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Farm-Level Implications of Changes in the Levels of the Immigrant Farm Labor

Charity Greene, Omowunmi Odeyomi, and Godfrey Ejimakor

Summary

Both documented and undocumented immigrant farm labor play important roles in the US agricultural sector. Many livestock producers and meat processors rely on the immigrant labor pool for their operations. Anticipated changes in immigration policy at the national level could result in a reduction in the supply of such workers. A reduction of farm workers at the farm level is expected to result in an increase in the price of livestock such as hogs. The expected increase in the price of whole livestock is expected to result in a decrease in the supply of processed meat. The anticipated labor shortage is also expected to result in additional reductions in the supply of processed meat. This chain of events is expected to result in more volatility in prices of livestock products at both the retail and farm levels. Producers who are able to access information on such price and quantity changes will be in a better position to plan production activities in order to take advantage of the changes. We use information on the farm-level demand for hogs to illustrate the expected impact of immigrant labor shortages on farm-level price, production and income. We assume labor shortages that could result in 5%, 10%, and 15% and 20% reductions in supply of hogs. We conclude that due to the inelastic nature of the farm-level demand for hogs, producers of hogs could benefit in the form of increased revenues if labor shortages result in price increases for hogs.

Details

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