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Ag Labor Expenses Forecast to Increase in 2023

Total cash labor expenses for the U.S. agriculture sector are forecast to be $43.35 billion for 2023, based on new data from USDA’s Economic Research Service.

This would be an increase of $0.78 billion, or 1.8 percent, over the 2022 level of $42.57 billion in inflation-adjusted 2023 dollars. The projected 2023 level would remain below the high set in 2017. Labor expenses are an important component of agricultural production costs. For every $100 spent on production expenses, almost $10 goes toward labor. Total labor expenses include contract and hired labor payments but exclude non-cash employee compensation.

Generally, the animal production sector uses less hired and contract labor than the crop sector. In 2021, the animal production sector accounted for about one-third of total hired and contract labor expenses, with the remaining roughly two-thirds incurred by the crop production sector. This is because some large specialty crops are more labor-intensive than most industries in the animal sector.

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