12/21/2013 7:00 AM
By Helen Margaret Griffiths New York Correspondent
ITHACA, N.Y. — Each year, Cornell professor Steve Kyle gazes into his crystal ball and makes a prediction for the economy for the following year. Going through his predictions for 2013, he said: “I did pretty well this past year. I was wrong about Greece and Europe but right about everything else, so I give myself A-.”
Kyle gave his thoughts and predictions for 2014 at the Annual Agribusiness Outlook Conference Dec. 10 at Cornell. The conference is presented by the Charles H. Dyson School of Applied Economics and Management.
Loren Tauer, professor and David J. Nolan director of the school of applied economics and management, welcomed conference attendees and introduced Kyle, who works in the area of macroeconomic policy at the school.
Kyle said he thought it was encouraging to see household debt ratios back down to “normal” levels and that this is resulting in an improvement in retail sales. He pointed out that while employment levels are improving, the economy is still a long way from providing full employment.
Raising the minimum wage, Kyle believes, would be a good thing as it could save billions of dollars in food stamps. After adjusting for inflation, he said an $11 minimum wage would be comparable to the minimum wage of the mid-1960s. A minimum wage increase could cause hamburger prices to rise a bit at fast-food chains, but Kyle wasn’t personally concerned.
“I only eat there when Thruway rest stops leave no other choice,” he said.
When asked by a member of the audience about how raising the minimum wage would affect farmers, Kyle said he looked to a good friend who is a lettuce farmer in Salina Valley, Cal., for answers. Kyle said he recently talked with his farmer friend, who said that while he wasn’t thrilled about paying more, he needs to in order to get his lettuce harvested and sold. Kyle said the friend told him it could result in him harvesting less lettuce.
Kyle predicted interest rates would remain near zero for 2014, and with it being an election year, his guess is that there is unlikely to be anything new out of Congress and that there will be slow growth in spending.
Will there be a new stock bubble?
“Your guess is as good as mine,” Kyle said. As for the European situation, he said it’s still a big unknown and a cause for great concern. He summarized by saying “we’re looking better.” He also issued a prediction that was more optimistic than he had done in past years, which included the gross domestic product increasing from an annual rate of 1 to 2 percent to about 3 percent in 2014, and unemployment declining into the mid 6-percent range. Kyle posts his predictions on his website, http://www.kyle.dyson.cornell.edu/Links%20to%20Latest%20Prognostication%20and%20Commentary.htm.
Thomas Maloney, senior Extension associate at the Dyson school, talked about “Legislative Challenges on the Road to Immigration Reform.”
Maloney, who works extensively on farm labor policy issues, gave a pessimistic introduction, emphasizing that even though the U.S. Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act this past summer, the House of Representatives has refused to act. Maloney said that with 2014 being an election year, he thinks progress on immigration reform will be limited. The result for farmers could mean difficulty finding sufficient legal workers.
But he wasn’t all gloom and doom. Maloney said there may be a “glimmer of hope” due to the activity of Republican Congressman David Valadao, a dairy farmer from California, who is soliciting others to join him in writing to the Republican leadership to request action in the House in 2014. In addition, Maloney wonders if the appointment by John Boehner of Rebecca Tallent, who joined Boehner’s office earlier this month from the Bipartisan Policy Center where she was the director of immigration policy, is another positive sign for progress. Maloney urged farm employers to follow the legislative developments, keep pressure on House Republicans and demonstrate to the politicians that on immigration reform “they speak with one voice.”
The Becker Forum, held during the Empire State Producers Expo on Jan. 20, will focus on immigration and other agricultural workforce issues. The forum will be held at the Doubletree Hotel in Syracuse, N.Y.
Brandon Mallory of Agri-Placement Services Inc., Maureen Torrey Marshall of Torrey Farms in Albion, N.Y., and Sarah Dressel, a Cornell agricultural science graduate from Dressel Farms in New Paltz, N.Y., were panel members on the topic, “Staffing the Farm Business: Implications for Managers With and Without Immigration Reform.”
Marc Smith, senior Extension associate at the Dyson School and assistant director of the New York State Agricultural Experiment Station, was the panel moderator. Smith emphasized due to the nature of farming in the Northeast — in comparison to the Midwest — there was a significantly greater need for additional labor in the region; hence an immigration reform bill is of extreme importance. The panel members were asked to address if their farm experienced a labor shortage and why; how they adjusted; what it cost them financially; if they engaged with a congressional representative; and what they predict for the future.
Sarah Dressel said her family’s apple farm hires mainly year-round help, but this year they had less experienced pickers so they spent more time training. Dressel said the family has talked with their congressman, but she felt that none of them wanted to “get their hands dirty” on the issue. She had nothing good to say about the H-2A program.
“We do everything we can to avoid it,” Dressel said, adding that most of the farm’s employees come from Mexico. Dressel said she’s concerned that they will not be able to find the necessary labor and if they become more mechanized, the consumer will have to accept a lower-quality product at the supermarket.
Maureen Torrey Marshall co-owns Torrey Farm with her brothers. The farm includes about 10,000 acres of mixed vegetables for fresh market and processing and also a large dairy in western New York. This year, Marshall said the farm hired all H-2A workers. She highlighted some of the issues this created for them, including the fact that the program only allows people to work 10 months out of the year. This is a big issue for Torrey farm, as they need workers to assist with storage and shipping.
If farms are not able to find labor, Marshall said she expects some producers will switch from growing high-labor crops, such as onions, to more lower-labor crops, such as field corn. Marshall commented on the dairy portion of the farm saying, “We have to be very creative to keep dairy workers.”
Marshall, who has been involved in farming for more than 30 years, said she feels politicians, particularly in the House of Representatives, don’t grasp the urgency of the labor situation on farms.
“I’m frustrated that we’re not able to get our message across to the elected officials,” she said. She suggested a two-week shutdown of shipping milk or vegetables to get the message across.
Mallory works primarily at providing staff for dairy farms; a difficult task made harder as workers are needed year-round and H-2A workers are not eligible. Mallory’s workers have resident alien cards and are mainly from Mexico and Guatemala. He said he finds that few unemployed American citizens want the hard work on dairy farms.
“I use to have a choice of workers, but it is becoming harder and harder to find people,” he said, adding that there are probably many reasons for this, but one is that the economy in Mexico is getting better. He said he is concerned about the potential impact of a minimum wage increase on dairy farmers, as he’s not seeing an increase in milk prices on the horizon.
Smith left attendees with a comment to consider and a question to think about: The Canadian “guest worker program works well with a lot less angst. Why is immigration reform such a divisive issue in the U.S.?”