Loss of foreign workers damaging to America's pig farmers

A study from Iowa State Unversity establishes a baseline on the labor issues, and trends in U.S. pork production including input from U.S. hog farmers.

April 4, 2018

6 Min Read
Loss of foreign workers damaging to America's pig farmers
National Pork Board

Every year more jobs are available on American pig farms, however, finding people to fill them is growing challenge.  Although employment in the swine industry grew three times faster than employment in all U.S. industries along, attracting and maintaining employees is a serious problem for the U.S. pork business.

“The U.S. pork industry needs access to a legal and productive workforce,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “And skilled and unskilled foreign workers have been crucial to maintaining and growing the workforce and revitalizing rural communities across the United States. We need more of them, not less.”

Given a tight labor market, particularly in rural areas, the loss of foreign-born workers would lead to a 3.4-5.5% drop in agricultural jobs, according to a study commissioned by the National Pork Producers Council.

Iowa State University study establishes a baseline on the labor issues and trends in U.S. pork production.

Using a study from the U.S. Department of Agriculture’s Economic Research Service, ISU economists Lee Schulz, Christian Boessen and Georgeanne Artz determined that a reduction in the foreign-born workforce – prompted by a change in immigration policy – would not be offset by native-born workers and permanent residents. Instead, they found, the tighter supply of foreign-born workers would reduce overall demand for workers as production costs increase and would decrease agricultural output as farmers abandon labor-intensive operations.

Several factors have led to a severe labor shortage in agriculture, including a negative population growth rate, an aging rural workforce and increasing number of people unable or unwilling to do strenuous agricultural work. Also, a decline in immigrants going into rural labor markets and an unemployment rate hovering near 4% (most economists consider 4% “full employment”), the ISU economists found.

Key Findings

  • Workers beyond family needed: Agriculture in general and particularly the hog industry has changed dramatically in recent decades, from an industry largely utilizing family labor to an increasingly capital intensive, technology, and science-driven one with significant demand for hired full-time skilled and unskilled workers. From 2001 to 2015, employment in the swine industry grew by an annual rate of 2.1%, a rate three times faster than employment growth in all U.S. industries. Even during the worst recession since the 1930’s, the hog industry created jobs. Total and weekly wages in hog production jobs have also grown significantly faster than the average of all U.S. industries over this 15-year span.

  • Tight labor supply: The robust demand for labor in the hog industry is against a backdrop of increasingly threatening macroeconomic and demographic trends. The most immediate challenge to hog production firms in the industry has been the strengthening of the broader U.S. labor market with the U.S. unemployment rate falling from 10% in 2009 to 4.1% in early 2018. This low rate of national unemployment still understates the tight labor supply in most of the largest hog production states where unemployment is near or below three percent. Furthermore, in the largest hog production states the labor force participation rates are generally well above the national average, indicating little or no slack in these local labor markets.

  • Shrinking rural population: The most threatening trend facing hog producing firms in the longer term is the demographic realities in the non-metropolitan counties where hog producing firms are overwhelmingly located. Population growth has been slowing in U.S. non-metro counties for decades, and large swaths of rural America have had negative growth or loss. In almost 70% of non-metro counties, outmigration and deaths have significantly outpaced births and in-migration. The aging rural workforce that remains is increasingly unable and unwilling to do the strenuous labor that agricultural work demands. As more rural residents age beyond their childbearing years, this negative trend in population and labor force will likely accelerate. From 2007 to 2017 the rural labor force shrank in seven of the eight largest hog producing states.

  • Competition for foreign workers: A final, and important, a trend that is exacerbating the ever-tightening rural labor market is the declining flow of immigrants into rural labor markets. Over the last 30 years, the immigration of foreign-born workers offset some of the declines in rural native-born population and labor force. That trend had likely already reversed even before the recent emergence of political sentiment toward stricter immigration controls and increased enforcement. Furthermore, an increasing proportion of the large influx of immigrant workers that came to the U.S. in the 1980s and 1990s are aging beyond their prime working years. Ever improving economies and rapidly falling population growth in immigrant-sending countries are increasingly changing the calculus of potential immigrants. There are more and better jobs in many immigrant-sending countries and the baby-booms in those countries that fed the immigration waves in recent decades are passed. These trends, in an environment of tighter immigration rules and enforcement, combined with the negative growth in native-born rural populations almost certainly portend decades of increasingly difficult labor market conditions for all rural firms including hog producing firms.

 So, what did pork producers say about available labor supply?

 The study also included interviews with pork industry participants. Here are the key takeaways from their responses. 

  • The importance of being able to hire workers into companies at the right stage or level and in a way to develop both pig skills and people skills for leadership development and growth and promotion within a company.

  • The increasing difficulty of hiring dependable employees in the local labor market. The biggest challenge with native-born local workers was work schedules that require work on weekends and holidays more so than physical demands of the job.

  • Foreign-born workers have performed well, but current guest worker programs are less than ideal and create additional management challenges.

  • Changes in farm specific procedures, auditing, Pork Quality Assurance, antibiotic-use guidelines, and other regulations and protocols have created strong demand for employees with higher levels of education and training.

  • A final noteworthy sentiment expressed at different points in the interviews was an attitude that the industry and the employers therein simply have to adapt and attract people to their businesses—which is particularly insightful given the external nature of the macroeconomic, demographic, and political forces affecting the supply side of local labor markets

NPPC is supporting congressional legislation that would create a new visa that allows non-seasonal foreign agricultural workers to remain in the United States for up to three years while deferring a portion of their pay as an incentive for periodic “touchbacks” to their country. The H-2C visa would replace the current H-2A temporary, seasonal agricultural worker program. The legislation initially would let agricultural employers hire up to 410,000 foreign workers for on-farm jobs and 40,000 for meatpacking plants. It also would put the H-2C program under USDA rather than the Department of Labor.

“If we don’t address the current labor shortage or it gets exacerbated, we could see animal health and well-being suffer and agricultural facilities shutting down, causing severe financial harm for farmers and ranchers and to rural communities,” Heimerl said.

Read the entire study here

Source: National Pork Producers Council 

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