What does immigration reform have to do with grocery prices? As it turns out, quite a lot! Undocumented immigrants make up a significant share of the workforce across U.S. farms and meat processing operations. Indeed, it’s probably fair to say that without the thousands of undocumented workers that currently pick crops and slaughter beef cattle, the U.S. food supply chain would essentially stop functioning. So, it’s not surprising that there is huge concern that newly elected Donald Trump’s crackdown on undocumented workers could cause chaos for farmers and meat packers among others in food supply chain. Without the undocumented workers, crops will go unpicked and rot in fields, and beef processing plants will be unable to staff their operations. Why does this matter to you? It means higher prices at the supermarket.
While cooling inflation has brought down the price of many goods, grocery prices have remained stubbornly high. Now though, if Donald Trump makes good on his campaign promise to deport significant numbers of undocumented workers, food prices are likely to rise further as disruption to the nation’s food supply causes shortages especially for fresh produce and meat.
Why is the nation’s food supply so dependent on undocumented workers? It all comes down to costs. Undocumented workers are generally willing to work for lower wages, and in an industry where profits are often razor thin, keeping labor costs as low as possible is critical. If the workers that farmers and meat packers currently depend on are no longer available, labor costs will certainly rise pushing prices higher in the grocery store. Rising prices often prompt buyers to switch to substitutes, say for example, from fresh strawberries to less expensive frozen berries. The problem here though, is that because all strawberries need to be picked, whether sold as fresh or frozen, prices on both types will rise. Faced with higher prices for strawberries, you might decide to buy blueberries instead, but again, the price of blueberries will also rise as growers either fail to pick enough to meet demand or are forced to hire more expensive pickers. As you might expect, farmers and other players in the food industry have expressed alarm at the new president’s immigration policy plans. At least for now though, that new president, who makes no secret of his love for burgers from McDonald’s, seems to be committed to deporting undocumented workers. All of which would suggest that it won’t be long before those burgers cost a little more.
Discussion Questions:
1. Reflect on the challenges of balancing border reform with the demand for low cost labor. American workers have largely rejected the agricultural jobs that workers who lack legal status now hold. What are the implications of deporting these undocumented workers for the agricultural industry itself? What would it mean for food companies and for individuals working in other parts of the food supply chain such as truck drivers?
2. Consider the broader economic implications of the loss of undocumented workers in the U.S. food supply chain. How would supply choices affect prices, wages, and overall inflation rates? Could fresh produce become a luxury good for some consumers living in the richest nation in the world?
Sources| The Guardian: https://www.theguardian.com/environment/2024/nov/11/mass-deportations-food-chain-california; HBR: https://hbr.org/2025/01/trumps-trade-and-deportation-plans-could-be-disastrous-for-the-u-s-food-supply; CBS News: https://www.cbsnews.com/news/donald-trump-immigration-inflation-economy/; Unsplash: Photo by Eduardo Soares on Unsplash