Almost half of the workforce in the United States was employed in Agriculture in 1870. But thanks to a series of technological innovations–from the plow to the tractor to irrigation systems–value added per agricultural worker in the U.S. now amounts to more than $79,000 each year, compared with a global average of about $3,200. U.S. farming has become so productive that just 1.6 percent of the workforce produces far more food than the population consumes domestically. As a result, the U.S. exports more food than any country in the world, with agricultural exports valued at $140 billion in 2018.
Farm exports and income fall despite strong economy
In recent months, the industry has hit a rocky patch, however, amid international trade disputes, falling prices for many commodities, and an unusually wet spring that delayed planting in many parts of the country. Farm exports in the first five months of 2019 were down about 5% from the same period last year, and farm income is projected to be around $95.6 billion this year, far below its 2013 peak of $135.6 billion. Soybean farmers have been hardest hit, with their largest foreign buyer, China, only importing 7 million metric tons of soybeans so far this fiscal year, down from almost 25 million during the same period a year ago.
The one saving grace for farmers is that land prices have been rising. To weather the dip in earnings, many have mortgaged the farm. That has sent farmers’ real estate debt to an all-time high, in real terms.
Impact on farmworkers difficult to measure due to scarce national data
How are the recent challenges affecting farm employment around the country? It is difficult to tell.
Overall agricultural employment appears to have flatlined over the past five years, according to data from the Current Population Survey (known as the household survey)–even as employment in other sectors has grown by more than 1.7 percent each year, on average.
But it is hard to find more granular data on farming employment across sub-industries or regions. The U.S. Bureau of Labor Statistics tracks employment, hours worked, and earnings in about 800 non-agricultural industries in its monthly establishment survey, but farm jobs are excluded because they are typically exempt from unemployment insurance requirements.
To fill in the gaps, we analyzed data on agricultural job postings and applications in ZipRecruiter’s employment marketplace, which has over 9 million active job postings at any given time* and which received 200 million job applications last year.
Here are the six key takeaways:
1. Agricultural hiring demand remains surprisingly strong
According to ZipRecruiter data, overall demand for agricultural workers remains robust. Farm job postings in the past 12 months were up 17% over the previous year, livestock jobs up 15%, and fishing jobs up 32%. But there are stark differences across the country. In rural Iowa, the average monthly agricultural job posting volume is 53% lower so far in 2019 than in 2018. We’ve also seen declines in other farming areas known for soybeans and corn, like Illinois. In California’s farming regions, by contrast, which tend to specialize in higher-value crops, like walnuts, almonds, pistachios, citrus fruits, peaches, and garlic, job posting volumes remain robust
2. Farmers are finding it harder to fill vacancies than ever before
ZipRecruiter interviewed five farmers, all of whom reported that it is increasingly difficult to recruit and retain workers. Data from the ZipRecruiter marketplace back up their claims. The average monthly number of applications per farm job fell 18 percent between 2017 and 2018, and a further 21 percent between 2018 and 2019. Filling vacancies for more senior or specialized farm manager and agronomist jobs is often even more difficult than hiring farm laborers because college-educated Americans are increasingly leaving rural and suburban areas, moving to cities, and staying there
3. Farmers are raising pay, but feel constrained
Pay for farm workers remains rock-bottom. Their median annual wage was just $24,620 in 2018, 36 percent below the median for all occupations of $38,640. But tightening labor markets are forcing farmers to offer workers more attractive terms. Farm job postings on ZipRecruiter increasingly advertise signing bonuses of between $250 and $5,000, as well as other perks, like housing or regular barbeques. Other postings emphasize job security in an industry known for temporary, seasonal work. One farmer we interviewed found that it became easier to recruit and retain workers when he shifted from employing 25 workers seasonally to employing just 20 on a permanent, year-round basis.
4. Overall compensation costs are rising more quickly than farmworkers’ take-home pay
All of the farmers we interviewed said they were nervous about raising pay further because rising input costs and falling commodity prices have already narrowed their profit margins. One farmer in California’s Central Valley discussed his compensation costs with us in some detail and stressed that overall compensation costs are rising rapidly, even if farmworkers’ take-home pay remains low. Like many farmers, he does not need year-round workers, so he relies on a labor contractor to bring crews of budders at budding time, harvesters at harvest time, and weeders or builders or diggers, as needed. While the state’s minimum wage is $12 per hour, he finds that he needs to pay $1 more than minimum wage to recruit workers. Over and above that, the farm pays 34 percent to the labor contractor, which includes workers’ compensation costs, an additional 1 percent to comply with California’s paid sick leave law, and an additional 35 cents per hour for health insurance. That amounts to about $17.80 per hour. If the state or Federal government adopts a $15 minimum wage, he anticipates that his compensation costs will rise to $22 per hour.
5. Farmers are shifting to more profitable crops and other land uses
In response to falling revenues, rising costs, and multiple risks, several farmers are shifting from vegetables and grains to higher-value crops, like dates, figs, artichokes, pomegranates, peaches, strawberries, grapes, kiwifruit, garlic, and flowers. Nuts are particularly appealing to many farmers because they are less perishable and can be stored for several months at a time when prices fall, and then sold when prices recover again. Other farmers are seeking non-agricultural ways to make money off their land, such as by renting out acreage for solar panels.
6. There are no technological silver bullets for farmers’ challenges–yet
Still other farmers are turning to new technologies. ZipRecruiter’s recent Future of Work report highlights some of the innovations that could improve productivity and reduce risk in farming. For example, we document the rise of indoor, urban farms controlled by sensors and artificial intelligence systems that monitor yield and adjust how much water and light each plant receives. These vertical warehouse farms can be up to 100 times more productive per square foot than traditional outdoor farms, reuse 95 percent of their water, and eliminate the need for pesticides and herbicides.
Since they are located in urban areas, close to retail locations, they also cut out the majority of the transportation, storage, and distribution costs that traditional farming entails. Crucially, their urban locations and high-tech processes also give them an advantage in the labor market. In Bowery’s indoor farms, for example, workers hold tablets, not pitchforks. As they photograph each plant, they receive AI-generated instructions on how to care for it. The work is also more appealing because it is year-round, and safe; it does not expose workers to the sun, harsh chemicals, or dangerous mechanical equipment.
While this model works well for parsley, cilantro, and basil, it does not work for things that grow on trees. Peaches and pistachios still need to be grown the traditional way. And while warehouses–or warehouse farms–are perfect environments for robots, fields and orchards–with their lumpy soil, puddles, and wind–are generally not. Due to their cost and susceptibility to the rough outdoor environment, it could be decades before we see the widespread adoption of the new robotic harvesters currently being developed and tested.
The technological changes that are widely evident across the nation’s farms are far more modest. Farms invest heavily in newer, better mechanical harvesters, for example, so that each worker can cover more acreage. When it comes to computer technologies, farms are rapidly adopting farm management software to manage, document, and optimize their operations. In parts of the country prone to drought, farmers are increasingly subscribing to data-driven diagnostic services that predict droughts and recommend strategies for mitigating the effects. We’re starting to see the effects of these advances in farm hiring patterns. In the ZipRecruiter marketplace, 6.6% of farm jobs in 2018 and 2019 have mentioned software skills, up from just 4.0% in 2017.
For the foreseeable future, however, the bulk of rural farming work will be manual or mechanical, and improvements in working conditions will be gradual. Farmers will continue to struggle to find workers–for what are often admittedly repetitive, physically taxing, and poorly paid jobs–but balk at the prospect of seeing their input costs rise further.
* ZipRecruiter Internal Data, based on data from October-December 2018.