Summary
Representative Alexandria Ocasio-Cortez warned that Trump’s mass deportation policy could lead to labor shortages and higher grocery prices.
Experts say agriculture, construction, and healthcare will be hardest hit, with farm output losses estimated between $30 and $60 billion.
Deportations could cost the U.S. economy up to $88 billion annually.
AOC argued that immigrant labor is vital to economic stability, urging Congress to pursue immigration reform.
The distributors will lower prices. Farmers will get paid pennies for what would be dollars. Farmers don’t sell their product directly. They get screwed before the consumer gets screwed. In this kind of a cycle prices drop in the short term, but as farmers can’t afford to plant as much going forward, there’s a supply crunch next season. The government used to do a lot to manage this cycle and smooth it out, by literally buying product.
No big deal in the long term though right? Well except we don’t have a competitive distributor or grocery market anymore. So when that crunch hits those prices are going up and they’re going to stay up. For reference check the recent greedflation that happened.
Worse there is a real risk of a dust bowl effect. Farmers who are strapped for cash don’t want to spend money setting their fields up to fallow properly. So the summer hits and the crops that are planted get buried in all that dust. Making the supply crunch even worse.
Then in a normal situation we’d still have the global supply chain to fall back on. But there’s a very good chance that food is going to have tariffs on it.
Farming isn’t like making a widget in a factory.
I know I’ve started buying some MREs…
It’ll take a minute to blow up into a full on crisis though. And please tell me you mean dehydrated food. MREs are … Uh… Not great.
I’m not sure what your main point is here. I was responding to you grouping together a labor shortage and a demand shock as - from what it sounded like - a reason to expect high prices. But demand shocks lower prices on the consumer side of food production, as opposed to raising them, because the food at that point exists, and whoever has it needs to sell it, more desperately than they were before.
My main point is this is well beyond the supply/demand chart you get in Econ 101. That more applies to distributors and grocers than it does to farmers. In most places the farmers aren’t in control of the price. The distributors are. This is how you get things like Dairy Farmers disposing of literal tons of milk. It was more expensive to send it than they would have been paid for it. In other words the price dropped so low it wasn’t worth selling it.
Of course that has knock on effects. That farm doesn’t magically get more money next year so their operations are constrained. Grain is worse than Dairy because it can be siloed for literal years. That means the glut will take years to resolve. Years with low or no income for grain farmers.
Are you seeing the problem yet?