Dairy USA Wage Survey 2009
This informal survey is the fourth of its type. Many academics, practitioners, and trade journals participated in helping put out the word. Thanks go to Wanda C. Emerich, Miner Institute in NY, and Jennifer Heguy, UCCE in Stanislaus, for sending out surveys for dairy farmers to fill out. Finally, special thanks go to each and every one of the dairy producers who took the time to fill out the survey.
Of the 126 responses, 44 were from the West; 52 from the Midwest; 9 from the Southeast; and 21 from the Northeast. I used the U.S. Department of Agriculture, National Agricultural Statistics Service to determine where states fall in terms of regions (cf. for instance, Hoard’s West, May 25, 2002, pp. W-68, W-69). Some of these states do not fall where one might think, so do take a close look at where your state falls, or give me a call or send an E-mail to find out.
In the first survey I collected wage data for numerous job classifications in dairies, but seeing little difference in these wages between cow feeders, calf feeders, milkers, and outside workers, I have concentrated on milkers. A number of resources are mentioned in this paper, and they can all be downloaded for free from http://www.cnr.berkeley.edu/ucce50/ag-labor/ or at http://tinyurl.com/6xtt.
It was up to each dairy farmer to pick one milker, and give us the number of years the person has been employed. Readers should not assume that milkers in one region have longer lengths of employment based on this study. In 2003, I observed that the West paid best, but qualified the results since the West also had the longest reported average length of employment by far. In 2006, we note that as the reported average length of employment for other regions rose, and so did the average wage level. In 2009 we continue to see a relationship between length of employment and wages earned. Average milker wages were $9.95 (2009), $9.69 (2006), $9.25 (2003) and $9.26 (2000). Please note that these hourly wages do not include the cost of other benefits received by milkers, such as incentives, bonuses, housing, or health insurance.
In Table 2 we look at wages in relationship to length of employment. Milkers with longer time on the job tend to make more money. For those employed over 18 years, we had one employee receiving very low wages, and so we report the data with and without that employee. These figures can be a starting point when creating an internal wage structure (see Chapter 7, Labor Management in Agriculture: Cultivating Personnel Productivity, 2nd Edition).
I have hypothesized that 1) the number of foreign-born milkers will increase through time, especially as Mexican and Central American workers move into regions where they were not utilized in the past: and 2) that as foreign born milkers increase, the number of USA-born female milkers is likely to decrease.
The average percentage of foreign-born milkers was essentially the same in the 2009 survey (66%) and the 2006 survey (69%). Given issues of sampling, it is best not to draw too many conclusions as to these numbers. I was probably premature in assuming that the jump in the Northeast from 22% (2003) to 43% (2006) was real, and not a sampling error, given the 29% in 2009. Similarly, it is hard to say if the Southeast truly jumped to 83% foreign born milkers, or we just have a substantially different sample answering the survey. Places such as California have for a long time had high percentages of foreign-born milkers. The 2009 sample showed only 77% foreign born in contrast to my 2006 sample (94%).
* Insufficient data
The number of foreign born milkers is of special interest when contrasted to female milkers. I will continue to be interested in seeing if the number of female milkers goes down as the number of foreign-born milkers goes up. In order to better understand the data, in future years I need to find out how many of the females are foreign-born vs. USA-born milkers.
* Insufficient data
Other Data of Interest
Forty-seven percent of the dairy farmers offered some type of incentive or bonus pay in 2009 (in contrast to 36.5% in 2006). Bonuses may include any sort of benefit, such as beef, money, or time off, which is not directly related to an individual’s work efforts. Incentives, on the other hand, are tied directly to worker performance. In these times of such economic stress, a well designed incentive pay program can be of great benefit to dairy farmers and their employees. A well designed incentive—such as pay tied to lowered somatic cell counts or increased calf health—means employees only get an incentive if they have helped to increase the profitability of the dairy (see Dairy Incentive Pay, 4th Edition, and Chapter 8, Labor Management in Agriculture). In this study, for the month of May 2009, about 4/5 of those eligible for an incentive earned one. The average monetary value for those earning an incentive was $142 for the month. Beside the more traditional incentive programs, one dairy producer rewarded hard working youth at his operation with educational scholarships.
Forty percent (2009) of the dairies supplied milkers with housing or a housing allowance. In 2006, half of the dairies reported providing this benefit. The housing allowance averaged $239 per month. Seventeen percent paid a shift differential for more difficult shifts. Eighteen percent (2009) of the dairy producers offered a 401k or some sort of retirement plan for their employees.
Labor Supply Outlook
In 2006, I began asking dairy farmers about the tightness of the labor supply. In Table 5, we see that dairy farmers in 2009 had a much greater availability of labor than three years earlier.
As in previous surveys, some dairy farmers did not know where a replacement worker might come from while others had no problem in recruiting. One dairy producer explained that potential employees showed up without any need for recruitment. Much can be said about building a reputation for being a solid employer. Pay is normally a very important factor in attracting and retaining employees, but interestingly, a dairy with no labor supply needs was paying only a dollar more ($11, Kansas) than a couple of dairies who had trouble finding employees ($10, Washington, Ohio).
With the growing uncertainty regarding labor supply in the future, there are important steps that dairy farmers can take that will help them attract and retain productive employees. Table 6 summarizes the feelings of the dairy producers in terms of internal control over labor supply (i.e., more effective labor management) vs. external changes (i.e., immigration policy, labor market). Without minimizing the effect of external factors, there are specific steps that dairy producers can take to become more attractive to potential future applicants.
Often, the most interesting portion of a survey revolves around the comments. I am particularly grateful that an unusually high number of respondents took the time to share their labor related concerns. I list these in order of most to least frequent. These answers are particularly interesting as they are given in response to an open-ended question (Besides getting enough employees, what is your most serious labor concern?):
One respondent was grateful for a son who was also a sports coach, and was particularly good with employees. Another gave thanks for a Mexican workforce. You may contact the author at email@example.com or call 209.525.6800. Once again, to download any of the study references mentioned in this paper, go to http://tinyurl.com/6xtt.
Permission to reproduce research paper is granted provided author and University affiliation are credited.
Gregorio Billikopf FAX (209) 525-6840 FAX
FAX (209) 525-6840 FAX
16 December 2009