A Ten-Year Review of the Southeast U.S. Green Industry, Part II: Addressing Labor Shortages and Internal and External Factors Affecting Business Strategies

Alicia Rihn, Amy Fulcher, Hayk Khachatryan, Anthony LeBude, Laura A. Warner and Susan Schnexnayder

No 320880, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics

Abstract: Agriculture can be a very labor-intensive industry. While some types of crops and livestock operations have become highly mechanized and have incorporated precision agriculture technologies in planting, fertilizing, and harvesting activities, specialty crops, including nursery crops, still rely heavily on manual labor. For example, planting, pruning, fertilizing, staking, weeding, harvesting and pulling orders are often done manually by workers due to the diversity of products (e.g., size, shape), fragility of the product, and low consumer tolerance for aesthetic damage on plants. Labor accounts for approximately 40 percent of nursery production costs (Mathers et al., 2010; Hall & Ingram, 2014). However, a business model that depends on maintaining the current labor force may not be successful. Current surveys reveal that a shrinking workforce is becoming a greater barrier for producers. For example, Tennessee growers report that labor-related challenges including hiring and retaining domestic employees are increasing. A common refrain from Tennessee nursery owners is that locally sourced employees routinely do not return from lunch on their first day, if they show up at all. Tennessee producers’ experiences are not unique. Nationally, nearly 80 percent of nurseries indicated that labor is their greatest challenge, and more than 50 percent stated the lack of a qualified workforce limited their ability to fill vacant positions (McClellan, 2018). Given the persistent and widespread labor scarcity that U.S. nurseries are facing, growers may need to adopt strategies that improve efficiency and production to best utilize their limited workforce. In Part I of this series of publications, A Ten-Year Review of the Southeast U.S. Green Industry, Part I: Labor and Firm Characteristics, we explored annual sales, product types and workforce demographics. In Part II, we discuss what actions nurseries are taking to address the labor shortage and the role other factors and issues have on business decisions that could affect the future sustainability of the U.S. green industry. Growers and other industry stakeholders can use these results to evaluate strategies to address and alleviate labor issues. These results may also help decision makers within nurseries identify solutions, including technologies that align with their unique production situations. The results could also help elected officials, state and federal agriculture entities, and trade associations identify opportunities to develop new, and expand existing, cost share programs and similar initiatives that support nursery producers.

Keywords: Agribusiness; Labor and Human Capital (search for similar items in EconPapers)
Pages: 9
Date: 2022-05-02
New Economics Papers: this item is included in nep-agr and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:utaeer:320880

DOI: 10.22004/ag.econ.320880

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