Labor Demands and Hiring Practices of Southern Cattle-Dairy Farmers Under H-2A Program’s Current Guidelines and Proposed Modifications

The following are among this project’s research outputs:

Academic Journal Articles, M.S. Graduate Theses/Master of Agribusiness (MAB) Technical Research Papers and Outreach/Research Bulletins

1. Gutierrez-Li, A., Melo, G., Burney, S., Escalante, C., & Acharya, S. R. (2024). Automatic Milking Systems: Labor-Savings Route or Costly Gamble for Dairy Farmers? Choices, Issue 39 Quarter 4(39)
2. Peña-Lévano, L., S. Burney, J. Salfer, J. Clark, L. Garcia Covarrubias and C. Escalante. "Automated Milking Systems: A Case Study of a U.S. Midwest Dairy Farm Decision-Making Process." Applied Economics Teaching Resources (2025). Forthcoming.
3. Peña-Lévano, L., S. Burney, L. Garcia Covarrubias and J. Salfer. "Labor Constraints and Automation Trends in California and Wisconsin Dairy Farming." Choices (2025). Forthcoming.
4. Escalante, C.L., S. Ghimire, and S. Acharya.  “Recent H-2A Wage Hikes’ Divergent Effects on Workers’ Welfare and Farm Business Viability.” Journal of the American Society for Farm Managers and Rural Appraisers, 88,1 (2025):  In Press.
5. Acharya, S. and C.L. Escalante. “Does the Adverse Effect Wage Rate Adversely Affect H-2A Employment Decisions?”  Under Review at the Journal of Agricultural and Applied Economics.
6. Yewande, R. (MAB Technical Paper, expected May 2025 graduation), “The Profitability Effect of Rising Adverse Effect Wage Rates.”
7. Ghimire, S. (MAB Technical Paper, expected May 2025 graduation), “The Labor Welfare and Business Viability Repercussions of Recent Adverse Effect Wage Rate Hikes.”
8. Escalante, C.L. (Project Report for Georgia Farm Sector’s AEWR Freeze/Rollback Appeal), “Recent Adverse Effect Wage Rate Hikes and Declining Net Income Margins for the U.S. and Georgia Farm Sectors.”
9. Zhang*, J. and Melo, G. Livestock Farmers’ Perspectives on H-2A Program Reforms.
10. C.L. Escalante, J. Emmanuel, and B. Gaire. “H-2A Wage Violations Against Workers Hired by Farm Labor.” Farm Management/Finance Mondays. December 16, 2024.  Available at https://southernagtoday.org/2024/12/16/h-2a-wage-violations-against-workers-hired-by-farm-labor-contractors/.
11. C.L. Escalante. “Hiring H-2A Workers through Farm Labor Contracts.” Southern Ag Today.  Farm Management/Finance Wednesdays. July 24, 2024. Available at https://southernagtoday.org/2024/07/24/hiring-h-2a-workers-through-farm-labor-contracts/.
12. A. Gutierrez-Li and C.L. Escalante. “The Costs and Benefits of Mechanization: A Look at the Dairy Sector.” Southern Ag Today.  Farm Management/Finance Wednesdays. April 17, 2024.  Available at https://southernagtoday.org/2024/04/17/the-costs-and-benefits-of-mechanization-a-look-at-the-dairy-sector/
13. A. Gutierrez-Li. Feeding America: How Immigrants Sustain US Agriculture. Center for the U.S. and Mexico. Houston: Rice University’s Baker Institute for Public Policy. July 19, 2024. https://www.bakerinstitute.org/research/feeding-america-how-immigrants-sustain-us-agriculture

Results from Choice experiments with beef cattle farmers

Despite experiencing labor difficulties and showing strong interest in a guest worker program, most proposed reforms in Congress—such as shortening the process, allowing worker mobility, and permitting year-round jobs—are not of interest to beef cattle farmers and do not influence their likelihood of adoption. (they don’t like to pay for it)

Wages remain the most critical factor in adopting the H-2A program. Beef cattle farmers, likely due to their flexible labor demand, are particularly interested in reforms related to peripheral job eligibility, such as local transportation and processing. On average, they are willing to pay $2.85/hour higher wage to adopt a guest worker program that allows workers to perform peripheral tasks.

Livestock Farm Labor Survey Findings

This project’s survey results reveal some interesting, important trends in livestock labor demand and utilization.  The following are the notable patterns of labor use:

• LESS LABOR INTENSIVE: Livestock farm operations are generally less labor-intensive as more than half of the respondents (57.14 and 61.41 percent) have no more than 2 full-time and part-time employees, respectively.  Notably, more than 30 percent of the respondents reported not hiring any full-time and part-time employees
• HIRING CHALLENGES: Majority of the respondents (73.54 percent) did not experience hiring difficulty to meet their farms’ labor needs. Among those that disclosed otherwise, their challenges lie in their domestic hiring decisions (14.01 percent).  Among this subset of farms with hiring issues, 59.71 percent disclosed that their worker recruitment and hiring issues began during the pre-pandemic period.  About 30 percent of these farms reported experiencing hiring challenges since the pandemic period.
• LONGER WORK TENURE: Work tenure in livestock farms seems to be longer than probably realized in other industries in the farm sector.  Statistics indicate that more than half of the farms (53.48 percent) experience employee retention rates of more than 75 percent, with only about 33 percent dealing with retention rates of 50 percent and below.  On the other hand, more than 80% of the farms hire new workers comprising 25% or less of their existing workforce.  Only about 8 percent accommodate new hires accounting for more than 50% of their labor complement.
• TRAINING BENEFITS: More than 30 percent of the farms CONSTANTLY provide training to their workers while 28 percent NEVER provide any workers’ training benefits.  About 16 percent of the farms provide training for their workers only upon their hiring.
• WORKER RECRUITMENT STRATEGIES: When farms need additional workers, the respondents’ most popular recruitment strategies are (in order of preference):
  • Increase (or offer) higher wages
  • Maximize family members’ involvement in farm work operations
  • Downward adjustment in skill level to accommodate more potential work applicants
  • Offer additional fringe benefits to workers.
• HIGHER DEPENDENCE ON DOMESTIC LABOR: Two-thirds of this survey’s livestock farm respondents rely on domestic residents for their labor requirements.  Among farms that rely heavily on domestic labor, 40% of these farms employ at most two workers, with another 39 percent hiring 3 to 6 workers.  Among farms with foreign workers, the comparable hiring rates are 23 and 45 percent, respectively.
• COMPARISONS BETWEEN DOMESTIC AND FOREIGN WORKERS: The survey collected the farm employers’ assessment of their domestic and foreign workers according to these (a) employees’ availability (promptness and being at farm business’ disposal when needed), (b) loyalty (employee retention until end of work contract, which is crucial to business operating continuity), (c) affordability (factoring in costs, including hiring contingency costs and compensation packages), (d) flexibility (willingness to do a variety of tasks), and (e) work productivity (any gaps in expected and realized workers’ output productivity).  A comparative analysis of the respondents’ assessments reveals the following trends:
  • Foreign workers can be relied on more for their advantages over domestic workers in terms of availability, flexibility, and work productivity. Specifically,
    • More than 46 percent of the respondents gave the best convenience rating (5) to foreign workers, compared to only 32.13 percent for domestic workers. The combined percentage of 4 (high convenience) and 5 (highest convenience) for foreign workers is 83.18 percent while the comparable figure for domestic workers is only 51.62 percent.  This validates farmers’ usual favorable impression of their foreign workers as prompt, disciplined employees.
    • Farm employers also rate their foreign workers highly on their reliability and flexibility as these workers are usually willing to perform a variety of tasks. More than 76 percent of the respondents give foreign workers the two highest convenience ratings, with only about 61 percent giving the same ratings to domestic workers.
    • More than 71 percent of farm employers cite foreign workers (with “convenience” ratings of 4 or 5) for providing them with work productivity levels that exceeded expected rates. Domestic workers receive the same ratings only among 57 percent of the respondents. Several empirical works validate this result as they contend that overall gains from foreign workers’ remarkably higher productivity levels often rationalize their continued employment, despite the increasing costs of hiring foreign labor.
  • On the other hand, the advantage of hiring domestic workers lies in these workers’ loyalty and affordability. Specifically,
    • Domestic workers’ highest loyalty rating is given by 43.91 percent of the respondents, while only 37.84 percent of the farmers give the same rating to foreign workers. This is an interesting result for livestock farms as other studies establish that domestic workers’ retention is a serious issue among crop farms.  It is possible that local workers find that work in livestock operations could be less tenuous and risky than in crop farms.
    • Domestic workers are more affordable than foreign workers. More than 30 percent of the farmers provide the highest affordability convenience rating for domestic workers while foreign workers are given the same rating by 21.43 percent of the respondents.  Possibly, responses pertaining to foreign labor employment are mostly influenced by H-2A employment experiences.  Existing program provisions regulating H-2A wages and the mandatory provision of several fringe benefits indeed make the H-2A employment alternative as relatively more expensive than hiring domestic workers.

RELIANCE ON H-2A LABOR

Livestock producers do not generally employ large numbers of H-2A workers, unlike specialty crop producers. Those who do, tend to mostly hire them directly, as only a few rely on external services like those of independent contractors, employer associations or the USDA. This pattern is not surprising, by virtue of the rules associated with the H-2A program. Under the government regulations, agricultural employers can only hire H-2A workers for performing seasonal tasks. Such provision does not negatively affect fruit and vegetable growers significantly, as they need most of their labor during harvest season. However, livestock production takes place every single day, leaving animal sector farmers out of H-2A labor for the most important production tasks. Nevertheless, farmers can still hire H-2A workers for seasonal work, and some do.

The few livestock farmers employing H-2A workers generally feel that the cost of accessing this kind of labor is substantial. Almost two thirds indicated that H-2A costs were either moderately burdensome (26.47%) or very burdensome (38.24%), while only 17.65% said they did not find them burdensome at all. This pattern is similar to what farmers in most industries elicit, that is, that while the H-2A program is effective at giving them access to a reliable workforce, the costs are high and growing, making the program prohibitive to most small and medium-size farmers.

LABOR COSTS

Wages are a top expense for any producer. We asked respondents to provide the average wage paid to three types of workers. Of those hiring U.S. workers, more than 50% pay north of $13 dollars an hour, with more than 11% indicating paying more than $19 an hour. In the case of TN visa workers (highly-educated foreign workers), while some livestock producers rely on them, the majority of respondents (about 88%) do not. A similar situation can be seen for H-2A workers who are not as present on livestock farms as domestic workers and those who are, are generally paid according to the rules of the program, meaning at least the adverse effect wage rate dictated every year by the government for each state and different based on the tasks performed by individuals.

For a little bit less than half of the sample (46.86%), labor costs represent less than 5% of total costs. This suggests that livestock producers have other expenses that top that of their wage bill. Some could include machinery, pesticides, and the animals themselves. Interestingly, only 4.26% of respondents indicated that labor costs account for 26% or more of their total costs, which highlight that the industry is less labor dependent than other agricultural sectors.

In terms of labor costs, specifically hourly wages, there are mixed results regarding their change in the past two years. While 41.39% of respondents said wages have increased in this period of time, a similar number indicated there has been no change (40.52%). Notably, less than 1% have seen a decline in wages in the recent past. The observed differences may be explained by different labor needs across operations based on their size. Alternatively, labor availability is different across regions in the U.S. based on many factors, which could lead to some areas having to pay less for workers while others might be competing for labor to other industries like construction or specialty crops, forcing employers to increase compensation to recruit and retain workers.