U.S. Department of Labor warns shortages could raise food prices

The U.S. Department of Labor is warning that the Trump Administration’s mass deportation efforts could drive up food prices due to a shrinking agricultural workforce. Nearly one in five farmworkers now rely on H-2A visas, and experts say losing that labor could strain growers and supply chains across the country.

Hitendra Chaturvedi, Professor of Practice in the Department of Supply Chain Management at ASU, joined “Arizona Horizon” to discuss how labor shortages may affect food costs and the U.S. supply chain.

The core issue, Chaturvedi explained, is a massive labor shortfall in the agricultural sector. He noted, “40% of our ag workers are foreign-born. Of the 40%, about another 40% are unwilling or unable to come to the farm. This translates to about a 7% reduction in production, which, in turn, translates into a 10% food price hike.”

The decline in agricultural workers is also being affected by the immigration crackdown, as Chaturvedi rules this as a “major factor” in the process of the shortages and food prices increasing.

From this data, Chaturvedi can already see an impact can already be seen at grocery stores with a rise in prices of “0.4 to 0.5% every month”.

As the shortages continue and the U.S. Department of Labor doesn’t act upon this matter soon, Chaturvedi predicts this to be a “perfect storm”. He states this would include “prices increasing” with “supply constrained”, with import tariffs.

Chaturvedi’s recommendation to fix this is, “If you look at it, then you make systemic changes from the labor to warehousing, all the way to supply, all the way to tariff for the benefit of the American consumer.”