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H-2A Wage Changes Increase Cost of Ag Labor

Podcast / Newsline March 21, 2019

Credit: U.S. Department of Agriculture / CC0 

The increase in mandated wages as part of the H-2A program means farmers and ranchers must pay more for labor. Micheal Clements has more.

Clements: Increases in the minimum wages mandated under the H-2A program present a challenge to farmers who are already facing tight margins. Veronica Nigh, American Farm Bureau Federation economist, says the number of certified positions under the program increased 10 percent in the first quarter of this year compared to 2018. She says that’s helping to drive up the H-2A adverse effect wage rate.

Nigh: AEWR as it’s more easily said is the wage that employers through the H-2A program have to pay their employees. It’s a regional weighted-average rate, but it’s basically the minimum you have to pay workers through the H-2A program. And the national average is $12.96, which is up six percent compared to where we were in 2018.

Clements: The biggest increases are found in the western United States.

Nigh: In the western part of the United States, there were eight states that saw increases that were between 15 and 23 percent. Missouri, Iowa and Florida saw small declines. But, the other 39 states saw increases between two and nine percent.

Clements: Nigh says the increase represents a challenging economic environment for farmers and ranchers.

Nigh: It’s making it more difficult for farmers to plan. And as we look at net farm income being down 44 percent this year compared to where we were back in 2013, we’re all feeling those squeezed margins. Especially on the fruit and vegetable side; labor is their largest cost. So, when you start seeing increases of six percent, it starts really pulling at the margins for those farmers who are already experiencing a pretty challenging economic time.

Clements: Micheal Clements, Washington.

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