Apr 12, 2016

Labor tops Michigan farm concerns

Results from a survey conducted by the Michigan Vegetable Council reported a peak of 88 vegetable farms in September 2014 that needed additional workers. As expected, labor shortages caused lost sales. Vegetable growers reported losing sales of $6.6 million because of worker shortages.

Recognizing the need to better assess the current labor situation facing vegetable growers, MVC commissioned a survey of labor needs and availability for vegetable farms in Michigan.

The survey results, which covered the 2014 crop year, have been released, including the reported loss of sales because of worker shortages.

According to the survey organizers, in recent years, vegetable growers have experienced crop and sales losses as a result of seasonal labor shortages. Growers have also passed on opportunities to expand production because of concerns about labor availability.

“To get a current snapshot of labor needs and shortages, the Michigan Vegetable Council commissioned a survey of vegetable growers by the National Agricultural Statistics Service (NASS) for the 2014 crop year,” the survey report said. “Growers of 15 or more acres of vegetable crops were surveyed. A total of 580 vegetable operations completed the survey. In separate surveys, fruit and greenhouse/nursery growers also provided information on their labor needs and availability.”

The introduction to the report indicated Michigan is ideally suited by climate and soils for growing a broad diversity of vegetables. By its nature, much of this production is labor-intensive. Over the years, the supply of seasonal labor to harvest and pack crops has cyclically fluctuated between adequate and tight. Today’s critical shortage is unprecedented and demands action if growers are to stay competitive in growing these crops.

“A number of factors have caused today’s needs for labor to exceed the supply,” the report stated. “Consumer demand for ‘locally grown’ produce, along with freight cost advantages over western states, has strengthened the market for Michigan-grown fruit and vegetables. At the same time, some of the traditional migrant labor population has been ‘aging out,’ while some former farm workers have moved on to jobs outside of agriculture.

“The federal H-2A guest worker program, which was initiated in 1986 to bring in foreign nationals on temporary work visas, is cumbersome, slow-moving and fraught with administrative perils to growers,” the report said. “Until the last few years, H-2A was used by only a few growers in Michigan.”

Michigan’s Work Force Development Agency has responded to the agricultural labor shortage by attempting to source farm labor from the U.S. domestic population. However, growers have not had much success with the well-intended attempts of this agency to find workers willing to perform traditional agricultural labor.

“The labor-intensive sector of the Michigan vegetable industry is at a crossroads and needs a clear understanding of its current position,” the report stated. “A critical mass of harvested production is required to sustain its infrastructure. Costly packing facilities need minimum volumes maintain profitability. Reduced supplies and unfilled orders would harm the industry’s reputation and could cause Michigan to again become a last-resort or fill-in region for buyers. The produce trucking sector thrives on concentrated high-volume shipping points and could recast Michigan as an out-of-the-way supplier of fresh produce.”

Survey results

The survey results for vegetables reported a peak of 88 vegetable farms in September 2014 that needed additional workers. As expected, labor shortages caused lost sales. Vegetable growers reported losing sales of $6.6 million because of worker shortages.

“Although not measured in the survey, there are numerous accounts of sales lost from crops that were never planted because of concerns about labor availability,” the report stated. “The labor shortages occurred in spite of paying higher wages.”

The average hourly wage paid by the vegetable farms surveyed increased from $9.90 in 2013 to $10.40 in 2014.

The vegetable farms surveyed hired 4,000 migrant workers, which accounted for 63 percent of all seasonal workers. Of this total, 2,550 (64 percent) had been previously employed by the farm and 2,800 (70 percent) were provided housing.

Of the vegetable farms surveyed, 17 percent used want ads and other means to recruit locally and 16 percent used agricultural employment specialists from state agencies (e.g., Michigan Works!). Only 3 percent of the farms surveyed used H-2A as a source of workers in 2014.

Future implications

According to MVC, labor concerns will continue to hamper production in Michigan. MVC cited the following conditions:

• The supply of workers from the traditional migrant labor force will continue to decline in response to the “aging out” of these workers, along with a likely increase of enforcement efforts directed at workers not legally documented.
• In spite of the cost and difficulties associated with the H-2A guest worker program, the use of this program can be expected to increase. Great Lakes Ag Labor Services was started as a pilot project by Michigan Farm Bureau in 2014, bringing in 90 workers for four fruit farms in Michigan using the H-2A program. Great Lakes provides compliance, application and worker services for growers using the H-2A program. In 2015, Great Lakes expanded to 10 fruit and vegetable farms and 405 workers. In 2016, the program is again being expanded to about 20 farms and 900 workers. In addition, other growers are working with independent contractors to bring in H-2A workers.
• Partly because of increased use of H-2A workers, hourly labor costs will likely continue to increase. The minimum hourly wage for H-2A workers in 2015 was $11.56.
• Growers will continue to look for ways to increase labor efficiency, both through efforts to retain the best seasonal workers each year and to develop or improve mechanical picking aids.
• Some growers will respond to opportunities to grow vegetable crops that can be mechanically harvested and others will downsize or get out of growing vegetables.

“The most alarming and permanent change in labor availability is simply an ‘aging out’ of a generation of agricultural workers, the report said. “Each farm in Michigan has its own story, but the common thread is that there is a decline in the number of workers available for seasonal agricultural work. Many growers are still relying on historical relationships with a pool of worker families and facilitators that spans several generations of employees.

“Improved efforts by growers to recruit and retain labor continue to be the most promising solution to the labor crisis. Growers need to recognize that the ‘aging out’ of agricultural workers, changed family structures and competition for employees are on-going trends.

“Solutions range from developing long-term relationships with labor contractors, to providing new services and benefits to farm workers, to using the H-2A program in some cases for seasonal labor needs.”

–Gary Pullano