WALL STREET JOURNAL

July 30, 2009

Got Workers? Dairy Farms Run Low on Labor

By Miriam Jordan

Jesus Rodriguez, a Mexican who can't read or write, sometimes mixes up the numbers that identify the cows that he milks. But he can easily tell one brawny black-and-white Holstein from another, and discern when they are sick, in heat or just plain moody.

Farmer Ray Souza credits immigrants like Mr. Rodriguez, an employee for nearly 20 years, for saving the U.S. dairy industry. "I haven't had a non-Hispanic want to do this work in 10 years," says Mr. Souza, a descendent of Portuguese immigrants, a group that helped turn California into the nation's largest dairy state.

Dairy farmers from Vermont and New York to Wisconsin and beyond have become increasingly dependent on immigrants, many of them Latin Americans who are in the U.S. illegally. Unlike other agricultural work where laborers are hired for short, seasonal stints, dairy-farm laborers often stick around for years, forging close ties with their employers.

But that has also left dairy farmers vulnerable, as rising unemployment in the U.S. heightens tensions over the hiring of illegal immigrants. Dairy farmers say that without immigrant workers, a labor shortage might force some to shutter their businesses, depriving rural communities in the U.S. of a key economic engine.

Last month, about 100 dairy farmers changed from boots into suits for the day and flew to Washington to make their case to Congress. "We need a stable supply of labor," says farmer Ed Schoen, who milks 180 cows in upstate New York. "The dairy industry's survival depends on it." Amid a plunge in milk prices, "worrying about workers is another layer of stress we don't need," says Mr. Schoen, who is on the board of Dairy Farmers of America, a cooperative that produces one-third of the nation's milk.

But groups that call for a crackdown on illegal immigration say that the farmers want an amnesty that would unfairly disadvantage American workers.

"You'd bring thousands of people who would work in dairy farming and then compete with Americans for jobs in manufacturing, construction and services," says Roy Beck, executive director of NumbersUSA, a national organization that lobbies for immigration reduction. Given the recession, "this is a time when we know it's possible to find Americans to do this work. If you had the right recruiting, pay and working conditions, you could handle this with Americans."

But, in the long term, he adds, "we are going to need a foreign-guest worker program geared toward agriculture."

During the Bush administration, some dairy farmers lost workers to immigration raids. Today, others worry that the loss of workers will continue under more restrictive hiring rules under discussion in Washington.

That served as a wake-up call to the industry to aggressively lobby for changes to the country's immigration laws. "We are losing workers while Congress sits on its hands," says Jerry Kozak, president of the National Milk Producers Federation.

A study commissioned by the dairy industry found that immigrants account for 40% of the dairy labor force and are responsible for nearly two-thirds of U.S. milk production. Despite the poor economy, one-fifth of surveyed dairy farmers said they expected to face a worker shortage this year.

In May, Sen. Dianne Feinstein (D., Calif.) reintroduced the AgJobs bill, bipartisan legislation that would enable dairy farmers to legalize their current immigrant work force. The bill's fate may hinge on passage of a comprehensive bill to overhaul immigration.

The dairy industry in California's San Joaquin Valley used to be dominated by Portuguese and Dutch immigrants and their descendents. "Now Hispanic immigrants are the ones who do this work," says Mr. Souza, standing in front of the red barn that his grandfather built. "One day, another group will come."

Some dairy farms are turning to artisanal cheese making as part of an effort to become sustainable. WSJ's Beckey Bright reports.

The U.S. produces about 22 billion gallons of milk annually that amounted to $35 billion in sales at the farm level last year. Retail dairy product sales -- including milk, cheese and yogurt -- totaled $100 billion.

Latin Americans have been heading to the U.S. for decades, but the demographic shift in the dairy labor force is relatively new. In dairy states like Vermont and Wisconsin, farmers began hiring Mexicans and Central Americans in the late 1990s, when family-owned farms began to bolster production to compete with large dairy farms. Increasing the size of their herds and adding extra milking shifts required more work hands.

Latin American immigrants often were eager to secure year-round, full-time work, rather than the itinerant jobs that they would be able to land elsewhere in the agricultural sector. Many also hail from rural areas where many families raise cows.

"Working with farm animals is second nature" to Latin Americans, says Mike McCloskey, co-owner and general manager of Fair Oaks Farms, which has a herd of 12,000 cows, a restaurant and a store in Indiana. His immigrant workers are in the barns "when it's minus 10 degrees and when it's 95 degrees and 95% humidity," he says.

The high turnover and low reliability of local workers posed major problems for dairy farms that wished to grow, according to Tom Maloney, who studies agricultural labor at Cornell University.

"In the mid-'90s, I saw dairy managers who were afraid to expand their businesses because they couldn't find dependable help. Then, some dairies began to hire Latino immigrants, and found they were reliable and had a tremendous work ethic," says Mr. Maloney, a senior extension associate in the Department of Applied Economics & Management. "Now they can't imagine operating without them."

Dairy farmers in Europe have begun to use robotic milkers to reduce dependence on manual labor. But due to the high capital investment required, adoption in the U.S. is likely to be slow, Mr. Maloney says.

Phil Martin, an agricultural economist at the University of California, Davis, believes if labor gets much more expensive in the dairy sector, those higher wages could spur investment in technology -- "although it's not clear at what wage," he says. Currently, the average hourly wage for dairy workers in California, for example, is $11.38. Even though minimum wage is lower, he says, "I would suspect a whole lot of 18-year-olds prefer to work at McDonald's for minimum wage than milk cows."

On Mr. Souza's 250-acre farm, people occasionally drop by looking for work. "Once Americans get the job description, they lose interest real quick," he says. So six out of the eight employees are Mexicans. They deliver calves, milk cows and scrape manure.

Under the sweltering sun recently, Mexican Ubaldo Polido followed a nutritionist's chart as he measured out rations of fodder, grain and alfalfa hay for the herd. Another Mexican worker, hammer in hand, fixed wooden pens that hold newborn calves.

Milker Salvador Reynoso, whose shift had ended at 4:30 that morning, smiles when asked about his job. "I like the animals; I like the convenience of just walking to work," he says.