Impact of COVID-19 on Agriculture

Q2 H-2A Certified Positions Show Continued, Strong Growth

Market Intel / April 19, 2018

Data recently released by the Department of Labor’s Office of Foreign Labor Certification indicates that U.S. farmers and ranchers continue to demand an increasingly large number of foreign workers via the H-2A program. In the second quarter of fiscal 2018, DOL certified 80,348 H-2A positions nationally, up more than 16 percent from the second quarter of fiscal 2017 when DOL certified 68,999 positions. Even more impressive, Q2 2018 position certifications are more than 150 percent higher than the same period just five years ago.

Higher certifications in the second quarter follow the 15 percent year-on-year increase from the first quarter. When combined, the total number of positions certified in the first two quarters of 2018 exceed the total number of positions certified in all of 2013. If the total number of positions certified in the third and fourth quarters follow a similar growth path of 15.7 percent, the U.S. will have certified more than 231,000 positions in fiscal 2018. The previous record was set in fiscal 2017, when DOL certified 200,320 total positions. 

Contact:
Veronica Nigh
Economist
(202) 406-3622
veronican@fb.org
 

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Following USDA’s March Prospective Plantings report, USDA’s June 30 Acreage report updated acreage expectations for the upcoming crop year. For the 2020/21 crop year, USDA now estimates corn planted area at 92 million acres, 3%, or 2.3 million acres, above prior-year levels. The revision is 5 million acres lower from March intended planting projections of 97 million acres, which was expected to lead to a record amount of corn production. Pre-report estimates had been calling for a reduction of 1.8 million acres, to 95.2 million acres of corn. Iowa leads the way in corn acres planted with 14 million acres, an increase of 4% compared to 2019. Illinois follows with 10.9 million acres of corn planted, up 4% from 2019, and Nebraska planted 9.8 million acres, down 3% from 2019. With 3.4 million acres, Ohio is expected to have the largest increase, 29%, in corn planted in 2020 compared to 2019. South Dakota follows with an increase of 24% in corn planting for 2020 compared to 2019 and Washington increases 18% in 2020 compared to 2019 corn planting. Figures 1 and 2 highlight USDA’s corn acres planted and the year-over-year change from 2019.

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Recent price volatility related to COVID-19, though not a new phenomenon, and a modification to milk pricing rules in the 2018 farm bill are now likely to result in negative or very low returns from FMMO revenue sharing pools, i.e., negative producer price differentials. These negative PPDs are expected to offset recent price increases in the dairy farmers milk check to the effect of $5 to $7 per hundredweight. Subsequently, these negative PPDs are likely to lead to large volumes of manufacturing milk being de-pooled from FMMO revenue sharing pools. Today’s article reviews negative PPDs and the current economic conditions that have resulted in low or negative producer price differentials and the de-pooling of milk.

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