Farm labor shortage is driving up wages and demand for foreign produce

New research shows American relying more and more on imported fruits and vegetables. It is due in part to the ongoing labor shortage in agriculture.

Two-thirds of the crop production workforce in America is immigrant labor, but while demand for fresh fruit and vegetables has increased over the years, supply of workers has grown stagnant.

According to Andrew Lim, the director of Quantitative Research, “A lot of it has to do with aging. So, a lot of older workers who have traditionally worked on farms, they’re getting older, they’re retiring. It’s hard labor, it’s hard work, and more importantly they’re not being replaced by younger people who are interested in this kind of work. So, what we are seeing is that the supply of labor is not only not keeping up with demand, it’s expected to decrease which has serious implications for the industry.”

One of those implications is an increasing reliance on imported produce. Lim says that imports have doubled over the past 20 years, especially for crops that have to be picked by hand.

“For a lot of farms that grow fresh fruits and vegetables, a lot of that work is something that can’t be mechanized. These are really delicate products that need to be handled with care, for example berries, leafy vegetables, things like that. You can’t just have a machine pick them up-- not yet at least,” he explains. “So, a lot of these farms and operations are really dependent on labor and a lot of labor, traditionally, has come from immigrant workers.”

He says that the strain on demand is also driving wages higher: “If you look at the pace of wage growth it’s outpacing, even those highly educated workers, and so you really see demand outstrip supply here, and that’s really a big concern. You know what we found in terms of, in particular, fresh fruits and vegetable farms, is that a higher share of their costs in general are in the form of labor costs of what they pay their workers and so they’re especially sensitive to these kinds of increase in wages for their workers.”

To fill the gap, the number of H-2A visas has nearly tripled over the last 20 years, but last year, there were around 45,000 requests for workers that were left unfilled.

Lim says that it is a sign the program needs to be reformed.

“It’s something that needs to be revisited, more often that it has been because, especially in agriculture as you know things are so variable year to year, you have different weather conditions, you have different market conditions, just in terms of consumer demand but also in terms of supply chain issues, as we’ve seen this year ongoing. So, being able to be more flexible with the rules but also realizing that every crop and every farm depending on the produce that they’re producing lives on a different schedule throughout the year.”

Their research shows average labor costs on fruit and vegetable farms are 10-20 percent higher than the rest of the ag industry.


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