Assessing post-harvest labor shortages, wages, and welfare

Abstract

For horticultural commodities, labor is necessary for post-harvest activities such as management, marketing, packing, and distribution. We create a model with pre-and post-harvest tasks and transportation network to study how a shortage in the pre-harvest labor market affects the post-harvest labor market and downstream commodity markets. Parameterized to U.S. pome and prunus industries, we find output prices are 16% greater, the prunus industry does less well adjusting, and producers benefit despite output reductions. Producers' benefit comes almost exclusively from higher prices, but decreases when the resulting post-harvest labor shortage increases spoilage along the transportation network.

Farm labor supply and fruit and vegetable production

“…The implied elasticity of aggregate tree fruit production with respect to the labor supply in Brady et al (2016) ranges from 0.21 to 0.54, in line with the upper bounds produced by our analysis. Cassey et al (2018) estimate an elasticity of 0.42 for apples, which is consistent with our findings, but their estimate of 0.93 for peaches lies above our range of estimates.…”

“…On balance, these bounds are larger than those produced by our analysis. Two other studies, Brady et al (2016) and Cassey et al (2018), use an equilibrium displacement model to examine how simultaneous shocks to output demand and labor supply affect the production of tree fruits. The implied elasticity of aggregate tree fruit production with respect to the labor supply in Brady et al (2016) ranges from 0.21 to 0.54, in line with the upper bounds produced by our analysis.…”

The Indian Demand for Imported Fresh Apples: Effects of Tariff Reductions

“…This increase in demand is about 0.7% of U.S. total apple production in 2015, which was 11,027.52 million lb. To interpret the impact of the demand increases for U.S. apples in India on U.S. producers' welfare, we borrow methods and results from Cassey et al (2018). In their study, Cassey et al (2018) estimated a two-stage Muth equilibrium displacement model of the pome (apple) and prunus (peach) markets.…”

“…A two-stage Muth model is a system of reduced-form equations of the competitive equilibrium of a single-good competitive industry and its associated competitive input markets. We used parameters from Cassey et al (2018) for the U.S. apple market-the preharvest labor input supply elasticity (3.37), the postharvest labor input supply elasticity (0.73), the elasticity of substitution between inputs (1.1), the preharvest labor input share (0.695), and the postharvest labor input share (0.305)-to come up with an equilibrium price of $1.24/lb. and quantity demanded of 6,126.5 million lb.…”

Identifying Critical Issues in the Horticulture Industry: A Delphi Analysis during the COVID-19 Pandemic

“…Additional challenges facing the horticulture industry include immigration policies, labor shortages, and disruptions to the supply chain [11,20]. Most horticultural producers rely on seasonal and migrant labor to grow, harvest, process, transport, and distribute horticultural commodities [21]. Restrictions in the mobility of migrant workers across borders have decreased the availability of low-cost migrant labor [20,22].…”