FOOD POLITICS

Foresight on Food Politics: Would Trump's wall really bankrupt America's dairies?

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.

Partners

Supported by the Nebraska Corn Board

The Nebraska Corn Board, on behalf of 23,000 corn farmers in Nebraska, invests in market development, research, promotion and education of corn and value-added products. The board aims to work closely with the farmer-to-consumer food chain, to educate everyone about the role corn has in our everyday healthy lives. The Nebraska Corn Board is proud to sponsor the Farmer Goes to Market program to help bring its mission of expanding demand and value of Nebraska corn to the consumer, through the strongest touch point in that chain: the Nebraska retail grocer.


Supported by the Nebraska Farm Bureau

The farm and ranch families represented by Nebraska Farm Bureau are proud sponsors of the Farmer Goes to Market program. We take great pride in supporting Nebraska's agricultural foundation. A key part of that effort is to make sure we produce safe and affordable food. This newsletter is an important part of our effort to connect the two most important parts of the food chain -- the farmer and the grocer -- with the goal of increasing consumer awareness and information about how their food is raised in Nebraska.


In patnership with the Nebraska Grocery Industry Association

The Nebraska Grocery Industry Association was formed in 1903 by a group of Omaha grocery store owners, wholesalers and vendors to allow them to promote independent food merchants and members of the food industry, and to promote education and cooperation among its membership. NGIA continues to represent grocery store owners and operators, along with wholesalers and vendors located throughout Nebraska, by promoting their success through proactive government relations, innovative solutions and quality services. NGIA offers efficient and economical programs. NGIA also lobbies on both a state and national level, ensuring that the voice of the food industry in Nebraska is heard by our representatives.