Dairy Farmers Face Labor Challenges Never Seen Before

From rural small towns to the bustling big city, help wanted signs have been hung in nearly every business window. Dairy farmers are no strangers to the pain of labor shortages. This has been a problem on their plates for the last decade. However, what makes this pressing issue even worse is a tighter, more competitive labor market. And unfortunately, this appears to be a trend with no foreseeable end in sight.

“You and your farms are looking at a much more competitive world than we’ve ever seen before, and labor rates are just going to keep going up,” says Dan Basse, President of AgResource Company, during the Professional Dairy Producers Dairy Insights Summit. “This is not going to change or turn around unless one thing happens – immigration reform.”

According to Basse, new immigration reform in the U.S. would allow new employees to come in for the right jobs at the right time. However, he doesn’t see this coming down the policy pipeline anytime soon.

“I'm here to tell you that the labor market is never looking back to where it has been for the past four years,” he says.

Data from the U.S. Chamber of Commerce states that the U.S. currently has more than 10 million job openings, but only around 6 million unemployed workers. This means that if every unemployed person in the country found a job, we would still have more than 4 million open positions.

Higher Competition

Basse states that there are several factors contributing to the labor shortage, including competition in an already tight market.

“Just the other day I saw that McDonald’s was offering its employees $17 an hour,” Basse says. “Just a few years ago, they were only offering around $7. That makes it really hard for dairy farmers to compete.”

Smaller Labor Pool

A potentially declining U.S. population is another contributing factor to the ongoing labor shortage.

“This may be the first year our population actually declines,” Basse adds. “Couples just aren’t having two babies anymore. So, I think America going forward is going to find itself where the population demographics will turn negative. Which means less workers.”

Invest in Technology

As dairy farmers face labor challenges that are worse than ever before, Basse says now is the time to consider investing in new labor-saving technology.

“I would tell any farmer, and I think their bankers would say the same thing, because of the labor situation, if there are ways to technologically advance your dairy operation, it’s a good investment,” he says. “Things like robotic milkers and robotic feeders. Anything that can cut down on labor costs is a good investment for the future, because all I can tell you is that labor costs are just going to keep going up.”

The 2022 Milk Business Conference, hosted at the Paris Las Vegas Hotel and Casino Dec. 13-15, will address key labor issues surrounding today's dairy farmers. Labor panels include:

• Refine Retention: A Conversation on How to Keep Your Good Employees
• Reshaping Your Business with Robots

To register for this year's conference, click here!