Critical Farm Labor Visa Use Ticks Up

Positions certified for the use of seasonal agricultural visas – known as H-2A visas – grew in fiscal year 2024 (October 2023-September 2024) by less than 2% for the second year in a row, according to recently released Department of Labor data. There were, however, notable decreases in certified positions in top H-2A employer states. Rising costs and new regulations have slowed the explosive growth we have seen over the last decade. Continuous growth in the program at large reflects a shift in the domestic workforce away from agriculture, despite a continued need for reliable farm labor.

Domestic Workforce

The American labor force available for agricultural employment has grown limited. We continue to see lower workforce participation than before the pandemic and a low unemployment rate. While the U.S. labor force has grown more than 12 million people in the last 10 years, declining fertility rates and large retirement pressures have slowed the labor force growth rate from 1.3% per year to only half a percent in the past 20 years. The official U.S. unemployment rate was 4.1% in October 2024, less than a percentage point higher than the pre-pandemic rate of 3.5%, and lower than the 5% unemployment rate a decade ago.

The labor force participation rate – the share of all U.S. citizens between 15 and 64 who are employed or actively seeking employment – has been falling since the early 2000s, largely due to increasing number and share of college students who do not participate in the workforce and the aging of the U.S. population. The workforce participation rate of students enrolled in two- or four-year colleges fell 13% and 9%, respectively, in the past 20 years. Meanwhile, retirement of the “baby boomer” generation continues to outpace the entrance of new generations into the labor force, pulling down overall labor force participation. These trends squeeze both ends of the available labor force, putting domestic employment pressures on employees of prime work age (ages 25-54). These factors mean that increasing immigration has become the leading factor of workforce growth in the U.S.

Both population aging and its effect on the workforce is more dramatic in rural farm and ranch communities. Only 14% of the U.S. population lives in rural areas, but over 20% of the population in rural counties are over the age of 65, compared to 16% in urban areas. The share of people in rural areas who are 55 to 64 is also above the national average, and the rural share of children under 15 is slightly higher than the national average; so, only 28% of the rural population is of prime working age compared to 38.5% of the general U.S. population. Employers in rural communities therefore struggle to maintain their labor force, slowing economic growth and restricting their ability to maintain business operations.

Americans also continue to move away from hands-on work, including farmwork, so the H-2A program has become crucial to supplementing the tight U.S. farm labor market amid a declining rural workforce. The consistent growth in applications and certifications for H-2A workers highlights the shortage of domestic farmworkers and the growing importance of immigrant labor on the farm.

2024 Positions

Nationwide, 384,900 H-2A positions were certified in fiscal year 2024, over 6,000 more than last year. The last 2 years have seen a drop off from explosive growth in the H-2A program in recent years:9 of the last 13 years saw double-digit growth rates and positions certified have quadrupled from the under 90,000 positions certified in 2012.

Nearly 50% of all H-2A positions certified in FY 2024 were for work in just five states, and only 33% of all H-2A positions were for work in states outside of the top 10 states. Sixteen states reduced their use of the H-2A program, including three of the top 10 H-2A states (Florida, California and Michigan).

Florida remains the largest employer of H-2A workers, accounting for 47,396 positions certified this fiscal year, 12.3% of all positions certified. It remains in the top spot despite a decrease of nearly 9% from fiscal year 2023. There has been some shuffling in the rest of the top 10 H-2A employer states. After an 8% decrease in positions certified, California this year moved them to the third-largest H-2A user at 9.7% of total positions, Georgia increased their positions certified to 43,436, making them the second-largest H-2A state (11.3% of positions). Washington and North Carolina round out the top five with 35,884 and 27,532 positions certified, respectively, with both seeing increases from fiscal year 2023.

Based on the USDA National Agricultural Statistics Service (NASS) Farm Labor Survey that determines the Adverse Effect Wage Rate (AEWR), three of the multistate regions had decreases – Appalachian II, Mountain II and Northeast II – but none of these regions contain a top 10 H-2A state. On the flip side, the Southeast (Alabama, Georgia and South Carolina) had the largest increase in positions certified of any region – 5,487 more positions certified in fiscal year 2024 versus 2023 – and also had the largest multistate region wage increase from 2023 to 2024, and will again going into 2025.

Difficulties with Utilizing the H-2A Program

As we have outlined in previous Market Intels, there are numerous barriers to farmers in using the H-2A program, including fees, required expenses, and regulatory complication. The visa program imposes thousands of dollars in application fees owed to multiple U.S. agencies, including the Departments of Labor (DOL), State and Homeland Security. In 2024, the U.S. Customs and Immigration Service increased H-2A petition fees 65% to 267%. Minimum H-2A wages have increased 60% over the past decade. Beyond wages, employers are also responsible for thousands of dollars in housing and transportation costs per employee, and many farms pay agents to manage application, recruitment and compliance procedures.

Declines in positions certified may also be the result of additional regulations that increase the cost of utilizing the program. The H-2A program had over 3,000 pages of new federal regulations in under 2 years, not including state provisions. In states with extra local regulations, the new federal regulations add to the challenges of using the program. These additional rules and processing delays create substantial uncertainty for users of the program, including the employer and the employee. In April 2024, DOL finalized the “Farmworker Protection Rule” which changed the AEWR implementation period, transportation safety requirements, termination procedures, allowed organization of farmworkers and more. A series of preliminary injunctions has created a puzzle of implementation of the rule around the country – 17 states are not under any requirements of the rule while certain components are enjoined nationwide. Rather than halting implementation of the rule, DOL has chosen to continue with disjointed enforcement of the rule. This has led to administrative hurdles for farms with worksites in multiple states that may be under different rules and causes them to juggle constantly changing requirements for utilizing the H-2A program. This rule will likely cause delays for fiscal year 2025 applications, as any applications submitted in the 33 states that have partial injunctions of the Farmworker Protection Rule that were being processed at the time of the November injunction will have to resubmit their applications in a new system.

In addition, the use of farm labor contractors (FLCs) has risen in recent years because of the difficulty of navigating these program hurdles for individual farmers. These contractors are responsible for applying for, housing, and transporting H-2A workers to farms who contract through them for labor. More than 42% of H-2A positions certified in fiscal year 2024 were employed by FLCs. Use of these systems continues to drive up labor costs for farmers since they must pay a premium beyond the high costs of this complex program.,

Conclusion

Despite rising costs and regulations, the H-2A program remains critical to American farming. Rising costs of labor, including the high and rising cost of temporary agricultural work visa programs, put American farmers at a disadvantage in the global market. The agricultural trade deficit is forecast to be $31.8 billion in fiscal year 2024, predominantly due to the import of fruits and vegetables; these products account for 49% of all agricultural imports by value, though many could be produced in the U.S. with a more available workforce. Many specialty crop sectors are reliant on H-2A workers to sufficiently employ their farms and maintain production since mechanization is limited in fruit and vegetable industries.

Only 80% of the H-2A positions certified will result in visa issuance, so the program does not eliminate labor shortages in agriculture. The burdens of the program exacerbate recent declining farm profitability. This has slowed the rate of growth of the H-2A program. Nevertheless, the aging rural population and a tight and evolving U.S. labor market means that these temporary agricultural worker visas will remain crucial to agriculture.