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CapitalPress.com
Friday, January 14, 2022
American Farm Bureau Federation
Labor shortages unlikely to ease Crop prices competing
with farm input inflation
By MATEUSZ PERKOWSKI
Capital Press
ATLANTA — Labor short-
ages will likely continue afflict-
ing farmers for the foreseeable
future as the U.S. recovers from
the coronavirus pandemic, a top
agricultural economist predicts.
The U.S. is facing a confus-
ing labor situation, with people
“sitting on the sidelines” despite
plentiful employment opportuni-
ties, said Veronica Nigh, an econ-
omist with the American Farm
Bureau Federation.
“Where are the workers? Why
isn’t everyone back?” Nigh said
Dec. 10 during AFBF’s annual
convention in Atlanta, Ga.
The answer appears to be a
fundamental shift in priorities for
many Americans due to the coro-
navirus pandemic, she said. “The
last two years have changed peo-
ple in a lot of ways.”
While there is a stereotype
about young people who prefer
to play video games than to work,
federal statistics don’t necessarily
bear that out.
In reality, the percentage of
people in their mid-20s to their
mid-50s who are employed has
returned to pre-pandemic levels,
Nigh said.
However, the percentage of
older “baby boomers” returning
to the workforce has not recov-
ered — and they represent a large
chunk of the total population, she
said.
The virus likely provided a
“reality check” for many older
workers, who decided they don’t
want to “die at their desk,” she
said.
Apart from older people who
haven’t gone back to work,
there’s also been a surge of inter-
est in self-employment, Nigh said.
The number of applications for
new businesses has spiked sharply
during the pandemic, she said.
Workers who faced lay-offs at
the onset of COVID-19 realized
that “their employment is not guar-
anteed,” she said.
That led to the realization that
“maybe I can do this,” in terms of
starting new companies, she said.
By MATEUSZ PERKOWSKI
Capital Press
Veronica Nigh, economist for the American Farm Bureau Federa-
tion, speaks Jan. 10 about labor shortages.
The rise in business appli-
cations is partly driven by peo-
ple who’ve taken so-called gig
jobs, driving people or delivering
food, but Nigh said there’s more
to the story.
There’s been a similar surge
in “high propensity businesses,”
which employ multiple people,
she said.
“We’ve got a lot of business
applications for folks who are
going to employ others,” Nigh
said. “We’ve got a lot more com-
petition for those workers who
are out there.”
More young working-age
people are pursuing education
beyond high school, which ulti-
mately bodes well for the U.S.
economy, she said.
People with degrees beyond
high school tend to weather eco-
nomic downturns better, Nigh
said. “More resiliency in the
workforce means more resiliency
in the economy.”
While that outcome would
be positive in the long term, it’s
unlikely the farm industry will be
able to employ as many workers as
it needs, she said.
“I don’t see that going away any
time soon,” Nigh said.
For the farm industry, the
problem of insufficient work-
ers isn’t new — and some grow-
ers will probably be forced to
adjust.
Farmers who grow labor-inten-
sive specialty crops aren’t likely to
stop, but they may shift to plants
that are more easily cultivated and
harvested mechanically, she said.
“We’re no strangers to labor
shortages,” Nigh said.
ATLANTA — Increased crop
and livestock revenues surpassed
rising farm expenses last year, but
growers can’t count on a repeat in
2022.
While strong crop prices and
federal relief money kept farm prof-
its healthy in 2021, inflation poses a
credible threat in the coming year.
“Even though we have high
commodity prices, high input costs
are going to weigh on that,” said
John Newton, chief economist
with the U.S. Senate Agriculture
Committee.
Farmers earned about $117 bil-
lion in net income in 2021, the sec-
ond-highest profit since the $124
billion they generated in 2013, he
said at the American Farm Bureau
Federation’s annual convention in
Atlanta, Ga.
However, crop prices are not
guaranteed to outpace the inflation
of fertilizer costs and other inputs
during 2022, Newton said.
“You don’t know what that
crop’s going to be worth until you
take it out of the ground,” he said
Jan. 9.
Last year, growers spent $388
billion on inputs, which was also
the second-highest amount in his-
tory, Newton said.
The hike in nitrogen prices and
other expenses is foremost in farm-
ers’ minds in the upcoming grow-
ing season, and will likely affect
planted acreage and fertilizer
investment, he said.
Crop prices have benefited from
the surge in exports to China, which
topped $30 billion last year, he said.
“The question that remains is
what happens now,” Newton said.
“How strong will they continue to
be?”
Federal assistance is another
area of uncertainty.
The COVID-19 pandemic
prompted the federal government
to spend $34 billion to offset farm
losses, Newton said.
Federal aid for agriculture will
likely be winding down but Con-
John Newton
gress is still expected to spend
another $10 billion on coronavirus
relief in 2022, he said.
“We do expect that to continue,”
Newton said. “We know there will
be new disaster funding coming.”
While the Biden administra-
tion’s “Build Back Better” legis-
lation includes hefty spending on
agriculture, it hasn’t won over the
American Farm Bureau Federation.
The organization is opposed to
the bill, which also aims to invest in
social and environmental programs,
due to its cost and associated tax
revisions that are intended to raise
federal revenue.
The proposal includes about $90
billion for agricultural conservation
programs, rivaling the $119 billion
spent on such investments in the
2018 Farm Bill, Newton said.
The problem is the spending
hasn’t been vetted by agricultural
committees in Congress, he said.
Farmers should also be allowed to
weigh in on the proposal.
“They’re attempting to pass the
equivalent of a farm bill without any
stakeholder engagement,” Newton
said.
The bill currently appears to be
stalled but elements of the agricul-
tural plan may survive in a scaled-
back future version, he said.
Newton said he’d want such a
proposal to be fully scrutinized by
lawmakers of both parties as well as
the farm industry.
“We need to get back to biparti-
sanship,” he said. “We need to get
back to working together.”
Vilsack vows ‘voluntary and incentive-based’ climate strategy for farms
deprive other programs of
funds, Vilsack said.
Likewise, the USDA
isn’t planning to take an
active role in creating mar-
kets for carbon credits,
such as those growers could
earn for reducing emissions,
he said.
Such efforts should occur
in the private market, Vil-
sack said. Even so, the
USDA wants to help grow-
ers tap into that potential.
“This is about creating
new revenue streams, addi-
LEGAL
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MATTHEW LEE RATHBURN
MSU FEDERAL CU
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THOMAS & MEGAN KELLY
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imported Asian products,
current supply chain prob-
lems have changed that
dynamic.
Ocean carriers are now
taking back more empty
containers without wait-
ing for them to be filled
with U.S. farm goods, since
they’re needed to bring
products back to America.
“We are working on the
areas where we have con-
trol,” Vilsack said, referring
to the container program
and advocacy to extend
port operating hours, among
other efforts.
Ensuring that ports and
other transportation facili-
ties work effectively is crit-
ical for agriculture but so
is the enforcement of trade
deals, he said.
Exports to China, for
example, have been strong
under a phase one trade
agreement but that doesn’t
mean the U.S. will look past
phytosanitary restrictions
that needlessly restrict ship-
ments, Vilsack said.
“We are going to press
China on the need for com-
plete enforcement and com-
plete implementation,” he
said.
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download speeds will allow
farmers to take full benefit
from precision agriculture
tools, he said. “I’m excited
to get this technology in
the hands of farmers.”
Farmers
collectively
earned strong profits last
year but that doesn’t reflect
the experience of every
grower, Vilsack said.
Specific
crops
and
regions may not fully gain
from the industry’s suc-
cesses, he said. “Income
doesn’t necessarily go
up in every part of the
country.”
To that end, USDA is
deploying disaster relief
dollars to help growers
affected by wildfires and
other problems, he said.
Exports are crucial for
the farm industry, which
is why the federal govern-
ment is focused on clear-
ing up port congestion.
For example, the gov-
ernment is creating incen-
tives for ocean shippers to
fill containers with Asian-
bound farm exports, he
said.
While farm goods typ-
ically rely on empty con-
tainers once filled with
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U.S. Secretary of Agriculture Tom Vilsack
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ATLANTA — Farm-
ers have a role to play in
fighting climate change but
they shouldn’t be coerced,
according to USDA Secre-
tary Tom Vilsack.
Agriculture has the
potential to profit from
reducing carbon emissions
through “climate smart”
conservation practices, Vil-
sack said Jan. 10 during
the American Farm Bureau
Federation’s annual con-
vention in Atlanta, Ga.
“We know it has to
be voluntary and incen-
tive-based,” he said. “It
can’t be regulated.”
The USDA is using
the Environmental Qual-
ity Incentives Program, or
EQIP, and the Conserva-
tion Stewardship Program,
or CSP, to help farmers
use methods such as cover
crops to sequester carbon.
While the USDA plans
to encourage such farm-
ing practices with money
from the federal Commod-
ity Credit Corporation —
which disburses farm sup-
port dollars — it will not
tional revenue streams,” he
said. “We can be the first
agriculture in the world to
do so, which would give us
a market advantage.”
Vilsack has returned to
the role of USDA secretary
under the Biden administra-
tion after previously serving
in that capacity during the
Obama administration.
Zippy Duvall, AFBF’s
president, said he consid-
ered Vilsack a friend and
appreciated his responsive-
ness to the organization’s
concerns.
“When I text the sec-
retary, he texts me back,”
Duvall said. “When I call
the secretary, he calls me
back.”
The USDA is poised to
speed the farm industry’s
adoption of new technology
with the passage of a major
federal infrastructure bill
last year, Vilsack said.
“We finally got the job
done,” he said.
The bill will improve
the farm industry’s ability
to get products to port but
it’s also going to expand
access to broadband inter-
net, Vilsack said.
Faster data upload and
By MATEUSZ PERKOWSKI
Capital Press