The Van Trump Report

Farm Labor Costs Have Risen +6% Since 2020… and I Think this Number Might be Conservative 

The USDA is estimating that average farm labor costs have risen +6% since last year. The all-hired worker annual average gross wage rate during 2021 was $16.38 per hour, versus $15.49 in 2020 and $14.91 in 2019. At the same time, the total number of workers declined by -3.6%, with USDA estimating an average of 672,000 hired workers in 2021 versus 697,800 in 2020.

USDA conducts the Farm Labor Survey once per quarter, with October being the last survey of the year. The latest, conducted October 10-16, 2021, showed average annual gross wages at $16.59 versus $15.87 at the same point in 2020, a total gain of +5%, but unchanged from the previous survey in July. Wages were highest on the West Coast, while the Southeast and Delta region wages were the lowest. California by far hired the most farm labor, averaging 143,000 in 2021, though that is down from more than 150,000 in 2020. That compares to the Cornbelt I region ((Illinois, Indiana, Ohio) that averaged 34,500 hired workers and Cornbelt II (Iowa & Missouri) with an average of 23,000.  

Diving into the details, wages earned by field workers exceeded livestock workers in 2021, though there are several regional exceptions. Nationally, farm operators paid field workers $15.77 per hour versus $14.76 in 2020. For livestock workers, annual wages in 2021 averaged $15.08 per hour, up from $14.35 last year. Wages for livestock workers were higher than field workers in 10 of the 18 USDA farm labor regions with the biggest differences being in Hawaii ($18.01 vs $16.33), Mountain III ($15.35 vs $14.36), the Southeast ($12.58 vs $11.81), and California ($17.74 vs $17.46). 

Personally, I think this is a very conservative estimate. I continue to talk to friends and partners I have in farms across America and everybody is saying the same thing and having to pay higher wages to keep good help. With so many trucking companies bumping pay higher and higher it’s almost impossible to keep good drivers. There are also massive pay increases happening in several other blue-collar trades which adds more pressure to keeping help hired on the farm. I’m telling you it’s tough right now to find good help. I’ve been hearing more people participating in the South African H-2A worker program but who knows how that is going to play out with the new Covid variant and travel restrictions that might happen in the weeks ahead.  The full report is available HERE.

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