What immigration means for cheap food

A reader, Lynn Ripley, sent me a link to this article from the New York Times: What a Crackdown on Immigration Could Mean for Cheap Milk

What Peter does know, however, is that without foreign-born workers, his dairy could not stay afloat. Americans are understandably reluctant to perform dirty, dangerous and demanding work — what economists call 3-D jobs — as long as they have better alternatives. Unemployment in southern Idaho has averaged 3.4 percent for a decade; wages for entry-level workers on Peter’s farm are competitive with those for cashiers at fast-food franchises. He can’t pay much more, he insists, and still break even.

The issue for dairy farms is that the system is structured so the cost of production exceeds the price dairy farmers can get for their milk.

The problem, as Peter sees it, is that the price of everything in America has gone up except the price of milk. In the 1980s, a tractor cost him roughly $60,000, the federal minimum wage was $3.35 and his first hundred pounds of Class III milk — the kind used in making yogurt and cheese — sold to a processing plant for $12.24. Since then, many of his expenses have doubled or tripled. During the Covid-19 pandemic, Peter says, his costs soared, and they still haven’t come down. Fuel-tank fittings that cost him about $2,000 in 2014 now run $13,000. Mechanics who once charged $60 an hour now charge $95.

And one other problem: monopsony (market control by a single buyer).

So Peter, like almost every dairyman in the country, sells his milk through a co-op. Twice a day an insulated truck drains about 75,000 pounds of freshly pumped milk from his holding tanks. A couple of weeks later, Peter finds out what he will be paid in return.  “We’re not price makers,” Peter said. “We’re price takers.”

This system is not sustainable now, and it will be even less sustainable if the threatened roundup of immigrants takes place.

Dairy is not the only industry likely to be affected.  Think: farm work, meat packing plants, slaughter houses, back-of-the-house restaurant and foodservice work, house cleaning, childcare, eldercare, and all the other menial, low-wage jobs nobody else wants to do.

This system is not sustainable either.

Maybe Make America Healthy Again can take this on?