February 26, 2024

Ag industry producing more with fewer workers

WASHINGTON — Agriculture remains a top employer in rural parts of the United States, but who worked in the industry has changed during the past three years, according to new data released by the U.S. Department of Agriculture’s Economic Research Service.

In its annual report, Rural America at a Glance, ERS found overall population growth in rural or “non-metro” areas “took a dramatic upswing” between July 2020 and July 2021 when it increased 0.3% to 46.1 million total residents.

It marked the first time since the mid-1990s that non-metro areas grew at a faster rate than metro areas and was largely because of the coronavirus pandemic, according to the report.

Specifically, as COVID-19 infection rates increased, more people moved into less densely populated areas at a faster rate than those who were leaving them.

But despite those positive shifts, rural America is becoming older, with people 65 years and older making up more than 20% of the non-metro population in 2021 — the first time in history.

The size of the working-age population also declined in 2021, with 58% of rural residents aged 18 to 54.

“Declines in the working-age population may make it harder to meet labor demands in some rural industries and local labor markets,” the report’s authors noted.

“At the same time, many rural areas lack sufficient health care capacity, broadband service, community centers and other services to address the challenges associated with an aging population.”

While data for 2021 wasn’t available, the report found that as of 2019, the strongest rural job gains came in the real estate, administrative services, education, professional services, health care and social assistance, and finance and insurance industries.

And in 2019, the four industries in rural America with the highest employment were government, manufacturing, retail, and health care and social assistance.

Those industries dovetail with the next highest employed industry — agriculture — as “families on small- to mid-sized farms often depend on nonagricultural jobs in their local economies as off-farm sources of income,” the report noted.

Here are three other ways the report found the rural ag industry has changed:

Top Rural Industry

Agriculture remains a primary source of employment for rural America, as 7% of all non-metro jobs in 2019 were related to the industry, compared to 1.1% of all metro jobs.

The report said that disparity in employment can largely be attributed to comparative advantages, like the availability of resources and land costs.

Rural Ag Becoming More Diverse

The rural ag industry continues to feature more white workers than workers of color, but the share of minorities employed in the field has improved, the report found.

As of 2019, Hispanic workers performed 14.4% of rural jobs in agriculture, while 2.4% of the rural ag workers were Black. American Indian and Asian workers each made up less than 2% of rural ag jobs.

Jobs Down, Productivity Up

While ag still accounts for a higher share of rural jobs compared to other industries, the total number of jobs in agriculture has gone down, according to the report.

Specifically, the total number of rural ag jobs in 2020 was about 89% of the total number that were available in 2001. That long-term decline in industry jobs, however, has aligned with a long-term rise in agricultural productivity.

Since 2012, the labor productivity, or output per worker, and the total output, or gross domestic product, of the ag industry have both increased by at least 50%. And both measures have nearly doubled since their 2001 levels.

“Due to advances in technology and capital deepening, the rural agricultural industry has thrived,” ERS economist and report co-author James Davis said during a webinar about the report. “This industry produces a lot more with the same or fewer workers.”

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association.