By Jenny Mills, NEAFA Vice President
As part of the Northeast Agribusiness and Feed Alliance’s efforts to collaborate and advocate for agriculture, NEAFA is a coalition member of Grow NY Farms.
The Grow NY Farms coalition was formed to represent the agricultural community specifically with regard to farm labor issues. The organization is committed to demonstrating how New York’s farm community has direct impact on urban, suburban and rural consumers and the economy of the state. Currently, the question of the overtime threshold is front and center because a farm labor wage board is charged with making a recommendation as to when time and a half wages should kick in. The current 60 hours per week threshold could be lowered to 40 based on the wage board’s recommendation. A campaign, funded by a broad cross section of the agriculture community, is underway to convince the wage board that the right number for farmworker overtime in New York is 60. Anything less than 60 will force dramatic changes to New York agriculture.
As many of us in agriculture are asked about the impact that rising labor costs on dairy farms (and subsequentially the entire ag economy), a new white paper addressing labor cost, efficiency and change was just released as a Cornell Pro-Dairy bulletin, authored by Jason Karszes and Christopher Wolf of the Dyson School of Applied Economics at Cornell University.
A link to the paper can be found by clicking here. (website: E.B. 2021-05 Hired Labor on New York Dairy Farms Final.pdf (cornell.edu))
The paper details trends from farms that have participated in the Dairy Farm Business Summary (DFBS) program over the past ten years. The main findings of the paper are as follows:
As farm size increased from 2010 to 2020, dairy farms have utilized more hired labor. Hired labor provides over 85% of all labor on larger dairy farms in New York. As farm size grew and farms utilized more hired labor over this period, total payroll costs also increased.
This change was driven not only by the increase in the amount of hired labor, but also by the rising costs of the hired labor.
The change in the hourly cost of hired labor varied from year to year. However, the rate of change has increased over the last five years, with the highest jump in the hourly cost of hired labor occurring from 2019 to 2020.
While labor costs have been increasing as measured by total payroll and cost per hired labor hour, cost per hundredweight of milk has also risen, unfortunately at a slower rate.
Dairy farms have offset some of the increase in cost per hired labor hour by improvements in labor efficiency.
Without these increases in labor efficiency, increasing costs associated with hired labor would have had a much larger negative impact on earnings.
While improvements in labor efficiency have partially offset the increase in hired labor cost per hour and resulted in a lower increase in cost per hundredweight of milk sold, any costs associated with achieving the improvements in labor efficiency are not captured or analyzed within the report. A subset of farms that participated in the DFBS had a capital investment per cow increase of 46.8% from 2019 to 2020.
Many different areas may impact labor efficiency on a dairy farm, such as farm size, growth of farm, technology, automation, improved training & retention of employees, utilization of custom services, etc. The costs associated with the improvement however may offset any cost saving due to improvements in labor efficiency, and may lead to decreases in farm earnings.
As our industry continues to educate key stakeholders on the impacts of mandatory overtime changes that are being considered, Grow NY Farms will continue to be at the forefront, hosting events to educate and advocate for our entire agriculture community – farm workers, managers, owners and suppliers. Check out their website for more information: grownyfarms.com