JUL. 26, 2021
The lack of workers for low-wage jobs is impacting farms, some of which are now trying to fill in the labor gaps by hiring high school workers looking for summer jobs. While the problem of short-handed farms pre-dates the current labor shortage, farms are now having to compete with other industries suffering from labor shortages. Unfortunately, many farms cannot offer increased wages and benefits being offered by restaurants, trash services, etc., nor can they offer weekends off, air conditioning, or work that isn’t labor intensive. These factors have made farm work a tough sell to workers in a market where labor is in high demand and short supply. July’s Purdue University Ag Economy Barometer showed two-thirds of farmers having at least some difficulty hiring adequate labor for their operation, up from 30 percent a year ago.
Ag News Highlights
China ag purchases remain strong
China’s aggressive buying of U.S. grain is expected to continue, but volatility in grain prices has pushed China to wait for price drops before committing to further purchases. Still, China has already imported over 57 million metric tons of soybean, corn, and sorghum, which is a sharp increase over the 15 million metric tons last year, when trade was disrupted by the pandemic. In addition, another 14 million metric tons of corn and soybeans have already been contracted for delivery after harvest.
The optimism regarding future China purchases revolves around their hog herd, which is mostly fed via imported grains and which they are in the process of rebuilding following the effects of African Swine Fever. According to Kenneth Scott Zuckerman, lead grain and farm supply economist with CoBank, “The combination of steady pork production, higher slaughter rates, and currency tailwinds suggests the Chinese appetite for U.S. feed grains will remain strong.”
Drought impact on cattle industry
Intense drought conditions in the western U.S. have resulted in more than 15 million beef cattle grazing on drought-stricken land. In past droughts, ranchers would typically buy more hay to replace limited grazing options on pastureland – but droughts this year extend far enough east to make this practice challenging.
With fewer options to keep the cattle well-fed, ranchers are having to cull herds. This practice was common in 2020 due to a bottleneck at slaughterhouses resulting in low demand for cattle, but this time it is simply the result of an inability to feed the entire herd. Previously, ranchers would be able to sell parts of their herds to other parts of the country where grazable land was more plentiful, but again the size of the current drought has eliminated that option for many ranchers. Despite this, the meat shortages seen a year ago are not likely to be repeated as meat imports are filling the gaps caused by these weather-related difficulties.
Drought also impacting wheat crop
Conditions for the spring wheat crop are poor as 98 percent of the growing area is experiencing drought. This is especially bad for hard red spring (HRS) wheat in the Northern Plains. HRS ratings in the good to excellent categories dropped from 20 to 16 percent this week, compared with a five-year average of 66 percent.