US agriculture continues to face cost pressure linked to trade policy and labor availability. Tariffs introduced under President Donald Trump have increased farm input costs by more than US$33 billion in 2025, according to a December report from North Dakota State University's Agricultural Trade Monitor. This estimate does not include lost export sales following retaliatory tariffs on US crops.
To offset higher production costs, the administration announced a US$12 billion aid package described as a bridge payment. The support is expected to begin in late February 2026 and will be capped at about US$155,000 per business, with a focus on smaller family farms.
Alongside tariffs, growers report that labor availability is placing increasing pressure on production costs and output. As one California citrus and avocado grower noted, "Farmers can't simply slow or stop production. That fruit, it just keeps growing, whether there are enough workers or not." Reduced labor availability has led to higher overtime costs and unharvested crops. A New Jersey blueberry grower reported losing "two-and-a-half million pounds of blueberries last year that fell on the ground just because we couldn't harvest that."
A new study by Michigan State University examined the link between farm labor shortages and food prices. Using data on specialty crop demand, price elasticity, and production share, the research found that a 10% decline in domestic farm employment is associated with a nearly 3% increase in food prices, equivalent to about US$3.4 billion. The study stated: "The US fresh produce industry is approaching a pivotal moment. Without meaningful labor-focused policy reforms, labor-intensive agricultural production will likely continue to face growing labor costs."
Survey data referenced in the study show that the share of farms reporting labor shortages rose from 14% in 2014 to 53% in 2021. Average staffing levels are estimated at around 79% of desired capacity. Contributing factors include an aging workforce, reduced seasonal mobility, and higher overall labor demand.
Immigration policy is also cited as a factor. According to the US Department of Labor, about 70% of farm workers are immigrants, with nearly 40% lacking legal documentation. Growers report that enforcement measures have increased uncertainty, including among documented workers.
Recent changes to the H-2A visa program adjusted the formula used to calculate the Adverse Effect Wage Rate, which growers expect may reduce wage costs. Farmers expressed cautious optimism but raised concerns about long-term stability and legal challenges to the revised rules.
The Department of Labor stated that "American workers come first" and acknowledged in internal documents that reduced labor inflows could affect domestic food production and prices. Growers warn that labor uncertainty may have lasting effects on production planning and supply stability.
Source: Scripps News
