Agriculture Prominent Factor in Idaho’s Economy

The agricultural sector in Idaho plays a major role in the state economy, contributing $3 billion  – about 5 percent of the total state gross domestic product.

Idaho is ranked first in the nation in the production of potatoes and barley – the state production accounts for more than 30 percent of the national production – and ranks fourth in the nation for milk and milk cow production. Farm productivity continues to advance and exports are increasing, yet farm income has fallen over the past several years. In the face of declining profit margins, low agriculture commodity prices and a farm labor supply shortage, the farmworker demographic is undergoing a change.

Agricultural Labor Worker Types

Source: Idaho Department of Labor

Agricultural labor estimates show a stable and consistent pattern of seasonal farm employment with peaks around October each year. In 2016, average annual employment was 51,240 with a peak employment of 61,100 in October 2016.There are three major types of workers providing labor for U.S. farms: farm operators, unpaid family workers and hired workers. About 73 percent of agricultural employment in 2016 consisted of hired labor which include field crop and livestock workers, farmworker supervisors, and hired farm managers. Farm operators or producers accounted for 26 percent of agricultural employment and only a small fraction – 1 percent – comprised unpaid family members.

The composition of the agricultural worker has undergone a series of changes over the years. The share of unpaid family members has steadily declined – unpaid family comprised 16.6 percent of agricultural labor in 1950 – and hired labor has become increasingly prominent. A more recent shift in agricultural labor is the declining share of migrating hired workers.

The Migrant Seasonal Farm Worker

In 2016, 23 percent of annually averaged hired workers were classified as migrant seasonal farm workers. During the peak month of October, the share of migrant seasonal farm workers rose to 39 percent of all hired farm workers. While hired labor in Idaho has grown steadily over the past few years, increasing by 5 percent from 2007 to 2016, the number of migrant seasonal farm workers have declined by 6 percent over the same time period.

Source: Idaho Department of Labor

The declining number of migrant seasonal farm workers is a trend observed nationwide and is at the heart of the agricultural labor supply shortage. Migrants play a key role in labor-intensive crop production, and a decrease in supply significantly reduces the labor market’s ability to respond to seasonal shifts in demand during the year.

The reasons for the declining migrant labor are varied. The declining share of shuttle migrants and follow-the-crop migrants indicate that migrant workers are increasingly reluctant to migrate long distances from any given location. This is likely tied to the natural effect of aging. As migrant workers age, they tend to settle in an area and limit their mobility. Their children are getting college educations and are generally unwilling to engage in low-paying farm labor.

Plugging the Labor Supply Shortage Gap

To supplement for the declining supply of workers during planting and harvesting seasons, farmers have gotten creative. Many have provided a variety of benefits and incentives to sustain and attract more migrant works – including raised wages. Others have turned to the H-2A guest worker program. The Idaho Department of Labor received 578 H-2A applications in fiscal year 2017, an increase of 13.6 percent over fiscal 2016 and 32 percent over 2015. The number of H-2A positions certified have almost doubled since 2013 and these temporary workers are on pace to becoming a dominant share of the migrant worker demographic.

Source: U.S. Department of Labor, Office of Foreign Labor Certification

Rising pay scales and shortages of workers have also spurred advances in automation of work traditionally done by manual labor. With the rise of precision or ‘smart’ farming, farmers can now use geo-positioning systems and sensors to more efficiently manage their lands. Drones are already being used to inspect large swaths of farmland; an agricultural robotics is a large and rapidly growing industry sector. The implication is that hired labor may face yet another change in the horizon: an increasing share of high-skilled workers.

This trend is already manifesting in recent labor projections. In the newly released 2016-2026 national projections, agricultural sector employment is predicted to grow by 17,000 jobs in 2026 with most of the job growth occurring in non-traditional agricultural occupations. In fact, farming, fishing and forestry occupations are projected to decline. While job losses are primarily from forestry occupations, agricultural workers and supervisors that form the bulk of the hired labor contribute only 1,600 jobs to the total sector projected growth.

Most of the agricultural industry jobs are projected to come from management occupations. Career paths like loss prevention management and supply chain management are likely to have a bright outlook in agriculture. With a 6.9 percent change, the life, physical and social sciences occupations are projected to be one of the fastest growing in the agricultural sector. Financial specialist jobs are also projected to grow rapidly over the next decade.

Technological advancements and growing opportunities for high-skilled labor is one way to plug the labor supply gap, attract young millennials and college graduates, and reverse the trend of aging in the agricultural industry sector.

Source: U.S. Department of Labor, Office of Foreign Labor Certification, regional economist
Idaho Department of Labor
(208) 236-6710 ext. 4331