approved time and a half for over time for a 40 hour work week for farm workers. New York’s is not completely final yet but it is expected to be given the green light by all parties at the state level. The hourly rates were previously 60 hours per week and had been for many years. This will probably precipitate a number of other states to follow suite. It places a real financial hardship on the bottom line of most dairy farmers given the higher costs they already face for labor, feed, fuel and many other farm expenses.

Summary

So here is where we are on the labor issue for dairy producers:

1. Do not expect the Farm Workforce Modernization Act to pass this year. We are essentially back to square one being able to hire new legal, fully vetted year round immigrant workers in the future through the H-2A program or one similar to it. That could change but it is unlikely at this time.
2. Undocumented immigrant workers already in the U.S. are still subject to deportation. However the Biden Administration is not enforcing efforts through ICE to seek out workers at this time to deport them. Again, there is no program available for undocumented workers to come forward and go through a process of having background checks and if approved be able to remain in the U.S. on a work visa.
3. We have not made any new progress but the battle will continue. It is of the highest importance to the dairy industry.