Category: Specialty Topics

A central focus throughout the Biden-Harris Administration has been addressing the issue of racial equity. In January of 2021, the administration issued an executive order on advancing racial equity and support for underserved communities through the federal government citing disparities in laws, public policies, public, and private institutions. In response to the Racial Equity Executive Order, The United States Department of Agriculture has admitted that its programs have a flawed design, and because of that and the discriminatory behaviors of individuals over many decades, it recognizes that there are existing barriers for underserved producers. As organizations begin to navigate the 2023 Farm Bill, research has shown there is a need for equity to continue making changes for Socially Disadvantaged Farmers and Ranchers. 

The Socially Disadvantaged Farmers and Ranchers Policy Research Center at Alcorn State University (The Policy Center) has developed several policy recommendations for the 2023 Farm Bill that aim to address the many years of systemic and historic discrimination. These recommendations range from the need to eliminate the use of the term “historically underserved producer” to the elimination of the FSA State and County Committee System, all supported by external research conducted on behalf of the policy center and listening sessions with the farmers and ranchers seeking equitable experiences in agriculture. 

Also, at the center of Farm Bill discussions are the 1890 land-grant institutions (the 1890s), historically black universities established under the Second Morrill Act of 1890, that have been historically underfunded. The 1890s were not provided with research and extension funds until 1977, with inequities continuing between 1862 land-grant institutions (1862s) and 1890s since then. In “The Equity in Agricultural Production and Governance” drafted by The Farm Bill Enterprise, it states that NIFA’s 2016 Annual Review Report displayed a stark disparity of AFRI funding, with the 1862s receiving over 82% of the funding, and the 1890s receiving 1.2%. They further discuss that while all states provide 1862s with adequate funds 1890 Institutions, in 10 of the 18 states where they are present, have been continuously underfunded or receive no funding. While the direction of the 2023 Farm Bill is uncertain, there is still hope for equitable spaces to be carved out in agriculture. 

Author: April Love

Policy Analyst and Attorney

Alcorn State University

Too many agribusiness owners struggle to convert website visits into sales. The first step is to answer three critical questions in less than ten seconds with the content in the header section of your website. 

To demonstrate the use of these three questions, we reviewed the Palo Blanco Farms website and gave them suggestions for their website. 

What Do You Offer?

Palo Blanco Farms first noted that they sold healthy and sustainable food in the header section of their website, which was vague. We learned that they earn 70% of their revenue from selling organic microgreens, so this main product should be featured in the header. Also, we suggested they add details about what microgreens are. Microgreens are a nutritious and natural way to add veggies to your diet. These details tell their customers what they are selling. 

Why Do I Want It?

Palo Blanco Farms could state that microgreens are a healthier, safer alternative to nutritional supplements. They could also explain that consuming microgreens brings health benefits from essential vitamins, minerals, and antioxidants. 

How Do I Get It?

The primary call to action is to buy now. We suggested: (1) Buy the product; (2) Receive the Greens; and (3) Live Well, Be Healthy. Since Palo Blanco focuses primarily on subscription deliveries in Laredo, we suggested they design a buy-now experience that minimizes clicks – as Amazon does. 

Want to learn more about how you can convert more of your website visitors into sales? Visit http://brickstoclicks.extension.msstate.edu/ to watch the free Website Mini-Masterclass video series or enroll now in the Master Your Marketing course coming in April 2023. 

Data from Gallup, OECD, and the Bureau of Labor Statistics.

Image from https://www.paloblancofarmandranch.com/.

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Barnes, James and Rebekka Dudensing. “Curiosity to Cash: Successful Web Marketing.” Southern Ag Today 3(5.5). February 3, 2023. Permalink

Recently at the Texas Agricultural Cooperative Council’s Farm Store Summit, cooperative farm store managers held a roundtable discussion on the challenges they face. While issues such as the lack of skilled labor and loss of farmland were discussed, participants described a worrisome cycle regarding the farm store’s value proposition.

The cycle can be described something like this:

1. Cooperatives sometimes struggle with a fear or inability to invest in activities that will broaden their value proposition
2. As a result, they engage in more price-focused competition
3. The cooperative struggles with a fear or inability to maintain or increase price margins
4. The co-op becomes less profitable, which in turn causes an inability to invest in value-adding activities (back to step 1). 

When a cooperative farm store is experiencing cost inflation and is not willing to pass some or all of the increase on to member-owners by maintaining price margins, they experience a financial strain that can result in a reduced power to invest in the co-op. This means less labor that can be hired, or less customer service training for existing employees. Well-trained labor is an investment that can generate greater sales, and not a simple expense to be written off by managers or boards. Finally, boards must adopt the expectation that the cooperative farm store should make a profit. Developing a value proposition focused on service is essential for success. 

The cooperative’s ability to maintain member loyalty is ultimately tied to its value proposition. If the only value that members can see in cooperative ownership is rooted in price, their loyalty will lie with the best price, whether it be at the co-op or a competitor. Developing member value that is based on customer service, convenience, or other customer-centric factors will allow for a healthy, long-term business relationship with patrons.

Author: Conner Neumann

Graduate Assistant- Agricultural Economics – Texas A&M University

Author: John Park

Roy B. Davis Professor of Agricultural Cooperation and Extension Specialist

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Neumann, Conner, and John Park. “Cooperative Farm Stores and the Challenge of Member Loyalty.” Southern Ag Today 3(4.5). January 27, 2023. Permalink

Top photo Credit to Wendy Wei

The H-2A visa program is an option that allows American growers to hire foreign agricultural workers. In the context of persistent farm labor shortages, the number of certified H-2A positions has experienced a rapid growth in the last two decades. Three states in the Southeast (Florida, Georgia, and North Carolina) and two on the West Coast (California and Washington) received more certified H-2A positions in 2022 (Figure 1). Except for Georgia, there was an increase in the amount of H-2A certified positions in the top 10 states using this program. 

The demand for H-2A workers has remained strong despite continued incremental increases in their minimum compensation levels. Employers of H-2A workers need to pay at least the highest of a minimum wage known as the Adverse Effect Wage Rate (AEWR), the prevailing wage, the prevailing piece wage, the wage agreed upon a collective bargain, or the federal or state minimum wage (Osti et al., 2019).

AEWRs vary by state but are generally set to a level above the minimum wage. The AEWRs are calculated as the average hourly earnings of non-supervisory field and livestock workers in each state in the previous year. The values are determined through surveys conducted by the U.S. Department of Agriculture (called the Farm Labor Surveys) during January and April (published in May) and July and October (published in November). The information released each November includes annual data based on quarterly estimates of employment and wages (Gutierrez-Li, 2022). 

In 2023, California has the highest rate, $18.65/hour, while states in the Southeast (Louisiana, Arkansas, Mississippi, Georgia, Alabama, and South Carolina) have the lowest AEWR, $13.67/hour (Figure 2). Overall, all southern states have AEWRs below the national average AEWR of $16.14/hour. However, most of the southeastern states experienced double-digit raises in AEWRs compared to 2022. Florida had the largest wage increase, as the hourly AEWR went up 15.47% (from $12.41 to $14.33/hour) followed by Alabama, Georgia, and South Carolina where wages grew by 14%. In contrast, AEWRs increased by less than three percent in West Virginia, Tennessee, and Kentucky rising from $13.89 to $14.26 an hour. On average, AEWRs climbed 7.5% nationwide.

The inflation rate in 2022 was approximately 6.5%, slightly below the average increase in AEWRs, suggesting that real wages for H-2A workers will be higher in some states (but lower in others). For growers of labor-intensive agricultural commodities employing large numbers of H-2A workers (like sweet potatoes, Christmas trees, fruits, and vegetables where labor represents at least a third of total costs), the increases in AEWRs could translate into significantly higher wage expenses. The final effect on farmers’ profit margins will depend on whether the prices of the products they sell grow enough to compensate for the rise in labor and other input costs.    

Figure 1. Change in the Number of H-2A Positions Certified in Top H-2A Demanding States

Figure 2. 2023 H-2A Adverse Effect Wage Rates 

References

Adverse effect wage rates. (2022). Employment and Training Administration. US Department of Labor. Available online at: https://www.dol.gov/agencies/eta/foreign-labor/wages/adverse-effect-wage-rates

Gutierrez-Li, A. (2021). The H-2A visa program: addressing farm labor scarcity in North Carolina. NC State Economist. North Carolina State University.

Osti, S., Bampasidou, M., & Fannin, J. M. (2019). Labor-Intensive Multiple Cropping Systems and the H-2A Program. Choices, 34(1), 1-6.

Author: Alejandro Gutierrez-Li

Assistant Professor and Extension Economist

North Carolina State University

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Gutierrez-Li, Alejandro. “Adverse Effect Wage Rates of H-2A Workers Increase in 2023.” Southern Ag Today 3(3.5). January 20, 2023. Permalink

Americans don’t seem concerned about holiday spending. An October Gallup poll reported that we intend to spend 6-8% more on holiday gifts in 2022. The average of $932 was just $10 off the 2019 high of $942. Just over half plan to spend about the same amount as last year, while 17% plan to spend more and 26% plan to spend less. 

This is somewhat surprising given that consumer confidence inched up at the end of 2022 but still rivaled 1980 levels. Inflation slowed and unemployment dropped in the third quarter of 2022, but inflation remains well above average. The Federal Reserve has increased its interest rates six times this year with another hike expected before the end of 2022. Companies, including retailers usually adding holiday employees, announced layoffs throughout the fall, and the National Retail Federation expected seasonal hiring to decrease by 10-33% relative to 2021. 

A Deloitte study produced results similar to the Gallup poll, noting that after inflation, that money is expected to buy nine gifts rather than last year’s 16. Holiday spending plans are rosier than expectations for household financial expectations for 2023 in the Deloitte data. Holiday spending tends to trend with November unemployment and consumer sentiment (see chart). Holiday spending is a reflection of 2022 experiences as much as 2023 expectations. But, really, no one wants to give up holiday memories, many of which include gifting.

In other news, don’t forget to turn in your Ag Census form. Might be a fun way to spend time waiting for the kids to go to sleep on Christmas Eve or between bowl games. Filling it out while contemplating year-end business spending may economize on your holiday time.

Author: Rebekka Dudensing

Professor and Extension Specialist, Associate Vice President for Economic Development and Community Impact

rmdudensing@tamu.edu

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Photo by Ron Dauphin on Unsplash

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Duddensing, Rebekka. “Strong 2022 Holiday Spending Reflects Experiences and Expectations.” Southern Ag Today 2(52.5). December 23, 2022. Permalink