What a Trump Presidency Means for US Agriculture
Labor is a problem today. It's about to get a lot worse.
Donald Trump will be the 47th President of the United States. Love him or hate him, he’s been elected by the people, and it’s worth unpacking the massive implications that his policies could have on US agriculture and the existing labor crisis.
I have significant concerns about three of his core policies, specifically as they relate to agriculture.
#1 - Immigration
What he wants to do: Deport upwards of 20 million people. His allies have also talked about ending the H-2A temporary ag workers program, a move that the Heritage Foundation supports. He's already appointed immigration enforcement veteran Tom Homan to serve as his border czar.
Likely consequences:
About half (43% according to NAWS) of the ~2 million US farmworkers are undocumented. If we lost 1 million farmworkers tomorrow, US specialty crop agriculture would collapse. Farms will go out of business, exports will decrease, and we'll become increasingly reliant upon imports for food security. More importantly, 1 million people who currently feed our country would be uprooted, potentially violently, from their lives. H-2A visas have and continue to be critical to US agriculture. Program enrollment has increased 35% from 2017 to 2022, on track to pass 400,000 individuals. The H-2A program, flawed as it may be, is the only thing keeping much of US specialty crop agriculture going right now. On a realistic note, its pretty unlikely that the administration will be able to pull off this entire mass deportation. Even attempting to do so, however, will add another dimension of cost and disruption to American farm operations. The confusion and fear that will be caused by this effort is likely to have a substantial impact on farm labor productivity.
Presuming that the Trump administration understands the above, this change is going to necessitate substantial investment into automation for agriculture, because farmers are already vocally complaining about the labor crisis. Remember last week when I said that ag equipment investment was slow and steady? That's about to change because farms will have an urgent need to mechanize their operations, and innovators will work to meet that need. When investment flows quickly, opportunistic investors get involved. These types of investors are frequently misaligned with the needs of the people who do the work in agriculture.
#2 - Tariffs
What he wants to do: He’s a self described Tariff Man, and he’s got lots of plans to pass new tariffs. He promises 10% tariffs on most imports, >60% on Chinese imports, and a handful of special tariffs, like a 200% tariff specifically aimed at John Deere machinery manufactured in Mexico. He says that these tariffs will reduce American retail prices for food and goods. That’s both false and wishful thinking. Yes, tariffs can be used to incentivize cooperation from other countries, but that is bidirectionally true. Remember China’s tariffs against US soybeans and pork in 2018? That trade war resulted in direct U.S. agricultural export losses in excess of $27B during the 2018-2019 time period. It also resulted in negative impacts for the manufacturing and freight transportation industries. This isn’t a guaranteed result, and obviously isn’t the goal of the Trump administration, but it seems probable that we should expect some degree of retaliatory tariffs.
Likely consequences:
Farm input prices are going to increase. In the commodity based world in which we live, farmers are price takers at both ends. A probable consequence of increased input prices is decreased farm income, resulting in further farm consolidation and record US ag trade deficits. Absent intervention, US family farms will go out of business at increased rates and the US will lose market share, globally. Furthermore, everyday eaters will feel these consequences on their wallets as retail food prices increase further.
The Trump administration has historically been quite farmer friendly, ensuring that when broader policy strategies impact farm income, they pay them out. Farm bailouts are probable as the Trump administration attempts to manage farmer sentiment while implementing their policy strategy. That creates an interesting source of capital that farmers will be able to use to subsidize impossibly high labor/mechanization costs. This will enable faster adoption of next generation ag equipment.
#3 - Make America Healthy Again (MAHA)
What he (RFK Jr) wants to do: RFK Jr has been named the nominee to lead the Department of Health and Human Services. This might keep him busy enough and far away from agriculture that these concerns are invalidated, but, assuming that he maintains influence and is in fact allowed to “go wild” on food and health, it’s worth paying attention to some of his policy proposals.
But let’s just take them at their word, for now. Let’s say RFK Jr manages to do what he wants to do, which includes removing glyphosate—one of the least harmful herbicides available—from our agricultural and food systems. Let’s also say he’s successful in ensuring that all school lunches are scratch-made, freshly prepared meals.
Likely consequences:
While it is true glyphosate is a chemical that is used in excess, other chemical alternatives can have more severe side effects. The alternative to chemical herbicides is manual weeding. We’re working on laser and steam and mechanical autonomous weeding solutions, as well as weed seed sterilization, but nothing is ready yet to displace herbicides on any meaningful scale. If we abruptly eliminate these tools, US agricultural production will drastically decrease due to weed pressure, and labor costs for hand weeding will further drive labor demands in a market lacking workers. Some of RFK Jr’s proposed changes could actually be good for US agriculture in terms of increasing reliable market demand for US grown produce through school lunch reforms. That increased demand could release a tiny bit of air in the pressure bubble that Trump’s immigration and tariff policies will create for US farmers.
The bottom line for the ag labor crisis
As a consequence of all of the above, the ag labor crisis will worsen, necessitating increased investment in automation.
As an agtech investor, I have self-interest in an increase in investment in ag automation. But, as a human who cares deeply about other people, I am terrified about the rise of apathetic automation. And, as a pragmatist, I don’t think it will work very well for the tech bros and bureaucrats of the world to sit in their cushy offices and finance and build robots that “fix” farms.
The Human Perspective
Agricultural systems should be first and foremost for and by people. The folks who do the work to make the systems work are diverse in every single sense of the word, and everyone in society relies upon the success of the agricultural system. I care deeply about the folks I’ve sweated alongside in Oregon.
I care about Christina, who moved to Oregon from Oaxaca and who adopted Aaron, the single white person working in any of the crews of ~100 folks during blueberry harvest, as one of her own when his parents kicked him out as a teenager for being gay. I care about Juanita, who also came here from Oaxaca. She always stayed late with me to breakdown equipment after hemp harvest. One week we had a potability issue with our water and provided plastic water bottles instead of the usual cooler. She collected every single plastic water bottle that was littered around the fields and truck beds, and stopped me when I tried to help dispose of them, explaining that she relied on the $200-300/year that she could earn through bottle deposits to buy shoes for her young children.
I could keep going with some of these stories. I changed these individuals’ names because I’m certain that none of them are documented. These people don’t deserve to be ripped from their lives - they’re hard-working humans just trying to make a living. Amongst them are the next generation of agtech founders, because no one understands the intricacies of agricultural production quite like someone who hustles in the fields every day.
And, it’s not just about farmworkers. I focus a lot on this group because no one else in agtech does. I also care deeply about farmers, small, large and in-between. I care about Barry, the 3rd generation farmer who manages my family’s farmland in Iowa. I care about the individuals in the AgLaunch farmer network, and the folks who showed up to the VINE’s demo day in Kearney last week. It’s hard to farm in this country and make the numbers work. Trump’s proposals, as they stand right now, are going to make it harder.
The Pragmatist Perspective
American Farm Bureau, International Fresh Produce Association, and National Pork Producers all cite labor as a top concern. Industry is already pushing back against mass deportation. The big fresh produce growers are sounding the alarms with their lobbyists to discourage mass deportation of their workers. At the very least, I hope that the agricultural lobbies are successful in carving out exemptions for necessary workers. I hope that the mass deporation and tariff policies get reevaluated altogether, but, that’s improbable.
No matter what happens here, there is an opportunity right now for those of us who care about farmers and farmworkers to put our money where our mouths are.
We must augment the remaining agricultural workforce with next generation agriculture equipment, and we need to do it in the next few years. We need to spend more money in this space to get there. It will be worth the upfront investment for all shareholders, because the market opportunity is real and stable; farmers will pay for these solutions because they’ll have no other choice. Furthermore, once these tools are on farms, there will be no going back. Farmworker job loss is, has been, and will continue to be a concern that needs to be grappled with in an intentional way. This is why it’s imperative that startup leaders partner and prioritize building strong relationships with all of their stakeholders, which includes farmers, farmworkers, and countless other downstream players. To name a concrete example, this looks like L5 Automation working in partnership with GoodFarms, a major strawberry grower and first ever Equitable Food Initiative certified farm. It is this level of on the ground, high touch partnership that enables founder/CEO Alex Gutierrez and his team to properly design a system that enables farmworkers to move into higher value positions and improve margins for berry growers.
Only by bringing a diversity of folks to the table, inclusive of farmers and farmworkers, can we design solutions that can easily integrate with existing farm operations while simultaneously creating relationships between farmworkers and technologists. It is through these relationships that we will ultimately build bridges and pathways to socioeconomic mobility for farmworkers while making American agriculture, as Trump might say, great again.
This analysis is based on currently available information on 11/15/2024. For the latest updates and detailed sources, please see the references below and do your own research!
Trade Policy Shifts and Their Potential Implications for US Agricultural Exports - U of Illinois FarmDoc Daily
More pain than gain: How the US-China trade war hurt America - Brookings Institute