Dairy USA Wage Survey 2009

In 2003, the author observed that the West paid best, but qualified the results since the West also had the longest reported average length of employment by far. In 2006, we note that as the reported average length of employment for other regions rose, and so did the average wage level. In 2009 we continue to see a relationship between length of employment and wages earned.

This informal survey is the fourth of its type. Many academics, practitioners, and trade journals participated in helping put out the word. Thanks go to Wanda C. Emerich, Miner Institute in NY, and Jennifer Heguy, UCCE in Stanislaus, for sending out surveys for dairy farmers to fill out. Finally, special thanks go to each and every one of the dairy producers who took the time to fill out the survey.

Of the 126 responses, 44 were from the West; 52 from the Midwest; 9 from the Southeast; and 21 from the Northeast. I used the U.S. Department of Agriculture, National Agricultural Statistics Service to determine where states fall in terms of regions (cf. for instance, Hoard’s West, May 25, 2002, pp. W-68, W-69). Some of these states do not fall where one might think, so do take a close look at where your state falls, or give me a call or send an E-mail to find out.

In the first survey I collected wage data for numerous job classifications in dairies, but seeing little difference in these wages between cow feeders, calf feeders, milkers, and outside workers, I have concentrated on milkers. A number of resources are mentioned in this paper, and they can all be downloaded for free from http://www.cnr.berkeley.edu/ucce50/ag-labor/ or at http://tinyurl.com/6xtt.

Milker Wages

It was up to each dairy farmer to pick one milker, and give us the number of years the person has been employed. Readers should not assume that milkers in one region have longer lengths of employment based on this study. In 2003, I observed that the West paid best, but qualified the results since the West also had the longest reported average length of employment by far. In 2006, we note that as the reported average length of employment for other regions rose, and so did the average wage level. In 2009 we continue to see a relationship between length of employment and wages earned. Average milker wages were $9.95 (2009), $9.69 (2006), $9.25 (2003) and $9.26 (2000). Please note that these hourly wages do not include the cost of other benefits received by milkers, such as incentives, bonuses, housing, or health insurance.

In Table 2 we look at wages in relationship to length of employment. Milkers with longer time on the job tend to make more money. For those employed over 18 years, we had one employee receiving very low wages, and so we report the data with and without that employee. These figures can be a starting point when creating an internal wage structure (see Chapter 7, Labor Management in Agriculture: Cultivating Personnel Productivity, 2nd Edition).

Foreign-Born Milkers

I have hypothesized that 1) the number of foreign-born milkers will increase through time, especially as Mexican and Central American workers move into regions where they were not utilized in the past: and 2) that as foreign born milkers increase, the number of USA-born female milkers is likely to decrease.

The average percentage of foreign-born milkers was essentially the same in the 2009 survey (66%) and the 2006 survey (69%). Given issues of sampling, it is best not to draw too many conclusions as to these numbers. I was probably premature in assuming that the jump in the Northeast from 22% (2003) to 43% (2006) was real, and not a sampling error, given the 29% in 2009. Similarly, it is hard to say if the Southeast truly jumped to 83% foreign born milkers, or we just have a substantially different sample answering the survey. Places such as California have for a long time had high percentages of foreign-born milkers. The 2009 sample showed only 77% foreign born in contrast to my 2006 sample (94%).

* Insufficient data

Female Milkers

The number of foreign born milkers is of special interest when contrasted to female milkers. I will continue to be interested in seeing if the number of female milkers goes down as the number of foreign-born milkers goes up. In order to better understand the data, in future years I need to find out how many of the females are foreign-born vs. USA-born milkers.

* Insufficient data

Other Data of Interest

Forty-seven percent of the dairy farmers offered some type of incentive or bonus pay in 2009 (in contrast to 36.5% in 2006). Bonuses may include any sort of benefit, such as beef, money, or time off, which is not directly related to an individual’s work efforts. Incentives, on the other hand, are tied directly to worker performance. In these times of such economic stress, a well designed incentive pay program can be of great benefit to dairy farmers and their employees. A well designed incentive—such as pay tied to lowered somatic cell counts or increased calf health—means employees only get an incentive if they have helped to increase the profitability of the dairy (see Dairy Incentive Pay, 4th Edition, and Chapter 8, Labor Management in Agriculture). In this study, for the month of May 2009, about 4/5 of those eligible for an incentive earned one. The average monetary value for those earning an incentive was $142 for the month. Beside the more traditional incentive programs, one dairy producer rewarded hard working youth at his operation with educational scholarships.

A fourth of the employees (2009) received some sort of health insurance, down from a third who received health insurance in 2006. The average cost for this insurance for the dairy producer was $341/month in 2009 vs. $377 in 2006. Sixty-three percent of the dairy producers provided paid vacation to their milkers. These milkers earned an average of 9 days of vacation in 2009, compared to 10 days in 2006. A few dairymen also offered additional pay in lieu of vacation.

Forty percent (2009) of the dairies supplied milkers with housing or a housing allowance. In 2006, half of the dairies reported providing this benefit. The housing allowance averaged $239 per month. Seventeen percent paid a shift differential for more difficult shifts. Eighteen percent (2009) of the dairy producers offered a 401k or some sort of retirement plan for their employees.

Labor Supply Outlook

In 2006, I began asking dairy farmers about the tightness of the labor supply. In Table 5, we see that dairy farmers in 2009 had a much greater availability of labor than three years earlier.

As in previous surveys, some dairy farmers did not know where a replacement worker might come from while others had no problem in recruiting. One dairy producer explained that potential employees showed up without any need for recruitment. Much can be said about building a reputation for being a solid employer. Pay is normally a very important factor in attracting and retaining employees, but interestingly, a dairy with no labor supply needs was paying only a dollar more ($11, Kansas) than a couple of dairies who had trouble finding employees ($10, Washington, Ohio).

With the growing uncertainty regarding labor supply in the future, there are important steps that dairy farmers can take that will help them attract and retain productive employees. Table 6 summarizes the feelings of the dairy producers in terms of internal control over labor supply (i.e., more effective labor management) vs. external changes (i.e., immigration policy, labor market). Without minimizing the effect of external factors, there are specific steps that dairy producers can take to become more attractive to potential future applicants.

Dairy Producer Comments

Often, the most interesting portion of a survey revolves around the comments. I am particularly grateful that an unusually high number of respondents took the time to share their labor related concerns. I list these in order of most to least frequent. These answers are particularly interesting as they are given in response to an open-ended question (Besides getting enough employees, what is your most serious labor concern?):

Finding, training, and retaining quality employees who are motivated and honest (35%, n = 38). Issues included high quality work, productivity, reliability, work ethic, attitude, integrity and ability to follow instructions. Many of these issues of effective selection and retention are discussed throughout Labor Management in Agriculture.

Immigration reform (22%, n = 24). Uncertainty over immigration reform continues to be a high concern. This is so, despite the temporary reprieve (thanks to the recession) in what was a tight labor market. Unresolved issues surrounding immigration reform mean a continual fear of raids, questions about future labor supply, workers without driver’s licenses, and a general lack of employee stability.

Wages and benefits (21%, n = 23). This issue is also an integral part of finding and retaining employees at the dairy. Related concerns included internal wage structures where long-time employees were compensated disproportionately high, when their productivity was contrasted to newer, lower paid employees. (For a more complete discussion, see chapter 7 of Labor Management in Agriculture). A frequently mentioned worry was keeping up with cost-of-living pay raises—or even retaining employees—given the reduced price of milk. The high cost of health insurance was also brought up.

Communication, teamwork and conflict management (5%, n = 5). The need to improve communication, teamwork, and resolve conflicts between employees were all mentioned. (For more information, see Party-Directed Mediation: Helping Others Resolve Differences, 2nd Edition.) One dairy was particularly frustrated that Hispanic employees from different nations had more trouble getting along between themselves than with the owner (see Appendix I, of Party-Directed Mediation).

Language barriers (4%, n = 4). The difficulty of communicating with employees who do not speak English was mentioned as a challenge. (MP3 files that can be burnt into CDs are available for workers to learn English. For interested farm employers, there also are some files available for learning Spanish.)

Farm safety and workers’ compensation (4%, n = 4). Farm safety was mentioned, as was dealing with dishonesty among workers claiming workers’ compensation for injuries.

Labor laws and regulations (3%, n = 3). The difficulty of keeping up with labor laws and regulations was mentioned next.

Fear of unionization (2%, n = 2). In this sample there were no unionized dairies, but fear of unionization was mentioned.

Scheduling workers and time off (2%, n = 2). Difficulties in scheduling, and even in dealing with baby-sitter issues were raised.

Taxes (2%, n = 2). I assume that payroll taxes are meant here.

One respondent was grateful for a son who was also a sports coach, and was particularly good with employees. Another gave thanks for a Mexican workforce. Once again, to download any of the study references mentioned in this paper, go to http://tinyurl.com/6xtt.

Author

Gregorio Billikopf

Gregorio Billikopf
10 articles

Gregorio Billikopf is a Labor Management Farm Advisor with the University of California and Visiting Professor of the Faculty of Agricultural Sciences of the University of Chile.

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University of California

University of California