Labor is expensive and it has grown more expensive since COVID-19. When it comes to turnover, leading experts say a producer shouldn’t just chalk it up that an employee left for more money. Pausing to understand your workforce’s needs can help minimize turnover in the long run.
“Labor costs are about 14% of dairy’s total cash expenses,” says Stan Moore with Michigan State University Dairy Extension.
The recent USDA Ag Prices Report outlined that labor expenses were up 7.3.% compared to 2020—across all farms.
Moore says the highest impact was with specialty crops, followed by dairy coming in second.
Tanner Ehmke, the lead dairy economist with Co-Bank, says that other industries, like construction, compete directly with farm labor.
“They’re competing for the same people and right now construction is often paying more than farm work,” he says. “If we continue to see the fed raise interest rates at the pace they’re doing right now, that will push the housing markets in some of these important [dairy] areas, like California into a recession.”
Ehmke says that this perhaps will push more available farm labor into the dairy workforce, as people exit construction work and start looking for work elsewhere.
Moore says regardless of labor availability, those struggling to keep employees need to start talking to your employees who have stayed, as well as those who chose to leave—and find out what the common problems are.
“Ask them what they liked about working on the farm and what they didn’t like, or what is making them leave,” he says. “Often it is hard to get a clear answer on this from employees that are leaving, as many don’t want to burn bridges…and those that do, may overstate a problem.”
In 2019, Farmers Assuring Responsible Management (FARM) Workforce Development issued a nationwide labor survey report to understand current labor practices on U.S. dairy farms. The survey was conducted by the Center for North American Studies (CNAS), part of Texas A&M University.
The research points to areas for improvement, including highlighting that the average turnover rate for surveyed dairies was 38.8%. While this is lower than the national average of turnover for the private sector (47.1%), it is still higher than ideal, especially when dairies report a high level of difficulty in filling open positions.
Moore also shares for those producers who continually struggle to keep employees that now might be the time to start looking for labor-saving technology and production methods that will allow you to trim labor hours and increase compensation/benefits.
FARM has numerous free workforce development resources available on their website available in both English and Spanish, including performance evaluation forms. Learn more by going to:
Worker Safety & Human Resources | National Dairy FARM Program
