1. Immigration Reform and the Competitiveness of Southern Agriculture John J. VanSickle & Robert Emerson International Agricultural Trade & Policy Center Food & Resource Economics Dept. UF/IFAS

2. Immigration Reform Intent is to secure the border against illegal immigrants. Intent is to secure the border against illegal immigrants. Guest worker programs have been a priority for agricultural groups to secure a stable work force. Guest worker programs have been a priority for agricultural groups to secure a stable work force. Currently in limbo as the new Congress settles in on its agenda. Currently in limbo as the new Congress settles in on its agenda.

3. Florida Farm Labor Market Changes Composition – Hispanic proportion grew from 79% in 1989-95 period to 92% in 2002-04 period. Composition – Hispanic proportion grew from 79% in 1989-95 period to 92% in 2002-04 period. Earnings – increased in real terms from $7.12/hour in 1989-98 to $8.13/hour in 2002- 04. Earnings – increased in real terms from $7.12/hour in 1989-98 to $8.13/hour in 2002- 04. Legal status – 75% of workers unauthorized in 2002-04 period. Unauthorized workers earned 57 cents/hour less in 1998, but $2.74/hour less in 2002-04. Legal status – 75% of workers unauthorized in 2002-04 period. Unauthorized workers earned 57 cents/hour less in 1998, but $2.74/hour less in 2002-04. Reduced Seasonality – Quarterly data show the range has declined from 40,000 to 100,000 in the mid-80’s to 50,000 to 70,000 in later 90’s. Reduced Seasonality – Quarterly data show the range has declined from 40,000 to 100,000 in the mid-80’s to 50,000 to 70,000 in later 90’s.

4. Florida Farm Labor Market Changes Florida fruit, vegetable and nursery growers accounted for 76% of total Florida farm labor expenses in 1978 for, but increased to 82% in 2002. Highlights the importance of labor to specialty crops. Florida fruit, vegetable and nursery growers accounted for 76% of total Florida farm labor expenses in 1978 for, but increased to 82% in 2002. Highlights the importance of labor to specialty crops. Increase in third party agreements. CIW and Taco Bell. CIW now targeting McDonalds. Increase in third party agreements. CIW and Taco Bell. CIW now targeting McDonalds.

5. Threats Related to Agricultural Labor Market Stopping the flow of unauthorized workers could increase the cost of labor in agriculture. Stopping the flow of unauthorized workers could increase the cost of labor in agriculture. Labor costs could increase as much as 10%. Some have suggested this could be as large as 30% Labor costs could increase as much as 10%. Some have suggested this could be as large as 30% Spot shortages of labor could occur when alternative opportunities are presented. Example, hurricane cleanup moved some workers out of agriculture to the hurricane struck areas, creating some pressure on growers needing harvesting labor. Spot shortages of labor could occur when alternative opportunities are presented. Example, hurricane cleanup moved some workers out of agriculture to the hurricane struck areas, creating some pressure on growers needing harvesting labor.

6. Green Peppers: Labor production costs in the Southwest Florida area 2004-2005 OPERATING COSTS --$/acre -- --$/box- -%OC--%TL- OPERATING COSTS --$/acre -- --$/box- -%OC--%TL- General Farm Labor 152.63 General Farm Labor 152.63 Tractor Driver Labor 277.72 9.06% 13.8% Tractor Driver Labor 277.72 9.06% 13.8% Total Operating Cost 5,646.83 Total Operating Cost 5,646.83 Fixed Costs 3,494.68 Fixed Costs 3,494.68 Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Pack 1,600.00 1.60 Pack 1,600.00 1.60 Pick 1,080.00 1.08 51% 86.2% Pick 1,080.00 1.08 51% 86.2% Total Harvest & Marketing Cost 4,540.00 4.54 Total Harvest & Marketing Cost 4,540.00 4.54 Total Labor 3,110.35 25.6% Total Labor 3,110.35 25.6% TOTAL COST 13,681.51 13.68 TOTAL COST 13,681.51 13.68

7. Strawberries: Labor production costs in the Southwest Florida area 2004-2005 OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- General Farm Labor 44.50 General Farm Labor 44.50 Tractor Driver Labor 283.59 10.6% 5.25% Tractor Driver Labor 283.59 10.6% 5.25% Transplant Labor 330.00 Transplant Labor 330.00 Cut runners, etc. 150.00 Cut runners, etc. 150.00 Total Operating Cost 7,612.36 Total Operating Cost 7,612.36 Fixed Costs 3,858.18 Fixed Costs 3,858.18 Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Pack 8,060.00 3.10 Pack 8,060.00 3.10 Pick 6,500.00 2.50 100 % 94.75% Pick 6,500.00 2.50 100 % 94.75% Total Harvest & Marketing Cost 14,560.00 5.60 Total Harvest & Marketing Cost 14,560.00 5.60 Total Labor 15,368.0959.0% of TC Total Labor 15,368.0959.0% of TC TOTAL COST 26,030.54 10.01 TOTAL COST 26,030.54 10.01

8. Spring Tomatoes: Labor production costs in the Manatee Ruskin area 2004-2005 OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- General Farm Labor 181.61 General Farm Labor 181.61 Tractor Driver Labor 305.47 13.3% 14.5% Tractor Driver Labor 305.47 13.3% 14.5% Tie Plants 145.20 Tie Plants 145.20 Total Operating Cost 4,752.17 Total Operating Cost 4,752.17 Fixed Costs 2,158.61 Fixed Costs 2,158.61 Harvest & Marketing Costs --$/acre -- --$/box-- -%HC---%TC- Harvest & Marketing Costs --$/acre -- --$/box-- -%HC---%TC- Pack 2,557.50 1.65 Pack 2,557.50 1.65 Harvest 1,162.50 0.75 70.8 % 85.5% Harvest 1,162.50 0.75 70.8 % 85.5% Total Harvest & Marketing Cost 5,254.50 3.39 Total Harvest & Marketing Cost 5,254.50 3.39 Total Labor 4,352.283 5.78% of TC Total Labor 4,352.283 5.78% of TC TOTAL COST 12,165.29 7.85 TOTAL COST 12,165.29 7.85

9. Fall Tomatoes: Labor production costs in the Manatee Ruskin area 2004-2005 OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- General Farm Labor 181.61 General Farm Labor 181.61 Tractor Driver Labor 365.94 10.9% 16.9% Tractor Driver Labor 365.94 10.9% 16.9% Total Operating Cost 5,023.34 Total Operating Cost 5,023.34 Fixed Costs 2,294.43 Fixed Costs 2,294.43 Harvest & Marketing Costs--$/acre -- --$/box-- -%HM---%TL- Harvest & Marketing Costs--$/acre -- --$/box-- -%HM---%TL- Pack 1,815.00 1.65 Pack 1,815.00 1.65 Pick 880.00 0.80 71.2% 83.1% Pick 880.00 0.80 71.2% 83.1% Total Harvest & Marketing Cost 3,784.00 3.44 Total Harvest & Marketing Cost 3,784.00 3.44 Total Labor 3,242.55 29.2% of TC Total Labor 3,242.55 29.2% of TC TOTAL COST 11,101.77 10.09 TOTAL COST 11,101.77 10.09

10. Watermelons: Labor production costs in double crop for Manatee Ruskin area 2004-2005 OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC---%TL- General Farm Labor 300.88 General Farm Labor 300.88 Tractor Driver Labor 40.47 24.4% 40.8% Tractor Driver Labor 40.47 24.4% 40.8% Total Operating Cost 1400.50 Total Operating Cost 1400.50 Fixed Costs 697.30 Fixed Costs 697.30 Harvest & Marketing Costs --$/acre -- --$/box-- -%HM---%TL- Harvest & Marketing Costs --$/acre -- --$/box-- -%HM---%TL- Harvest & Pack 496.00 1.55 59.6% 59.2% Harvest & Pack 496.00 1.55 59.6% 59.2% Total Harvest & Marketing Cost 832.00 2.60 Total Harvest & Marketing Cost 832.00 2.60 Total Labor 837.35 28.5% of TC Total Labor 837.35 28.5% of TC TOTAL COST 2,929.80 9.16 TOTAL COST 2,929.80 9.16

11. Labor costs for major specialty crops in Florida Watermelons 26,000 acres Watermelons 26,000 acres Total value $127 million Total value $127 million Labor costs $21.7 million Labor costs $21.7 million Peppers 19,000 acres Peppers 19,000 acres Total value $213 million Total value $213 million Labor costs $59.1 million Labor costs $59.1 million Strawberries – 7,500 acres Strawberries – 7,500 acres Total value $196 million Total value $196 million Labor costs $115 million Labor costs $115 million Tomatoes – 42,000 acres Tomatoes – 42,000 acres Total value $846 million Total value $846 million Labor costs $183 million Labor costs $183 million

12. Strawberries: Labor production costs in the Southwest Florida area 2004-2005 OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- General Farm Labor 44.50 General Farm Labor 44.50 Tractor Driver Labor 283.59 10.6% 5.25% Tractor Driver Labor 283.59 10.6% 5.25% Transplant Labor 330.00 Transplant Labor 330.00 Cut runners, etc. 150.00 Cut runners, etc. 150.00 Total Operating Cost 7,612.36 Total Operating Cost 7,612.36 Fixed Costs 3,858.18 Fixed Costs 3,858.18 Harvest & Marketing Costs --$/acre -- --$/box- -%HM- --%TL- Harvest & Marketing Costs --$/acre -- --$/box- -%HM- --%TL- Pack 8,060.00 3.10 Pack 8,060.00 3.10 Pick 6,500.00 2.50 100 % 94.75% Pick 6,500.00 2.50 100 % 94.75% Total Harvest & Marketing Cost 14,560.00 5.60 Total Harvest & Marketing Cost 14,560.00 5.60 Total Labor 15,368.09 59.0% of TC Total Labor 15,368.09 59.0% of TC TOTAL COST 26,030.54 10.01 TOTAL COST 26,030.54 10.01

13. Strawberries: Labor production costs +10% in the Southwest Florida area OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- General Farm Labor 48.95 General Farm Labor 48.95 Tractor Driver Labor 311.95 11.6% 5.25% Tractor Driver Labor 311.95 11.6% 5.25% Transplant Labor 363.00 Transplant Labor 363.00 Cut runners, etc. 165.00 Cut runners, etc. 165.00 Total Operating Cost 7,693.17 Total Operating Cost 7,693.17 Fixed Costs 3,858.18 Fixed Costs 3,858.18 Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Pack 8,866.00 3.41 Pack 8,866.00 3.41 Pick 7,150.00 2.75 100 % 94.75% Pick 7,150.00 2.75 100 % 94.75% Total Harvest & Marketing Cost 16,016.00 6.16 Total Harvest & Marketing Cost 16,016.00 6.16 Total Labor 16,904.9061.3% of TC Total Labor 16,904.9061.3% of TC TOTAL COST 27,567.35 10.60 (5.9% increase) TOTAL COST 27,567.35 10.60 (5.9% increase)

14. Strawberries: Labor production costs +30% in the Southwest Florida area OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- OPERATING COSTS --$/acre -- --$/box-- -%OC- --%TL- General Farm Labor 57.81 General Farm Labor 57.81 Tractor Driver Labor 368.41 13.3% 5.25% Tractor Driver Labor 368.41 13.3% 5.25% Transplant Labor 428.70 Transplant Labor 428.70 Cut runners, etc. 150.00 Cut runners, etc. 150.00 Total Operating Cost 5,646.83 Total Operating Cost 5,646.83 Fixed Costs 3,858.18 Fixed Costs 3,858.18 Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Harvest & Marketing Costs --$/acre -- --$/box-- -%HM- -%TL- Pack 10,470.75 4.03 Pack 10,470.75 4.03 Pick 8,444.15 3.25 100 % 94.75% Pick 8,444.15 3.25 100 % 94.75% Total Harvest & Marketing Cost 18,914.90 7.28 Total Harvest & Marketing Cost 18,914.90 7.28 Total Labor 19,964.6965.1% of TC Total Labor 19,964.6965.1% of TC TOTAL COST 30,627.14 11.78 (17.7% increase) TOTAL COST 30,627.14 11.78 (17.7% increase)

15. How Will Growers Adjust Technology will let some commodity groups adjust – citrus to mechanical harvesters, other crops to harvesting aids. Technology will let some commodity groups adjust – citrus to mechanical harvesters, other crops to harvesting aids. Some growers will likely shift to other less labor intensive crops. Some growers will likely shift to other less labor intensive crops. The above adjustments will also allow growers to capitalize on the labor pool that remains. Strawberry growers may benefit from labor that shifts out of citrus harvesting.

16. What growers can do to safeguard their labor pool? Pay the market rate for labor. Watch the labor market like you do your product market. Pay the market rate for labor. Watch the labor market like you do your product market. Be a model employer Be a model employer Institute a fail-safe method of recording time that is fair to the employee and your company. Institute a fail-safe method of recording time that is fair to the employee and your company. Plan planting schedules that create a steady flow of employment throughout the season. Consider alternative crops (diversify) to help keep a steady flow of labor needs. Plan planting schedules that create a steady flow of employment throughout the season. Consider alternative crops (diversify) to help keep a steady flow of labor needs.

17. Immigration Reform and the Competitiveness of Southern Agriculture John J. VanSickle & Robert Emerson International Agricultural Trade & Policy Center Food & Resource Economics Dept. UF/IFAS