A new report from CoBank says rural businesses “should be increasing their focus on technology to overcome labor availability challenges.”
CoBank’s quarterly Knowledge Exchange report says “declining labor force participation, lower birth rates and a collapse in net migration are combining to squeeze the U.S. labor supply,” and the effects could be felt as soon as later this year.
Lower fertility rates, declining labor force participation, and lower net immigration are combining to squeeze labor supply. With the labor supply in rural America set to get tighter, technology – most obviously AI and robotics – will likely be at the core of any strategy to address the oncoming labor squeeze, according to the report.
Although the economy appears to be running well as evidenced by low unemployment and easing inflation concerns, consumer sentiment remains historically low. A major reason is the escalating cost of housing. The monthly cost of homeownership rose 60% between 2021 and 2024 and there is little hope of improvement anytime soon.
Crop prices remain in the doldrums with both the U.S. and South America enjoying favorable crop-growing conditions. The U.S. winter wheat harvest has been hampered by heavy rains, but crop yields are set to be the best in years. Export sales of the upcoming grain and soybean harvest remain sluggish amid ongoing trade uncertainty. Crop profitability is also being pinched by stubbornly high input costs and now fertilizer costs have started to creep up again. On the positive side, recent federal biofuel policy will likely give domestic soyoil demand a boost.
Read the full report here.
