California Ag Network

Tag: Rural Economy

  • New Legislation Aims to Boost Farmworker Pay and Support Ag Employers

    On February 2nd, Senators Shannon Grove (R-Bakersfield) and Melissa Hurtado (D-Bakersfield) introduced legislation to create a tax credit for agricultural employers to help cover the costs of providing overtime wages to farmworkers. SB 921, co-sponsored by California Association of Winegrape Growers (CAWG) and California Farm Bureau, aims to ensure farmworkers have more opportunities to earn overtime pay while also providing relief to struggling agricultural businesses.

    “I’m proud to introduce SB 921, a straightforward bill that gives California’s farm employers a payroll tax credit to help cover the extra cost of overtime pay for our hardworking farmworkers,” said Senator Shannon Grove. “This means more overtime hours and better take-home pay for the folks who put food on America’s tables. This is a win-win solution for both the business and our farmworkers who want to work more hours during their peak season. A huge thank-you to my friends at the California Farm Bureau and the California Association of Winegrape Growers for partnering with me on this common-sense solution.”

    Senator Melissa Hurtado added, “Behind every meal is a story of love, sacrifice and hard work in the fields. SB 921 honors the sweat and sacrifice behind our food with a modern, fair approach to wages — because in agriculture, farms, workers and families rise or fall together.”

    SB 921 would do the following:

    • Establish a payroll tax credit allowing agricultural employers to offset the cost of overtime wages paid to their ag employees. NOTE: “Overtime wages” means the difference between the employees’ overtime rate of pay and their regular rate of pay.
    • Help increase available overtime hours for farmworkers, boosting their take-home pay and supporting much-needed financial stability in rural California.

    “California lawmakers need to come together in a bipartisan manner, just as leaders have done in Oregon, Massachusetts, and New York, to ensure farmworkers can earn overtime pay while keeping farms viable,” said Natalie Collins, President of the California Association of Winegrape Growers.“Last year, California found $420 million to expand a tax credit for the entertainment industry. California invests in what it values, and agriculture is asking to be valued. CAWG thanks Senators Grove and Hurtado for their leadership on this important issue.”

    “Farmers warned the Legislature a decade ago that changes to the agricultural overtime law would reduce work hours and cost farmworkers wages, and those concerns have proven true,” said California Farm Bureau President Shannon Douglass. “Many farmworker families have seen hours and earnings decline, a reality farmworkers themselves shared with lawmakers in Sacramento last year in support of Senator Grove’s ag overtime tax credit bill, while family farms operating on thin margins have been forced to make hard choices just to avoid operating at a loss. This tax credit is a practical solution that puts money directly back into the hands of farmworkers, helps farms remain viable employers and strengthens the rural communities that grow our food. It’s an investment in California’s food security and the people who make it possible.”

    Recent research supports these concerns. A 2023 study by the University of California, Berkeley (“California’s Overtime Law for Agricultural Workers: What Happened to Worker Hours and Pay?” ARE Update 27(1): 1–4. University of California Giannini Foundation of Agricultural Economics) found that California farmworkers have been earning less since the “Phase-In Overtime for Agricultural Workers Act of 2016” became law. The study concluded, “This early evidence suggests that the law may not be benefiting the workers they aim to protect.”

    SB 921 builds on the success of the $420 million annual increase in California’s Film and Television Tax Credit Program in 2025. Recently, 52 film projects were selected for the latest round of film tax credits. Collectively, those productions will employ an estimated 8,900 cast & crew and 46,400 background performers statewide. Conversely, the effect of a tax credit for agricultural overtime could be much greater for those working in roughly 415,000 (full-time equivalent) jobs.

    SB 921 follows the lead of other states that have, in a bipartisan manner, recognized the unintended consequences of agricultural overtime laws and taken action to ensure farmworkers can still earn overtime pay:

    • Oregon offers a refundable personal or corporate income tax credit for employers based on overtime wages paid to agricultural workers through 2028.
    • New York offers a similar tax credit through 2032, based on the eligible overtime agricultural businesses pay.
    • Senator Adam Gómez (D-Springfield) is pursuing a tax credit in Massachusetts to reimburse growers for the cost of overtime wages in agriculture.

    SB 628 in 2025 proposed a similar tax credit as SB XXX. The California Federation of Labor Unions opposed SB 628 arguing, “At a time when the California legislature is debating how to allocate tax dollars to fund all the state’s priorities in education, housing, health and human services, infrastructure, energy, etc., this proposal is additionally harmful.”

    Together, Senator Shannon Grove, Senator Melissa Hurtado, CAWG, and the California Farm Bureau are advocating for a policy that both increases farmworker earnings and provides relief to an industry facing unprecedented financial challenges. California must ensure that policies designed to help farmworkers do not inadvertently reduce their wages.

    About the California Association of Winegrape Growers: CAWG is a statewide nonprofit trade association advocating for California’s winegrape growers to ensure the sustainability of the winegrape industry. CAWG promotes the industry’s long-term success by advancing the adoption of sound public policies and fostering awareness and understanding of winegrape growers’ contributions to the economy, environment, and California communities. Learn more at cawg.org.

    About the California Farm Bureau: The California Farm Bureau works to protect family farms and ranches as part of a nationwide network representing more than 5 million Farm Bureau members. Learn more at www.cfbf.com or follow @cafarmbureau on Instagram, LinkedIn, X or Facebook.

    About Senator Shannon Grove: Representative of California’s 12th Senate District, which encompasses large portions of Fresno, Kern, and Tulare counties.

  • USDA Announces Dr. Justin Benavidez as Chief Economist

    U.S. Secretary of Agriculture Brooke L. Rollins today congratulated Dr. Seth Meyer for his years of service to our country and announced Dr. Justin Benavidez as the U.S. Department of Agriculture’s (USDA) Chief Economist.

    “Seth Meyer has been a trusted and steady leader at USDA, providing rigorous, objective economic analysis that has helped guide USDA and America’s farmers and ranchers’ insights into complex commodity markets. I am grateful for his years of service and the lasting contributions he has made to American agriculture,” said Secretary Brooke Rollins. “As we thank Seth for his leadership, I am pleased to welcome Justin Benavidez to USDA as our new Chief Economist. Justin brings strong policy experience, deep roots in production agriculture, and a clear understanding of the economic realities facing farmers and ranchers. I look forward to working with him as we continue to put Farmers First and ensure USDA’s work is guided by sound, data-driven analysis.”

    Retirement of Seth Meyer from USDA

    Seth Meyer has served as USDA Chief Economist since 2021, providing rigorous economic analysis and objective market insight to support USDA leadership, policymakers, producers, and stakeholders across the agricultural economy. During his tenure, Dr. Meyer oversaw USDA’s economic forecasting and analysis, including leadership of the World Agricultural Outlook Board and the widely followed World Agricultural Supply and Demand Estimates (WASDE) report.

    Prior to and during his time at USDA, Dr. Meyer brought decades of experience in agricultural economics, global trade analysis, and policy evaluation. His leadership helped guide USDA through periods of market volatility, global supply chain disruption, and evolving policy priorities.

    Appointment of Justin Benavidez to USDA

    Justin Benavidez has been appointed to serve as USDA Chief Economist. Dr. Benavidez previously served as Chief Economist for the Majority Staff of the U.S. House Committee on Agriculture, where he provided economic analysis on farm bill policy, commodity markets, and agricultural legislation. Before his service on Capitol Hill, Dr. Benavidez worked as an agricultural economist with Texas A&M AgriLife Extension, focusing on farm and ranch management, production economics, and policy analysis. He holds bachelor’s, master’s, and doctoral degrees in agricultural economics from Texas A&M University.

    As USDA Chief Economist, Dr. Benavidez will lead the Department’s economic analysis and forecasting efforts, ensuring USDA’s policies and programs continue to be informed by sound, data-driven economic research that supports America’s farmers, ranchers, and rural communities.

    About the Office of the Chief Economist

    The Office of the Chief Economist provides independent economic analysis to inform USDA decision-making, including market outlooks, policy evaluation, and global agricultural assessments that support U.S. agriculture and food systems.

  • EPA Provides Regulatory Relief to Meat & Poultry Companies

    The Meat Institute applauded President Donald Trump’s Environmental Protection Agency (EPA) for stopping costly changes to wastewater regulations that would have closed meat and poultry processing facilities, driving up the cost of food, killing jobs and hurting rural economies.

    “This important decision by Administrator Zeldin ends a regulatory disaster that would have forced meat processing facilities to close, causing food prices to go up and hardship for livestock and poultry producers,” said Meat Institute President and CEO Julie Anna Potts. “We are grateful for the swift action of the Trump Administration to put the consumer first and eliminate burdensome regulations that destroy jobs.”

    EPA Administrator Lee Zeldin signed a final action withdrawing proposed revisions to the EPA’s Meat and Poultry Products Effluent Limitations Guidelines (ELG) for wastewater discharged by meat and poultry processing (MPP) and rendering facilities.  Last amended in 2004, the meat and poultry ELGs currently apply to about 180 of the estimated 5,300 meat and poultry facilities nationwide. EPA estimated between 845 and 1,620 facilities would be subject to and incur costs should the proposed ELGs become final.

    To protect small and medium sized meat and poultry processors most likely affected by these changes, the Meat Institute joined the Meat and Poultry Products Industry Coalition which is made up of the Meat Institute, National Chicken Council, National Pork Producers Council, National Turkey Federation, North American Renderers Association and the U.S. Poultry & Egg Association.

    The Meat and Poultry Products Industry Coalition commissioned an economic impact analysis that found the Agency grossly underestimated the number of facility closures should the proposed guidelines be enacted from the 16 sites in the EPA estimate to 74 sites.

    The projected number of near-term job losses associated with these facility closures would increase from nearly 17,000 that EPA estimates in the proposal to over thirty thousand to nearly 80,000 direct job losses from plant closures.

    The proposed rule would have also harmed the relationship between MPPs and publicly-owned treatment works (POTWs). Indirect discharging MPP facilities often make significant financial investments in maintaining and upgrading the POTW or shouldering major surcharges for the POTW’s continued operation and maintenance, which reduce public treatment costs for residential ratepayers and improve the quality of local and downstream waters.

    “In January, the Meat Institute called on the Trump Administration to roll back onerous regulations that would reduce the upward pressure on the cost of food, said Potts. “Three of those top priorities to protect consumers have been addressed with today’s news demonstrating President Trump’s commitment to ending the damaging and inflationary policies of the Biden Administration.”

    About the Meat Institute
    The Meat Institute represents the full community of people and companies who make the majority of meat American families rely on every day. The Meat Institute’s hands-on regulatory and technical expertise, proactive advocacy, unique convening power, collaboration within and beyond animal agriculture, and sector-leading continuous improvement initiatives drive relationships and resources that ensure meat continues to be a vital, trusted pillar of healthy diets and thriving communities for generations to come. To learn more, visit: MeatInstitute.org.

  • Forces That Will Shape the U.S. Rural Economy

    CoBank Releases 2019 Year Ahead Report – Confluence of Key Factors Suggest Downside Economic Risk

    The U.S. economy is still performing well by most key measures. However, consumers, investors, companies and other market participants have become more wary about the near-term future with seemingly good reason. Global and U.S. economic prospects are weakening and the agricultural economy shows few signs of an imminent comeback, according to a comprehensive 2019 outlook report from CoBank’s Knowledge Exchange Division.

    “Trade uncertainty, rising debt levels and market volatility are threatening to derail the global economy and creating difficult operating environments for U.S. agriculture,” said Dan Kowalski, vice president of CoBank’s Knowledge Exchange Division. “Trade is the outsized risk. Unresolved disputes with Mexico, Canada, Europe and China are the greatest collective threat to the U.S. economy in 2019.”

    The CoBank outlook report examines 10 key factors that will shape agriculture and markets sectors that serve rural communities throughout the U.S.

    Global Economy: Trade-Induced Slowdown to Hit U.S Shores

    The global economy is slowing and the effects will spread to U.S. shores in 2019. World economic output hit an 8-year high in 2018, powered by both advanced economies and emerging markets. But challenges mounted in late 2018 and risks are decisively weighted to the downside for the coming year. Trade is the biggest risk, as the world’s two largest economies test each other’s willingness to accept economic pain. Trade policy between the U.S. and China will remain the leading risk to the global economy. The rising of debt levels is another undercurrent that threatens to derail the global economy. Total global debt levels (all public and private debt) are now more than three times greater than in 2001.

    U.S. Economy: Slowing Growth, Accelerating Risk

    The U.S. economic expansion is set to become the lengthiest in history this summer. But clouds forming on the horizon suggest more modest growth in 2019 and greater concerns for 2020. Therefore, we can expect a delicate balance of consumer strength to offset a slowing housing market and weaker business investment to keep the U.S. economy growing between 1.75 and 2.25 percent in 2019.

    Monetary policy: Thinning Margin for Error
    The world’s largest economies were widely expected to grow in concert in 2018. That growth did not materialize. As a result, the major central banks are now attempting to guide their economies through very different stages of the economic recovery. Japan is committed to stimulating its economy for the foreseeable future. The European Central Bank will not raise interest rates until at least the third quarter of 2019. China’s economy is slumping and its central bank has indicated that it’s ready to loosen monetary conditions as needed. Gross domestic product forecasts have been cut over the past month amidst a darkening outlook for the U.S. and Chinese economies. If this slowing materializes, it will become very difficult for the Federal Reserve to raise rates this year absent a spike in inflation.

    U.S. Government: Split Congress, More Opposition

    With a split Congress, finding consensus over the next two years to move large legislation will be difficult, but there are reasons for managed optimism. One of the final bills out of the 115th Congress reauthorized the Farm Bill. HR 2 passed the Senate and the House by very large bipartisan margins, showing that Congress can still work together when there is strong constituent support and engagement on an issue. The Administration’s efforts on trade have many in agriculture nervous. The agriculture industry will be very focused on the need to get the United States-Mexico-Canada Agreement (USMCA) completed. Further, it is imperative that the U.S. negotiates a resolution to the trade dispute with China and reach successful conclusion to conversations with Japan, the EU and a post-Brexit U.K. There is work needed to re-establish these major trade relationships before any further damage is done to U.S. agriculture.

    U.S. Farm Economy: Higher Costs and Debt to Hamstring Producers

    With agricultural commodity markets depressed by global supply abundance and ongoing trade disputes, farmers and ranchers face the arduous task of cutting production costs. However, continually rising costs in agriculture are expected to squeeze producers, causing further margin erosion and financial stress in 2019. Farmers should not bank on a fourth consecutive year of above-trend crop yields to make up for low commodity prices and rising costs. To steady the agricultural economy, and boost revenues, the sector is dependent on substantive breakthroughs in trade policy. Strong land values remain the positive for farmers and ranchers, although land values could face downward pressure.

    Ag Trade Policy: Seeking Resolution

    Ongoing tariffs and trade negotiations continue to hang over the U.S. ag economy with no clear sign of resolution, clouding agriculture’s trade outlook for 2019. Three significant trade-related issues must be solved this year to restore some normalcy to agricultural markets: Legislative approval of USMCA, removal of the steel and aluminum retaliatory tariffs and substantive improvement of trade relations with China. Progress in negotiations on all fronts is likely to be slow, which spells more pain for months to come. As a result of the trade war, the value of total U.S. agricultural exports in 2019 is expected to fall to $141.5 billion, down $1.9 billion from 2018, according to the Department of Agriculture’s (USDA) latest projections.

    Grain, Farm Supply and Biofuels: The Rise of Competition

    2019 will be a year of new and intense competition for the grain, farm supply and biofuels sectors. These competitive changes will benefit a few while hurting many along the supply chain. The most impactful competitive pressure will come from outside the U.S. Global crop production has been increasing for decades, but abundant U.S. supplies and a protracted trade dispute with China has enhanced foreign opportunities. Brazil’s projected record crop, Argentina’s production rebound and continued agricultural expansion in Eastern Europe will further inundate a bloated market. Trade dynamics will also impact an ethanol industry that is already struggling. Large supplies have caused some producers to cut output amid negative margins. Competition will also increase in the farm supply sector, squeezing margins. Ag retailers will also face price hikes from a more concentrated supplier base.

    Dairy and Animal Protein: Output Grows Again

    In 2018, the U.S. animal protein sector began suffering from the same oversupply and weak margins that have plagued U.S. dairy producers since 2015. Despite the less favorable profitability environment, the protein and dairy sectors will continue to expand production in 2019, prolonging the margin squeeze.

    Of the three major animal protein species, beef appears to be weathering the animal protein oversupply situation best, with favorable fed cattle prices and historically high packer margins resulting from tight processing capacity. Conversely, the pork and poultry sectors reflect the impact of plant expansions which will deliver double-digit increases in processing capacity for both species by 2020.

    Rural Electricity: Data Analytics Become a Necessity

    2018 will go down as a turning point for the role data analytics will play in transforming the rural electric co-op industry. Optimization of the grid offers many benefits in cost savings and member relations. However, if co-ops do not harness the power of data to unlock value, third-party providers will step in to provide this service. Co-ops cannot afford to delay adopting strategies for a more distributed future that includes automated controls, tailored rate structures, enhanced customer engagement and sophisticated data analytics.

    Rural Communications: Electric Co-Ops Gain Appetite for Broadband

    Over the last few years, electric distribution cooperatives have been building fiber networks, causing some angst in the rural LEC community as they fear this will lead to increased competition. For 2019, rural America should expect to see a continuation of these network builds, but the risk of co-ops overbuilding in rural LEC markets is low. Their primary focus is to build networks in underserved markets for the benefit of their own operations, and their customers.

    Silver Lining

    The global and U.S. economic prospects are weakening, and the agricultural economy shows few signs of an imminent comeback. There are silver linings, however, and many of them hinge directly on the prospect of favorable trade developments, particularly with China.

    “There is a 50 percent probability that some form of a deal with be struck with China by the second quarter of 2019,” said Kowalski. “Also, there’s a 50 percent probability that most or all the tariffs will be lifted on U.S exports in the first half of the year. Should that scenario develop, our outlook will improve considerably.”

    The report, “The Year Ahead: Forces That Will Shape the U.S. Rural Economy in 2019” is available at cobank.com.