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Rural employment has returned to pre-COVID-19 pandemic level

Wednesday, February 21, 2024

The Coronavirus (COVID-19) pandemic affected employment in rural and urban areas differently. Before the pandemic, employment growth was higher and unemployment rates were slightly lower in urban areas. However, these trends reversed during the pandemic. In the second quarter of 2020, urban employment fell to 88 percent of prepandemic (Q1 2019) employment levels, while rural employment fell to 90 percent of prepandemic levels. Unemployment during the pandemic reached a high of 13.3 percent in urban areas and 11.4 percent in rural areas, compared with prepandemic rates of 3.8 and 4.2 percent, respectively. Rural and urban employment grew quickly in the third and fourth quarters of 2020 as many sectors of the economy reopened. Employment growth slowed in 2021, but more in rural areas than in urban. Urban employment recovered to prepandemic levels by the first quarter of 2022, and the urban unemployment rate dropped below the rural rate once again in the second quarter of 2022. Meanwhile, the slow employment growth rate in rural areas in 2022 (0.5 percent) was similar to rates in the years between the Great Recession of 2008 and the COVID-19 pandemic. From 2010 to 2019, the annual average employment growth rate in rural areas was 0.4 percent compared with 1.6 percent in urban areas. Rural employment recovered to prepandemic levels in the third quarter of 2023, more than one year after urban employment did. Rural unemployment rates in 2023 were at their lowest point (3.6 percent) since before 1990. This figure updates data in the USDA, Economic Research Service report Rural America at a Glance, published in November 2023.

Paycheck Protection Program loans provided $5.8 billion to U.S. farm sector in 2020

Monday, October 23, 2023

Researchers at the USDA, Economic Research Service estimate that the Paycheck Protection Program (PPP) provided $5.8 billion to the farm sector in 2020. The PPP was a non-USDA assistance program for small businesses adversely affected by the pandemic. Total Federal Government payments to the farm sector in 2020 were $45.6 billion, meaning that PPP payments were 13 percent of total payments. The Small Business Administration (SBA) administered the PPP, providing forgivable loans to eligible small businesses and certain other entities to allow them to cover some of their payroll costs. Businesses had to meet specific eligibility requirements, such as having positive payroll and/or making profits. The PPP loans were forgiven in full if the loan was used on eligible expenses, including at least 60 percent on payroll expenses. Agricultural producers in California were the largest recipients of PPP loans at $1.1 billion, followed by Washington at $285 million. California leads the Nation in the value of agricultural production and has the highest hired labor expense among States. Other top recipients of PPP loans included Texas ($281.5 million), Iowa ($252.6 million), Illinois ($251.8 million), and Florida ($247 million). The latest publicly available data from the SBA show almost all the PPP loans (98 percent) made to the farm sector in 2020 have been forgiven. This map updates information in COVID-19 Working Paper: Distribution and Examination of Coronavirus Food Assistance Program Payments and Forgivable Paycheck Protection Program Loans at the State Level in 2020, published August 2023.

Employment in U.S. agriculture grew 6 percent between 2012 and 2022

Tuesday, October 3, 2023

Data from the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) show wage and salaried employment in agriculture stabilized in the 2000s and has been on a gradual upward trend since 2010. U.S. agriculture employment rose from 1.11 million jobs in 2012 to 1.18 million jobs in 2022, a gain of 6 percent. Employment growth was fastest in crop support services (27,500 jobs added, a 12-percent increase) and the livestock sector (31,400 jobs added, a 10-percent increase). Crop support services firms provide specialized services to farmers, including labor contracting and custom harvesting. By comparison, employment of direct hires in the crop sector, which has the largest number of hired farm workers, grew 1 percent. Data from QCEW are based on unemployment insurance records, not on surveys of farms or households. As a result, they do not cover smaller farm employers in States that exempt such employers from participation in the unemployment insurance system. However, survey data sources such as the U.S. Department of Commerce, Census Bureau’s American Community Survey and Current Population Survey also show rising farm employment since the turn of the 21st century. This chart appears in the USDA, Economic Research Service topic page Farm Labor, updated in August 2023.

Agricultural labor expenses forecast to increase by almost 2 percent in 2023

Monday, September 11, 2023

Total cash labor expenses for the U.S. agriculture sector are forecast to be $43.35 billion for 2023, based on the August 2023 forecast by USDA, Economic Research Service. This would be an increase of $0.78 billion, or 1.8 percent, over the 2022 level of $42.57 billion (in inflation-adjusted 2023 dollars). The projected 2023 level would remain below the high set in 2017 in inflation-adjusted labor expenses. Labor expenses are an important component of agricultural production costs. For every $100 spent on production expenses, almost $10 goes toward labor. Total labor expenses include contract and hired labor payments but exclude non-cash employee compensation. This information updates information in the Amber Waves article U.S. Agriculture Labor Expenses Forecast To Increase More Than 4 Percent in 2023, published in July 2023.

Florida, California, and Georgia accounted for one-third of H-2A jobs in FY 2022

Tuesday, May 30, 2023

In 2022, 35 percent of the total jobs available through the H-2A visa program for temporary foreign agricultural workers were in three States. The U.S. Department of Labor certified around 370,000 temporary jobs in fiscal year (FY) 2022 under the H-2A program. This program enables U.S. agricultural employers anticipating a shortage of domestic workers to fill seasonal farm jobs with temporary foreign workers. The top 3 States were Florida, with 14 percent of total H-2A jobs certified, California, with 12 percent, and Georgia, with around 9 percent. Other States in the top 10 included Washington with around 9 percent; North Carolina with 7 percent; Michigan, Louisiana, and Arizona each with 4 percent; and Texas and New York with 3 percent each. Increases in employment were particularly large in California, which gained over 11,000 H-2A jobs, a 35-percent increase from 2021. H-2A certifications increased in all U.S. States except Georgia (which declined by less than 1 percent), Delaware (20 percent decline), and Alaska (no change), compared with 2021. Not all certifications lead to the issuance of H-2A visas. In 2021, 258,000 H-2A visas were issued, whereas, in 2022, this number increased to 298,000. This chart updates information in the USDA, Economic Research Service report The H-2A Temporary Agricultural Worker Program in 2020, published in August 2022.

Rising farm worker wages suggest tightening farm labor markets

Thursday, January 5, 2023

Between 2000 and 2022, the real (inflation-adjusted) hourly wage rate of hired farm workers increased by 28 percent. Growth in the average wage rate of hired farm workers during that period outpaced hourly wage growth of nonfarm workers by 11 percentage points. Further, the gap between real farm wages (which tend to be lower) and real nonfarm wages had narrowed. In 2011, the hourly wage of farm workers was 57 percent of the nonfarm wage rate; by 2021 this had increased to 63 percent. Increases in farm workers’ wages have been observed across the entire U.S. agricultural sector, suggesting the tightening of farm labor markets. The U.S. fresh fruit and vegetable industry is more exposed to rising wages because produce cultivation tends to be labor-intensive and labor costs represent a significant share of production expenses. Agricultural producers are managing tight labor markets by hiring foreign farm workers, reducing labor needs through mechanization, or in some cases, decreasing production of labor-intensive crops such as cantaloupe, fresh field-grown tomatoes, iceberg lettuce, and raisin grapes. This chart is drawn from the USDA, Economic Research Service’s report Adjusting to Higher Labor Costs in Selected U.S. Fresh Fruit and Vegetable Industries, published in August 2022.

Most employers use third parties when applying for H-2A worker positions

Wednesday, October 19, 2022

U.S. farmers who would like to hire temporary foreign workers through the H-2A visa program usually work with a third party (such as an agent, association, or lawyer) to make the application; employers themselves filed applications for only 15 percent of all jobs requested. Across the U.S., agents filed applications for 45 percent of all H-2A jobs, an association of farm enterprises filed for 21 percent of jobs, and 19 percent came from a lawyer representing the farmer. However, the usage rates for third parties differ across States. For instance, lawyers tend to file for most of the jobs in California, while agents and associations account for almost two-thirds of the job filings in Florida. The H-2A program allows farm operators who foresee a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. temporarily to perform agricultural labor or services. Many employers rely on specialized third parties to file H-2A applications on their behalf because of the perceived complexity of the process to certify their need for labor. Once a job is certified, the employer may then search for workers to employ. This chart appears in the ERS Economic Information Bulletin, The H-2A Temporary Agricultural Worker Program in 2020, published in August 2022.

Off-farm occupation farms had the largest percentage of farms managed by principal operators under 55 years of age in 2020

Wednesday, October 12, 2022

Almost a quarter of farm operations are run by a principal operator who is under 55 years old. The principal operator is the person most responsible for making day-to-day decisions. In comparison, 63 percent of U.S. self-employed workers in nonagricultural industries are younger than 55, according to the U.S. Bureau of Labor Statistics. In 2020, midsize family farms, which have a gross cash farm income of $350,000 to $999,999, and off-farm occupation farms, which are small operations whose principal operators report a primary occupation other than farming, had the largest percentage of farms managed by principal operators younger than 55 years, at 36 percent and 38 percent, respectively. Retirement farms had the smallest percentage (2 percent) of farms managed by a younger principal operator. For many family farms, the farm is also the home, and the principal operator can gradually phase out of farming or transition management to the next generation. Improved health and advances in farm equipment also allow principal operators to farm later in life than in previous generations. This figure updates information from the 2015 ERS report America’s Diverse Family Farms.

H-2A seasonal worker program has expanded over time

Monday, October 3, 2022

U.S. agricultural employers who anticipate a shortage of U.S. domestic workers can fill seasonal farm jobs with temporary foreign workers through the H-2A visa program. The Department of Labor certified around 317,000 temporary jobs in fiscal year (FY) 2021 under the H-2A visa program, more than six times the number certified in 2005. Only about 80 percent of the certified jobs in 2021 resulted in the issuance of a visa. The program has grown partly in response to current U.S. domestic workers finding jobs outside of U.S. agriculture and a drop in newly arrived immigrants who seek U.S. farm jobs. The H-2A program continued to expand in FY 2020 despite the jump in U.S. unemployment caused by lockdowns associated with the Coronavirus (COVID-19) pandemic. Six States accounted for about half of the H-2A jobs filled in 2021 certified: Florida, Georgia, Washington, California, North Carolina, and Louisiana. Nationally, the average H-2A contract in FY 2020 offered 24 weeks of employment and 39.3 hours per week at an average hourly wage of $13. This chart updates information in the ERS bulletin The H-2A Temporary Agricultural Worker Program in 2020, published in August 2022.

Specialty crop farms have the highest labor cost as a portion of total cash expenses

Tuesday, September 20, 2022

A farm's reliance on farm labor varies by commodity specialization. On average, labor costs (including contract labor, hired labor, and worker benefits such as insurance) accounted for about 14 percent of the total farm cash expenses in 2020. Farms specializing in the production of specialty crops, which include fruits, tree nuts, vegetables, beans (pulses) and horticultural nursery crops, had the highest labor costs across farm types, with labor accounting for almost 40 percent of total cash expenses. In contrast, operations specializing in corn and soybeans spent the least on labor costs as a percentage of total cash farm expenses (4 percent and 3 percent, respectively) in 2020. Corn and soybean farms have lower farm labor expenses resulting from higher adoption rates of labor-saving innovations, such as technology, chemical herbicides, etc. This chart updates data found in the Economic Research Service report Farm Size and the Organization of U.S. Crop Farming, published in August 2013.

Labor quality change, especially educational attainment, contributes positively to U.S. agricultural growth

Monday, April 18, 2022

Agricultural output in the United States nearly tripled between 1948 and 2017, with average annual output growth at 1.53 percent. While reduction of labor hours worked has contributed negatively, changes in labor quality have contributed positively to output growth over the years. Labor quality includes shifts in composition of demographic attributes, such as gender, age, educational attainment, employment type and other factors. ERS researchers group the study period into 12 sub-periods in accordance with U.S. economic business cycles (from peak to peak). Most of the contraction in total hours worked occurred between 1948 and 1969, during the expansionary period after World War II. By the 2007–17 economic business cycle, the decline in labor hours had its lowest negative effect on output growth, -0.16 percentage points. ERS researchers found that total labor quality had a positive effect on output growth in all economic business cycles except the 1979-81 period. The effects of labor quality on agricultural output growth were especially prominent before 1969. It accounted for nearly 25 percent of total output growth per year in the 1948–53, 1953–57, and 1960–66 subperiods, and 14 percent of annual output growth in the 1966-69 subperiod. Except for the period immediately after WWII, the major source of labor quality changes was an increase in educational attainment among farmworkers. On average, the increase in educational attainment accounted for more than 90 percent of the changes in labor quality between 1948 and 2017. Nevertheless, since 1969, the rise in educational attainment has slowed, and the overall influence of labor quality on output growth has diminished. This chart is drawn from the USDA, Economic Research Service report “Farm Labor, Human Capital, and Agricultural Productivity in the United States,” published Feb. 15, 2022.

U.S. labor productivity per hours worked grew from 1948 to 2017 in part because of changes in quality of labor, study finds

Wednesday, February 16, 2022

Agricultural output in the United States nearly tripled between 1948 and 2017 even as the amount of labor hours-worked declined by more than 80 percent. These opposing trends resulted in an increase in labor productivity growth in the U.S. farm sector. Labor productivity—calculated as average output per unit of labor input—is a popular measure for understanding economic growth. According to USDA, Economic Research Service (ERS) estimates, agricultural output per worker grew by 16 times from 1948 through 2017. At the same time, agricultural output per hour worked grew even faster, by 17 times, implying that average hours worked per worker declined. Labor productivity estimates can vary based on different ways labor is measured. One factor in the increased labor productivity is the quality of labor, measured by attributes such as age, gender, and the highest level of education a worker has reached. Because these attributes may affect worker performance, ERS researchers accounted for labor quality changes in analyzing farm labor productivity. When labor quality changes since 1948 were accounted for, labor productivity grew at a slower rate than those based simply on hours worked or employment. The reason is because labor quality is treated as a part of labor input instead of productivity. This implies that changes in labor quality, such as improvements in education, account for much of the change in labor productivity over the last seven decades. ERS researchers estimate that changes to farm worker attributes accounted for about 13 percent of growth in hourly based annual labor productivity during the time studied. This chart in included in the ERS report Farm Labor, Human Capital, and Agricultural Productivity in the United States, published Feb. 15, 2022.

Gap between H-2A positions certified and H-2A visas issued grew during COVID-19 pandemic

Wednesday, October 20, 2021

The H-2A Temporary Agricultural Workers Program attracts foreign farmworkers on temporary work visas to fulfill short-term labor contracts. All positions to be filled with H-2A workers are first certified by the Department of Labor, then U.S. consulates issue corresponding visas. The number of positions certified each year generally exceeds the annual number of visas issued, in part because an H-2A worker may fill multiple positions on the same visa. At the onset of the Coronavirus (COVID-19) pandemic, temporary changes to H-2A program rules provided visa extensions to H-2A workers already in the country and allowed them to more easily switch to certified positions with other employers. In the first few months of the pandemic, the gap between positions certified and the number of visas issued grew. Position certifications typically peak in March, while visas issued peak a month later as workers begin work. In March and April 2020 combined, a record 81,000 positions were certified, and 57,000 visas were issued during the corresponding months of April and May. This difference is larger than previous years and suggests that proportionally fewer certified positions were filled with new H-2A entries in 2020. This chart first appeared in the USDA, Economic Research Service (ERS) report, Farm Labor Markets in the United States and Mexico Pose Challenges for U.S. Agriculture, published in November 2018, and has been updated through 2020. For more information on how H-2A visas have fulfilled seasonal labor requirements, see the ERS report Examining the Growth in Seasonal Agricultural H-2A Labor, published in August 2021, and the Amber Waves feature “Use of H-2A Guest Farm Worker Program More Than Triples in Past Decade,” published in September 2021.

H-2A certifications increased 225 percent between 2010 and 2019

Friday, September 10, 2021

H-2A is a Federal program that allows employers in the United States to bring in foreign workers on short-term labor contracts when farm operators cannot find enough domestic workers. Over the last decade, H-2A positions certified by the U.S. Department of Labor increased 225 percent—from 79,175 in 2010 to 257,674 in 2019. Each position certified was placed within one of the five product categories: animal products, field crops, fruit and tree nuts, greenhouse and nursery, and vegetables and melons. All categories experienced some growth in program use over the period, but growth was highest in the vegetables and melons and fruit and tree nuts categories. The number of H-2A positions certified in the vegetables and melons category increased from 20,584 in 2010 to 88,863 in 2019—an increase of 332 percent. This chart appears in the Economic Research Service report, Examining Growth in Seasonal H-2A Agricultural Labor, released August 2021.

Employment in U.S. agriculture grew 9 percent between 2010 and 2020

Friday, September 3, 2021

Data from the U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) show that wage and salary employment in agriculture was stable in the 2000s. Starting in 2010, it gradually increased from 1.07 million jobs to 1.17 million jobs in 2020—a gain of 9 percent. From 2010-20, growth was fastest in the livestock sub-sector, which added 41,300 jobs, an 18 percent increase, and in crop support services, which added 38,000 jobs, a 13 percent increase. Firms in the crop and livestock support sub-sectors provide specialized services to farmers including farm labor contracting, custom harvesting, and animal breeding services. By comparison, employment of direct hires in the crop sub-sector, which has the largest number of hired farm workers, remained essentially unchanged. Data from QCEW is based on unemployment insurance records, not on surveys of farms or households. As a result, it does not cover smaller farm employers in States that exempt such employers from participation in the unemployment insurance system. However, survey data from sources such as the American Community Survey and the Current Population Survey also showed rising farm employment since the turn of the century. This chart appears in the Economic Research Service topic page for Farm Labor, updated August 2021.

Average age of hired farm workforce increased from 2006 to 2019

Monday, June 14, 2021

With fewer young immigrants entering the U.S. farm workforce, the average age of foreign-born hired farmworkers rose in 2019. That, in turn, pulled up the average age for the U.S. farm workforce as a whole. According to the latest data from the American Community Survey, the average age of foreign-born farmworkers increased by nearly 7 years from 2006 to 2019, from 35.7 to 41.6 years. In contrast, the average age for farmworkers born in the United States remained roughly constant over the same period. The average age of all farmworkers increased from 35.8 years in 2006 to 39.5 years in 2019. U.S. farmworkers, who make up less than 1 percent of the Nation’s workforce, are more likely to be Hispanic of Mexican origin and less likely to be citizens than are workers in occupations other than agriculture, according to the American Community Survey. This chart updates data found in the October 2020 Amber Waves data feature, “U.S. Farm Employers Respond to Labor Market Changes With Higher Wages, Use of Visa Program, and More Women Workers.”

Largest shares of women principal farm operators found on poultry and other livestock operations in 2019

Wednesday, June 9, 2021

Women play an integral part in farming, either as a principal operator or as a secondary operator. In 2019, more than half (51 percent) of all farming operations in the United States had a woman principal or at least one woman secondary operator. Women were primarily responsible for the day-to-day operation decisions—the “principal operator”—on 14 percent of farms. In 37 percent of operations, women were “secondary operators,” meaning they were involved in decisions for the operation but were not the principal operators. The share of principal farm operators who were women varied by commodity specializations. In 2019, the two largest shares of women principal operators were found on farms specializing in poultry (31 percent) and other livestock (about 30 percent). Operations specializing in dairy production had the largest share of operations with at least one woman secondary operator, about 54 percent. The smallest share (about 33 percent) of women operators, either principal or at least one secondary, was found on cotton farms. Among operations with at least one woman operator, 78 percent of the women were the principal operator’s spouse and worked on the farm. This chart is found in the Economic Research Service report, America’s Diverse Family Farms: 2020 Edition, released December 2020. It also appears in the June 2021 Amber Waves article, “Women Identified as Operators on 51 Percent of U.S. Farms in 2019.”

Women accounted for an increasing share of hired farm workforce from 2009 to 2018

Monday, March 8, 2021

From 2006 to 2009, the share of women in the hired farm workforce decreased slightly, but then climbed from 18.6 percent in 2009 to 25.5 percent in 2018. Hired farmworkers (which exclude self-employed farmers and their families) make up less than 1 percent of all U.S. wage and salary workers, but the overall number of hired farmworkers has remained relatively unchanged over this same period. Hired farmworkers often work in the production of fruits, vegetables, melons, dairy, and nursery and greenhouse crops. As can be seen from the rise in percentage from 2009 to 2018, in recent years, more women have taken on farm work. Overall, farm wages have risen over this period along with changes in the mix of capital and labor farms use during production. These changes may have resulted in a gradual shift in the share of women who comprise the hired farm labor force. This chart appears in the October 2020 Amber Waves data feature, “U.S. Farm Employers Respond to Labor Market Changes With Higher Wages, Use of Visa Program, and More Women Workers.

Real wages for hired U.S. farmworkers rose between 1990 and 2019

Friday, November 27, 2020

Hired farmworkers make up less than 1 percent of all U.S. wage and salary workers, but they play an essential role in labor-intensive industries within U.S. agriculture, such as the production of fruits, vegetables, melons, dairy, and nursery and greenhouse crops. Farm wages have risen over time for nonsupervisory crop and livestock workers (excluding contract labor). According to data from the USDA’s Farm Labor Survey, real (inflation-adjusted) wages rose at an average annual rate of 1.1 percent between 1990 and 2019. In the past 5 years, real farm wages grew even faster at an average annual rate of 2.8 percent. This is consistent with growers’ reports that the longstanding supply of workers from Mexico has decreased, as growers may respond over time by raising wages to attract workers from other sources. The gap between farm and nonfarm wages has slowly shrunk but is still substantial. In 1990, the average wage for nonsupervisory farmworkers—$9.80 an hour in 2019 dollars—was about half the $19.40 wage of private-sector nonsupervisory workers in the nonfarm economy. By 2019, the $13.99 farm wage was 60 percent of the $23.51 nonfarm wage. This chart appears in the October 2020 Amber Waves data feature, “U.S. Farm Employers Respond to Labor Market Changes With Higher Wages, Use of Visa Program, and More Women Workers.”

Demand for direct-hire labor in agriculture is seasonal

Wednesday, August 5, 2020

The ongoing COVID-19 pandemic has decreased labor availability in many sectors of the economy. In agriculture, labor inputs consist of unpaid farm operator labor (including spouse and family labor), direct-hire labor, and labor contracted through a third party. In 2018, 62 percent of total farm labor hours were unpaid, while the remaining 38 percent were paid. The majority (82 percent) of labor expenditures were to compensate hired employees, while 18 percent were spent on contracted labor. Paid labor hours are concentrated in certain time periods and regions, largely reflecting the importance and cyclicality of specialty crop production (which includes fruits, vegetables, and nursery crops). In the Atlantic region, paid labor hours peaked in the first quarter, whereas in the rest of the country, labor hours peaked in the second or third quarters. The Western region of the United States accounted for 35 percent of total employee labor hours, and the bulk of labor hours (37 percent) were recorded in the third quarter. If last year’s patterns hold, demand for farm-employed labor in the West could steadily increase and peak in the summer months. While the data in this chart predate the COVID-19 pandemic, agricultural workers have been deemed essential and information on the demand for these workers can provide insight into the potential impacts of the pandemic. This chart is based on data from the Economic Research Service data product, ARMS Farm Financial and Crop Production Practices, updated July 2020.