Photo by Artem Beliaikin on Unsplash Production of boiler chickens (those raised for their meat, not eggs) in the US...
Crisis Hits Farmers: Some face labor shortages, others face customer shortages
US agriculture is suffering major setbacks related to the Coronavirus outbreak. Stay-at-home orders have caused a significant decline in restaurant business, forcing many to temporarily close or cut down to pick-up and delivery service only. Additionally, airlines have been grounded, cruise ships are no longer leaving ports, theme parks have closed, and school has been cancelled. These and other hospitality-related businesses are major destinations for fresh fruits and vegetables. As a result, farmers have millions of pounds of produce they cannot sell. While some of it will be donated to food banks and shelters, much of it will simply be destroyed. Harvesting is much more expensive, and the product is perishable.
US agriculture is suffering major setbacks related to the Coronavirus outbreak. Stay-at-home orders have caused a significant decline in restaurant business, forcing many to temporarily close or cut down to pick-up and delivery service only. Additionally, airlines have been grounded, cruise ships are no longer leaving ports, theme parks have closed, and school has been cancelled. These and other hospitality-related businesses are major destinations for fresh fruits and vegetables. As a result, farmers have millions of pounds of produce they cannot sell. While some of it will be donated to food banks and shelters, much of it will simply be destroyed. Harvesting is much more expensive, and the product is perishable.
On the supply side, farms that would like to harvest their food have faced major uncertainty over finding labor to do the job. As part of a global travel shut down, the State Department announced a suspension of routine visa processing, including temporary farm workers. Under pressure from the agriculture industry, they relaxed some of the requirements for most seasonal workers. However, it is still unclear if farms will get the labor they need.
Discussion Questions:
- If supply and demand both decrease, what do you expect to the equilibrium price and quantity of produce?
- What do you expect to happen to the equilibrium price and quantity for substitutes for fresh produce (e.g. frozen and canned fruits and vegetables)?
- At the same time that farmers cannot get migrant labor to harvest their crops, millions of foodservice workers are being laid off. Could farmers simply hire these workers to harvest their crop? Discuss in term of transferability of skills between jobs/tasks, as well as labor mobility.
Sources: Miami Herald “’It’s catastrophic.’ Coronavirus forces Florida farmers to scrap food they can’t sell” by Carlos Frías and Kevin G. Hall; The Washington Post “Suspension of visa processing for Mexican seasonal workers hits U.S. farms, fisheries” by Tracy Jan and Laura Reiley; News Dakota “State Department Will Keep Processing Seasonal AG Worker Visas” by Todd Ingstad.
