FOOD POLITICS

Search Farmer Goes to Market

Search Site

Would Trump's Mexican immigrant policy break the nation's dairy farms?

Bloomberg Politics reports in early June several sources within the nation's dairy industry are fearful that presumed Republican presidential candidate Donald Trump's promise to build an immigration-tight wall between Mexico and the southern United States would cause the nation's milk-producing farms in particular to suffer.

Trump’s immigration stance “scares the hell out me,” Wisconsin farmer and president of the state's Dairy Business Association Gordon Speirs told Bloomberg.

The fact our state is better known for beef cattle masks the reality that some 55,000 dairy cows generate more than 100 million gallons of milk and roughly $275 million a year in economic activity. How vulnerable would those Nebraska dairies be to a potential loss of migrant labor? A 2015 study by Texas A&M pointed how reliant the dairy industry is on immigrant labor, which is often here off the books:

  • On U.S. dairies as a whole, of the estimated 150,418 workers employed in 2013, immigrant labor made up 51 percent of all dairy labor. Dairies that hire immigrant labor produce 79 percent of the U.S. milk.
  • Additionally, other researchers have found that, according to U.S. Department of Labor statistics estimates from 2001 and 2002, about half of all immigrant agricultural workers in the United States are unauthorized.
  • Eliminating immigrant labor would reduce the U.S. dairy herd by 2.1 million cows, cut milk production by 48.4 billion pounds and the number of farms by 7,011.
  • Retail milk prices would increase by an estimated 90.4 percent.
  • Eliminating immigrant labor on dairy farms would reduce U.S. economic output by $32.1 billion and reduce employment by 208,208 jobs. Approximately 64 percent of the losses noted above would occur in input supply sectors and services provided to U.S. dairy farms.

In addition to those direct losses, indirect productivity losses also can be assumed. Although dairy farm workers on average are paid well above minimum wage--one study showed average annual equivalent compensation of $34,443--and dairy farms that hire immigrant labor pay higher average wages than farms that do not hire immigrants, the reality that those illegal immigrant workers often work in the shadows causes productivity losses. One study, reported by Farmer Goes to Market here, suggested farm employers often avoid issues caused by facing a worker deportation, by refraining from promoting immigrant workers into more advanced and publicly visible positions. They also typically refrain from training and granting responsibilities to unauthorized immigrant workers or promote them to positions that require them to have insurance for fear they might lose that investment if the workers were arrested for immigration violations.

Whether Trump's plan to wall off Mexican immigration comes to fruition or not, the labor outlook for America's farms doesn't look good, according to an analysis by University of California Davis, titled The End of Farm Labor Abundance. In it, the ag economists suggest demographic data from rural Mexico shows the same shift out of farm work that occurred in U.S. labor history is well underway in Mexico. At the same time, demand for agricultural labor in Mexico is also rising. That means U.S. agriculture will compete with Mexican farms for a dwindling supply of farm labor. The decline in foreign labor available to man U.S. farms will ultimately drive them to find ways to save labor and switch to less labor-intensive crops and technologies--all as they pay higher costs.

S5 Box