The US agriculture industry is heavily dependent on migrant workers. Approximately two-thirds of crop workers are foreign-born, as are approximately half of the workers in the dairy and meat packing industries. Some of the migrant workers are on temporary visas, known as H-2A visas, that allow them to work legally in the US for 6-10 months at a time. Others have “temporary protected status,” which allows people from countries deemed unsafe to live and work in the US until such time that it safe to return home. But a substantial share, as much as half, are undocumented, which means they have no legal right to work in the US.
The Trump administration has vowed to begin a massive program to remove all of the approximately 12 million undocumented immigrants currently in the US. Unsurprisingly, this has many agriculture producers worried. They fear that if the undocumented workers are deported, they will be unable to find workers to replace them. This would potentially cause major losses to farmers as their crops go unpicked and reduce production in the dairy and meat packing industries, as well as increase labor costs across the entire agriculture sector. Furthermore, in areas that rely heavily on the agriculture sector, a downturn in production would have ripple effects throughout the entire economy.
While it is unclear how quickly and extensively mass deportations will take place, farmers do know that if workers are deported, it will take a long time to replace them with documented workers, due to the long process and costs associated with getting the limited number of temporary visas that are available each year. While many are lobbying Congress to expand the number of temporary visas available, they are pessimistic that anything will be done quickly, if at all. This creates a lot of uncertainty when making business decisions like how much of a crop to plant or how much livestock to raise. While farmers can use long-term forecasts to mitigate uncertainty associated with the weather, unfortunately, there is no Farmers Almanac to predict which way the wind will blow in Washington, DC.
Discussion Questions:
- Suppose deportations drive up wages in the agriculture sector. Use a supply and demand model to show how the equilibrium price and quantity of tomatoes will change as a result of higher input prices.
- Suppose farmers believe they will be unable to replace workers they lose to deportation. What are some strategies they might adopt to deal with the resulting labor shortage?
Sources| Yahoo.com: https://www.yahoo.com/news/trump-migrant-deportations-could-threaten-123033658.html?guccounter=1; CMSNY: https://cmsny.org/us-undocumented-population-increased-in-july-2023-warren-090624/; Economic Research Service: https://www.ers.usda.gov/topics/farm-economy/farm-labor; American immigration Council: https://www.americanimmigrationcouncil.org/research/tending-americas-food-supply-meat-dairy-industries; Unsplash: Photo by Loren King on Unsplash