Companies could lower grocery store prices if the US passed immigration reform, says a major food CEO: 'It's a crisis out here in terms of labor availability'

  • Rising food prices are one of the most painful results of inflation for many Americans.

  • It's partly due to a lack of workers and the need to raise wages making food production more expensive.

  • Land O'Lakes CEO Beth Ford told Time that allowing more immigration would help ease costs in the stretched industry.

You may have heard: the US needs more workers.

One food CEO is pointing to an untapped pool of people who could help businesses ease their labor shortage and lower prices for Americans: immigrants.

"You know what could be self-protective for us? To get some immigration reform," Beth Ford, the head of Land O'Lakes, a massive supplier of dairy goods, told Time's John Simons. "If we're two and a half million workers short, 20% of produce in the Central Valley, bread-basket area didn't get harvested because we have no labor."

Economists have often touted increasing the flow of immigration to previous levels would be one way of addressing the shortage. More workers means the cost of labor is cheaper, which could help make groceries less expensive, as Ford points out. She also tackled the frequently-touted misconception that more immigrants in the US means more competition over jobs, which is false.

"They don't take jobs," Ford said. "These jobs are hard. And I can tell you, I was just in Nebraska a couple nights ago speaking to a number of farmers—and our local retailers. It's a crisis out here in terms of labor availability."

The labor shortage hasn't fully recovered from the impact of the pandemic, and in addition to early retirement and deaths from COVID, stymied immigration via restrictive Trump-era policies are responsible. In November 2021, Insider calculated that 2 million out of the market's 3 million missing workers are immigrants who never came over largely due to those policies.

For the workers who do make it into the US, Ford said that the terms of their immigration are often also counterproductive for the companies that need them. Some workers "are needed year-round," she said. "But certain visas are only seasonal visas. That doesn't work. It's very challenging to attract workers."

"We have dramatic issues in terms of lack of labor"

While an avian flu is having a major impact on egg production across the globe, Ford said ongoing supply chain issues via a persisting labor shortage are impacting food prices overall. She echoed the sentiment of many economists by suggesting that increasing the US labor pool via immigration is the way to keep costs down.

David Kelly, chief global strategist at JPMorgan Asset Management, previously told Insider that "if we increased the number of people who were allowed to immigrate into the United States based on the skills they bring to the marketplace, we could fix this huge excess demand for labor problem pretty quickly."

A post last month by Anthony Knapp and Tiangeng Lu of the Census Bureau highlighted that much net international migration has bounced back from the massive slowdown it has seen over the past few years, but in response to the report, economists told Insider that more Trump-era policies needed to be reversed before the rebound could be considered reliable.

"I would say that it makes up for some of the immigration that we lost during COVID, but I would say also it makes me think that this slow trend of decrease in immigration is probably going to continue because it's linked to more long-term and structural types of issues," Giovanni Peri, professor of economics at the University of California, Davis, told Insider last month.

Peri said that things needed to change on a legislative level for the trend to continue. Since entering office in 2021, President Joe Biden has reversed a number of Trump's restrictive immigration policies, although a number of them are still in place. Last month, for instance, the Biden administration announced that it would expand one of Trump's policies, which expels migrants from certain countries attempting to seek asylum at the Mexican border.

"The number of immigrants who can come in legally is constrained" by laws and procedures that haven't really changed," Peri said. "This is not likely to change unless there is some change in legislation," he said. "And so in that respect, probably this slow decline or stagnation of immigrants will continue."

Amid labor shortage problems, Ford said that it's important to keep in mind that the demand for food is only growing.

"I don't think Americans largely understand the fragility and the interconnectedness of the food supply," she said. "The planet's population is set to grow to about 10 billion people by 2050. During that time, we need to produce more food than the last 8,000 years combined…and then in the United States, we have dramatic issues in terms of lack of labor."

Read the original article on Business Insider