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Two big storms are threatening the way American agriculture does business - immigration and overtime pay rules.
September 18, 2016
Are the crops ready and you need some extra help to harvest? You just might be hand picking your produce all by your lonesome soon. Rounding up cattle? That'll be a lonesome pursuit, too. Two big storms are threatening the way American agriculture does business. Sure, they're just peeking over the distant horizon and they might blow over before their typhoon-like effects wash away your profits, but you still need to batten down the hatches and have a Plan B ready. Maybe a Plan C and D, too.
The first storm has been all over the news so I know you've heard about it. There are calls for much tighter restrictions on immigration and shipping millions of 'illegals' back home as soon as possible. The idea is there are too many people of the criminal element who are crossing the Rio Grande and even those who are fine upstanding citizens are illegally overstaying their welcome.
Here's the problem with such an migrant upheaval. Last May, the Pew Research Center said 16% of ag workers are illegal immigrants. If you've checked the fields during harvest, you know that number is ridiculously low. More recent reports, according to The Hill, are a little closer to the awkward truth.
The Pew Research Hispanic Trends Project suggested that there were 8.4 million unauthorized immigrants employed in the U.S.; more than 5% of our labor force. It's an increase of approximately 35% since 2000. How important are those workers? Texas Comptroller Susan Combs said, “Without the undocumented population, Texas’ work force would decrease by 6.3% and Texas’ gross state product would decrease by 2.1%. Furthermore, certain segments of the U.S. economy, like agriculture, are entirely dependent upon illegal immigrants."
The U.S. Department of Agriculture states estimates that “about half of the hired workers employed in U.S. crop agriculture were unauthorized, with the overwhelming majority of these workers coming from Mexico.”
USDA is concerned that immigration reform could significantly impact the U.S. fruit and vegetable industry. Casting more doom and gloom, the National Milk Producers Federation suggested "retail milk prices might increase by 61% if its immigrant labor force were to be eliminated."
The Department of Labor agrees with USDA, saying over half of the 2.5 million farm workers in the U.S. are illegal immigrants. Growers and labor unions, who are much closer to the real numbers, put this figure at near 75%. Regardless of which number is most accurate, that's too many employees to lose and still operate effectively, or operate at all.
So pick your numbers as long as you understand that, depending on how the promised/threatened effort to reform immigration plays out, the majority of farm workers could be rounded up and shipped south of the border. Imagine a starving world where the Earth's bread basket - geographically, the Western two thirds of the U.S. - is forced to leave vast amounts of its output to rot in the fields because of labor shortages.
And let's look at something with potentially a more immediate financial impact on American agriculture: California's new overtime pay law for ag workers. Although the standard for most Americans has been time-and-a-half for anything over an eight hour day or a 40 hour week, the new rule for ag workers in and around the Salinas Valley is a more lenient 10 hours a day or 60 hours a week,
Let's assume for now that you'll still be able to hire a sufficient number of workers to bring in your crops and you put them in the fields at 6:00 AM. At 4:00 PM, you have a choice to make: bring in a second shift or start paying overtime.
Don't for a second believe that the cost of bringing in your 2017 corn crop in Iowa won't be effected by what California's fruit growers will be paying soon. What starts way out West has a long history of gradually moving East. You better start looking at your books and develop a contingency plan for paying a little more to your hired hands.
Consider two contingency plans. (1) Work hard with your legislators to make sure any new immigration reform takes into consideration your critical need to hire what's euphemistically known as 'seasonal workers' and (2) discuss with your friends and neighbors the pros and cons of fighting overtime rules when (not if) a bill is introduced in your state.
In the meantime, Happy Harvesting.
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