Managing Rising Labor Costs in Farming

Commercial farming operation costs have more than doubled in the last decade, and hired labor costs are a significant contributing factor to this. Ongoing labor shortages in 2022 have driven these costs as operators are paying more to keep or attract their workers. In fact, labor costs are often one of the largest operating expenses in the commercial farming space. Although the reliance on labor positively impacts farming operations, increasing labor costs has startled many players in commercial farming. Now, there are many reasons for the consistent increase in labor expenses.

Today, several elements are changing the labor cost structure for commercial farms. Health insurance, immigration reform, increased competition, labor compliance management, Occupational Health and Safety  regulations, and increasing minimum wage are some of the elements for rising labor costs.

As rising farm labor costs become a serious issue, growers are looking to new innovations to help optimize their labor use. Here are some of the ways that they are doing this.

Labor Effectiveness

While it is a new concept that stems from the manufacturing industry, commercial vegetable farmers can utilize labor effectiveness to take a closer look at the costs, productivity, and corresponding profitability. Contrary to misguided perception, labor effectiveness is different from labor efficiency. Labor effectiveness is about identifying disruptive elements that increase labor costs and decrease performance. One way of achieving this is by reviewing startup and cleanup practices. Changeover in crops or at the start and end of growing seasons is very labor intensive. By finding efficiencies with the way materials like polyethylene mulch film are removed overall operating costs can be decreased for example.

More and more growers are using products like FilmOrganic which can be directly tilled into the soil rather than an extensive removal process. Mechanizing the cleaning process allows farm workers to divert their efforts to other farm work and can also help extend the growing season as the removal time is reduced significantly. Those farm operations that are reliant on migrant workers are able to allocate labor to time sensitive tasks to maximize work visas and worker availability.

Advances in automation technologies, self-driving vehicles and robots are impacting farm operations by allowing technology to replace human labor. These advancements require investment capital in equipment, facilities, machinery, and technology to minimize the impact of rising labor costs. Technology in agriculture has hit a point of adoption that the investment costs are lower and will continue to decrease as more turn to this type of farm investment strategy. But this requires a significant shift in financial approach as farm operations are minimizing operational expenses (labor) but increasing capital expenditures which may initially result in high carrying costs. 

Reducing Waste

While farmers are some of the most environmentally conscious people with a true understanding of sustainability and regenerative practices, new product developments in recent years can help further support farming that is ecologically sustainable. More and more farms are shifting to biodegradable products that can break down and add material and nutrients back into the soil. Such developments are most prevalent with plastics. Shifting to biodegradable plastic products for on farm use can help eliminate the labor costs required for the removal and disposal of traditional plastic products. 

Final Thoughts 

Whether it’s covering the cost of skilled labor or paying for manual labor, the need of the hour dictates the adoption of new tactics to manage optimized commercial farming operations.

When dealing with large-scale commercial farm operations to produce melons, strawberries, and vegetables, use advanced tech tools, make capital investments, and streamline processes to mitigate the impact of rising labor costs.

It would be fair to state that farming is still a conservative industry. In retrospect, this makes it all the more important for commercial farmers to implement new strategies to manage rising labor costs.