FullTime Hired labor on Alabama Dairy Farms Bulletin 475 December 1975 AGRICULTURAL EXPERIMENT STATION / AUBURN UNIVERSITY R. DENNIS ROUSE, Director AUBURN, ALABAMA --. CONTENTS Page PURPOSE_mm__n n 4 FullTime Hired labor on Alabama Dairy Farms ROBERT C. KEEN AND LOWELL E. WILSON2 1 PROCEDURE n n n___n 5 n DEFINITION OF TERMS n nn n 7 n_- 7 8 8 DESCRIPTION OF ALABAMA GRADE A DAIRY OPERATIONS GEOGRAPHIC LOCATION Operator Characteristics n n F ami!y Labor 10 n n n-ll The Dairy Unit Hired La bor n n n I 13 DAIRYING IS A MAJOR AGRICULTURAL enterprise in Alabama, n n DESCRIPTION OF DAIRY n EMPLOYEEL nnn n n n 14 T enure 14 16 17 22 Employee Characteristics Wages and Perquisites MANAGEMENTFACTORS Wage De termin ates --m 24 Management Analysis__n SUMMARY LITERATURE CITED nn 27 n 29 31 n ACKNOWLEDGMENT The authors express appreciation to Dr. John L. Adrian, assistant professor of Agricultural Economics and Rural Sociology at Auburn University, and Dr. Glenn L. Nelson, assistant professor of Agricultural Economics at Purdue University, for their counsel on statistical procedures used in the section on wage determinants. FIRST PRINTING 3M, Auburn DECEMBER 1975 is an Equal Opportunity Employer J I with milk sales ranking eighth as a source of cash farm income in 1974. Total cash receipts for milk, which was practically all Grade A milk sales, sold by Alabama farmers amounted to $69 million that year (7). Number of Grade A dairies in the State has declined over 50 percent in the past decade to a total of 567 in late 1974 (2). The reduction was a continuation of a long-term trend to fewer but larger production units. The average Alabama dairy of about 120 milking cows has reached a size so that family labor supply is usually inadequate and full-time hired labor is employed. Dairy farmers are experiencing new management problems as they become more dependent on hired labor. In 1971 a study of the use of full-time hired labor on Alabama dairy farms was initiated. It was estimated that dairymen were paying $5.5 million, or about 8 percent of dairy income, for fulltime hired employees. In 1971, there were 750 Alabama Grade A dairies on which an estimated 1,300 workers were employed, or over 6 percent of the total full-time hired workers on Alabama farms. The labor study conducted in 1971 is reported herein. In the past 3 years agricultural wages have risen substantially. Between 1971 and January 1975 the average farm wage rate per day (with1 This study Federal funds. was conducted under project Hatch 326, supported by State and 2 I Former Graduate Research Assistant and now Graduate Assistant, Department of Ag- University of Agricultural Economics, Purdue University; and Professor, Department ricultural Economics and Rural Sociology, respectively. L 4 ..ALABAMA AGRICULTURAL EXPERIMENT STATION - HIRED LABOR ON ALABAMA DAIRY FARMS 5 out board or room) n:Ose from $9.30 to $13:80, or 48 percent (8). However, even with a dramatic increase III wages, the relative position of farm wa~es to non-agricultural wages paid in Alabama has not been :r1]i:1aterially altered. Although the agricultural wage information reI2°rted here is dated, wage relationships and management findings; are still relevant. With relatively loW""arm wages as compared to non-farm wages, f and an apparent dectn"easein the supply of quality farm labor, it appears that labor ]has become one of the greatest problems facing Alabama daJ.r:Ymen. Looking at the dairy labor problem from the individual farmer's viewpoint, it has become one of the operator having difficulty acquiring and retaining qualified full-time employees :;:atexisting farm wage rates. In seeking solutioIl1-S labor problems, Alabama dairy farmers to have tried several aJ.lternatives. Some left dairying because of inadequate labor. : :3Q)§ ~o£ ~ ...... t::>:;ojm Q) 27 HIREDLABORON ALABAMADAIRY FARMS '" § ~"g ~~;oj 0 1D:.::: ; <:D8 ..,,;~ :gg: '" moo ~~ """ ...... mooOO oo 00M "",m""'ttt-m eD""; I""" r-: IJ"5 1J"5""; """ """ 00 M ~ '" "'" o£ '" I «: ;> ~.~ 0' ...... ...a Q.) 0 >. ~ ...a >: «: A ~ S Q.) o£ tion. . Even though the region model~ gave larger coefficients of multiple detennination few of the Independent variables were significant except in th~ northern region. Management Analysis Almost as many different labor practices were found as dairies st.u~ied. To a degree, solutions to labor problems diffe: for individual operations; however, some common observations can be made about the use of hired labor. Problems of labor turnover have increased in recent years. Although some employees had worked on the same farm most of their adult life, a large proportion of the workers left dairying after a few months. In between 1970-1971 the dairymen studied experienced a 44 percent labor turnover. The disparity between agricultural wages and industrial wages and benefits had drawn workers to non-farm employment. Dairy workers have become more attuned to mass media influence and the realization of more desirable employment alternatives. Thus, dairymen were frequently left with the less qualified and immobile workers. The approach to the use of hired labor by fanners often has been to employ as little labor as possible and pay minimum wages. This practice may be changing as dairymen were found to be more competitive in the labor market in 1971 than average farm wage rates paid by other Alabama farmers.7 Even though many dairymen stated they could not afford to pay a competitive wage, it is essential that a better pay package be offered than was being received by the average worker in this study. The farm labor-industrial wage gap must be narrowed if dairymen are to hire and retain more qualified workers. In seeking ways to provide better pay for dairy labor, farmers should first examine their operation for opportunities to increase production efficiency. In Alabama, expanded milk production per cow may offer the best opportunity to reduce cost per hundred pounds of milk produced. Increased efficiency and production may result from changes in the feeding pro2;ram, breeding and calving programs, herd health, as well as changes in herd size to better utilize fann resources. Also, dairymen should ex---. 7Average Alabama farm wage rates per hour without board or room was, $1.32 m 1971 (8). The average hourly rate excluding perquisites paid by dauymen was $1.49, V' Q) ~Q.) 0.0 0 ~ ~ oo~mO;-oooo "",m "'0 """" 1qq ~C'! ~~ !::! ::!. ::!. g, ~ '" ...... ...... 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