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Software calculates profitability of hiring domestic versus H-2A labor

Brad Haire brad-haire-farm-progress-veg-plastic-5-a.jpg
Hired labor is among the most consequential choices for farmers each season, with lower-budget operations facing tighter profit margins.
Think of it like a ‘Turbo Tax’ for ag labor and hiring decisions for smaller farms.

Over 90% of Florida ag operations are considered “small farms,” according to the United States Department of Agriculture’s $250,000 revenue benchmark, and owners often face unique operational decisions.

Regardless of farm size, hired labor is among the most consequential choices for farmers each season, with lower-budget operations facing tighter profit margins.

A new University of Florida project, awarded $499,660 in a three-year USDA-National Institute of Food and Agriculture (USDA-NIFA) grant, aims to help navigate this decision-making process for small- and medium-sized fruit and vegetable farms. The project team includes UF/IFAS faculty members Gulcan Onel and Jaclyn Kropp, both with the UF/IFAS food and resource economics department, and Glenn Israel, who’s with the department of agricultural education and communication.

“Think of it like a ‘Turbo Tax’ for labor and hiring decisions,” Onel analogized, referencing the tax-preparation software’s calculator-like adjustments to information the user inputs.

The project’s decision-making tool — called “LaBOR,” for Labor and Business Operation Risks — will use benchmark data on Florida’s tomato, pepper, strawberry and blueberry operations.

“Our software will incorporate underlying labor market risks to calculate the profitability of hiring from domestic versus H-2A (migrant) labor pools under various labor availability and policy change scenarios, allowing users to determine what’s best for their operation,” she added.

Onel said the need for this software was exacerbated during the pandemic, when an already diminishing supply of domestic workers coincided with increased complexities in the regulations on the H-2A temporary agricultural worker program. Higher initial costs are also a factor for those considering hiring H-2A workers, she added.

“A grower who downloads LaBOR will be able to privately input their own information to see the short- and long-term operational value each labor scenario presents,” Onel explained, adding that the downloadable, offline component — as opposed to an online app — is intended to eliminate concerns about any sharing of individual operations’ budget data. “Large farms usually have the resources to help decide what kind of labor risks they have and can incur; small- and medium-sized farms don’t have that flexibility as much.”

The project will begin with a research component to identify the needs of those smaller farm operations and owners’ perspectives on labor options — including hiring guest workers versus domestic workers. That process would inform the software development, along with existing Extension network-collected data to most effectively test its functionality.

Once the “under-the-hood” coding is complete, Onel said, a computer scientist would enhance the program’s user-friendly look and feel. The LaBOR assessment tool would then be disseminated, and users’ feedback collected.

The project includes an additional Extension component, as well, to ensure users can make the most informed decision for their individual needs. Unforeseeable circumstances, like policy changes that may affect the H-2A guest workers program, for example, may require additional outreach to keep users apprised of the latest information.

“This customized, grower-directed software is going to be particularly helpful for labor management decisions when a significant policy or demographics shift is faced in the labor market,” Onel said.

Source: University of Florida, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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