Helping smaller farms make more profitable hiring decisions
- A NIFA-funded, University of Florida-led project will develop a software for small- and medium-sized farms to calculate potential labor costs and weigh hiring decisions in terms of long- and short-term profitability.
- The tool will be downloadable and allow operations to determine their best managerial decisions without sharing individual financial information.
GAINESVILLE, Fla. — Over 90% of Florida farms are considered “small farms,” according to the United States Department of Agriculture’s $250,000 revenue benchmark, and owners often face unique operational decisions. Regardless of farm size, hired labor is among the most consequential choices for farmers each season, with lower-budget operations facing tighter profit margins.
A new University of Florida project, awarded $499,660 in a three-year USDA-National Institute of Food and Agriculture (USDA-NIFA) grant, aims to help navigate this decision-making process for small- and medium-sized fruit and vegetable farms. The project team includes UF/IFAS faculty members Gulcan Onel and Jaclyn Kropp, both with the UF/IFAS food and resource economics department, and Glenn Israel, who’s with the department of agricultural education and communication.
“Think of it like a ‘Turbo Tax’ for labor and hiring decisions,” Onel analogized, referencing the tax-preparation software’s calculator-like adjustments to information the user inputs. The project’s decision-making tool – called “LaBOR,” for Labor and Business Operation Risks – will use benchmark data on Florida’s tomato, pepper, strawberry and blueberry operations.
“Our software will incorporate underlying labor market risks to calculate the profitability of hiring from domestic versus H-2A (migrant) labor pools under various labor availability and policy change scenarios, allowing users to determine what’s best for their operation,” she added.
Onel said the need for this software was exacerbated during the pandemic, when an already diminishing supply of domestic workers coincided with increased complexities in the regulations on the H-2A temporary agricultural worker program. Higher initial costs are also a factor for those considering hiring H-2A workers, she added.
“A grower who downloads LaBOR will be able to privately input their own information to see the short- and long-term operational value each labor scenario presents,” Onel explained, adding that the downloadable, offline component – as opposed to an online app – is intended to eliminate concerns about any sharing of individual operations’ budget data. “Large farms usually have the resources to help decide what kind of labor risks they have and can incur; small- and medium-sized farms don’t have that flexibility as much.”
The project will begin with a research component to identify the needs of those smaller farm operations and owners’ perspectives on labor options – including hiring guest workers versus domestic workers. That process would inform the software development, along with existing Extension network-collected data to most effectively test its functionality.
Once the “under-the-hood” coding is complete, Onel said, a computer scientist would enhance the program’s user-friendly look and feel. The LaBOR assessment tool would then be disseminated, and users’ feedback collected.
The project includes an additional Extension component, as well, to ensure users can make the most informed decision for their individual needs. Unforeseeable circumstances, like policy changes that may affect the H-2A guest workers program, for example, may require additional outreach to keep users apprised of the latest information.
“This customized, grower-directed software is going to be particularly helpful for labor management decisions when a significant policy or demographics shift is faced in the labor market,” Onel said.
The mission of the University of Florida Institute of Food and Agricultural Sciences (UF/IFAS) is to develop knowledge relevant to agricultural, human and natural resources and to make that knowledge available to sustain and enhance the quality of human life. With more than a dozen research facilities, 67 county Extension offices, and award-winning students and faculty in the UF College of Agricultural and Life Sciences, UF/IFAS brings science-based solutions to the state’s agricultural and natural resources industries, and all Florida residents.
ifas.ufl.edu | @UF_IFAS