Importance of Agricultural Workers

For the US, labor is the agricultural sector’s third largest production expense (considering all cash and noncash expenses) trailing only feed and capital depreciation. For 2008, wages paid to hired farmworkers are forecast to be $27.3 billion, and the share of workers classified as hired has increased significantly.

After declining for decades, labor’s share of US farm expenses began increasing in the mid-1980s. Growers who specialize in vegetable, fruit, tree nut, or horticultural production, for whom labor costs total 30-40 percent of cash expenses, are especially sensitive to fluctuations in the cost and availability of labor, and are likely the largest employees of hired workers.

The first figure above shows that the US and Colorado have followed a fairly similar trajectory, but Colorado’s expenditures have increased more rapidly than the national average in more recent years. These trends can be disaggregated in several ways to provide more information about the dynamics of labor usage.

The number of workers (Figure 2 above) have seen significant variability in the prime growing season, fluctuating between 13,000 and 20,000 workers, with no clear pattern between the number employed more continuously (over 150 days in a year) and those hired for shorter terms. No year-round numbers are available, but July should represent a typical month without peak employment (like planting or harvest) and with some demand for seasonal work.

These trends lead to some questions: Are Colorado producers…

• Demanding fewer workers while paying more for those selected?

• Diversifying and adapting their production systems to use workers over a longer period of employment?

• Facing shortages that impact their ability to produce, harvest or choose specific crops?