Grocery Prices Soar; Trump's Mass Deportations May Exacerbate the Situation

Nov 19, 2024 By Lachlan

Americans are growing increasingly weary of the mounting costs at the grocery store, and many are looking to President-elect Donald Trump for economic relief. However, one of Trump's key campaign promises could potentially intensify the pain at the checkout. Trump has consistently vowed to "reduce prices" in supermarkets and throughout the economy, a promise that resonated strongly with voters struggling with the high cost of living, contributing to his decisive electoral victory.

Yet, the ability of Trump to address the affordability crisis in America may be at odds with another prominent campaign promise: his plan for mass deportations. Trump has pledged to not only accelerate the deportation of undocumented immigrants but to launch the most extensive domestic deportation program in U.S. history, with ambitions to deport millions.

Beyond the ethical, legal, and logistical challenges posed by this promise, mass deportations could deprive critical industries of essential workers, with the food and agriculture sectors being particularly vulnerable due to their reliance on undocumented labor. Industry leaders, farm officials, and economists warn that if Trump follows through on his deportation promises, the cost of groceries could rise significantly.

"Removing these workers would halt production, and there's only one direction prices can go: they will soar dramatically," said Chuck Conner, president and CEO of the National Council of Farmer Cooperatives and a former deputy secretary at the U.S. Department of Agriculture. The logic is straightforward: fewer workers result in less food production and, consequently, higher prices.

According to the USDA, between 2018-2020, only 36% of crop farmworkers were U.S. citizens, and 23% were authorized immigrants, while 41% were without work authorization. "When cows go un-milked, apples unpicked, and fruits and vegetables unharvested, the supply decreases," Conner explained.

The federal government estimates that around 11 million unauthorized immigrants lived in the U.S. as of early 2022. Nearly 300,000 undocumented immigrants work in farming and agriculture as of 2021, with almost 200,000 in crop production and 66,000 in animal production, according to a 2021 analysis by the Center for American Progress.

"It would be catastrophic for the agricultural economy," said Fred Leitz, owner of a family farm in Michigan. "There would be no one to harvest the crops. If you can't plant, pick, and sell, it's just basic economics."

An additional 206,000 undocumented immigrants work in food production, from animal slaughtering and seafood processing to fruit and vegetable preservation, contributing to an estimated 1.7 million undocumented workers across the food supply chain. "Mass deportations will undoubtedly disrupt the agriculture and food processing sectors, leading to severe labor shortages, increased costs, and higher grocery prices," said Mark Zandi, chief economist at Moody’s Analytics. "The only question is how much prices will increase."

Zandi also noted that food prices could be further driven up by another aspect of Trump's agenda: substantial tariffs. The U.S. imports a significant amount of food, including tropical fruits, seafood, nuts, and coffee, which could be subject to Trump's proposed 20% across-the-board tariffs on imports.

The impact on prices will hinge on the level of tariffs and the number of workers deported. It's possible that Trump may moderate his campaign promises to prevent inflation from spiraling. Alternatively, legal challenges or logistical hurdles could impede his mass deportation plans.

Food items that require manual labor, especially those that are hand-picked like apples, strawberries, tomatoes, and lettuce, would be most susceptible to price increases. Similarly, food items involving animal interaction, such as meat and dairy products, would also see a rise in consumer costs.

In Idaho, approximately 90% of on-farm dairy jobs are filled by foreign workers, according to Rick Naerebout, CEO of the Idaho Dairymen’s Association. He acknowledged the difficulty in determining the number of undocumented workers but highlighted the lack of a permanent visa program for farm workers in the U.S.

"We're exceptionally dependent on foreign-born labor, a reality in our industry for decades," said Naerebout. "The impact on supermarket prices would be a significant increase in dairy products like milk, cheese, and yogurt."

Would food demand decrease? The Trump transition team did not respond to inquiries about the potential impact of mass deportations on food prices. Trump has frequently dismissed inflation warnings related to his economic policies, pointing out that inflation remained under control during his first term, with rates never exceeding 3%.

Scott Bessent, a hedge fund executive and a prominent Trump supporter on Wall Street, has also refuted inflation concerns. "The idea that he would create an affordability crisis is absurd," Bessent told Axios. Trump "views himself as the mayor of 330 million Americans and wants them to thrive and have a great four years."

Proponents of mass deportations have argued that expelling millions could alleviate the affordability crisis by reducing demand. However, Zeke Hernandez, an economics professor at the Wharton School of the University of Pennsylvania, rejects this argument due to the U.S. economy's reliance on immigrant workers.

"It's based on a fundamental misunderstanding of supply and demand dynamics and the role immigrants play in this economy," said Hernandez, author of "The Truth About Immigration." Any decrease in food demand due to deportations would be overshadowed by the loss of workers, noted Chloe East, an economics professor at the University of Colorado Denver.

"The overwhelming effect of mass deportations would be an increase in food prices due to a reduced workforce," said East, who is also a non-resident fellow at The Hamilton Project within the Brookings Institution.

Some may wonder why farmers can't hire more U.S. citizens to replace the deported workers. But those in the agriculture industry insist that this is not feasible. "There are no domestic workers who want those jobs," said Leitz, the Michigan farmer. "They're seasonal, outdoors, hot, and cold."

Naerebout, the Idaho dairy farm executive, agreed that these are jobs that domestic workers "aren't pursuing and really don't want to fill." "It's a demanding, physically demanding, and sometimes dirty job," he said. "And with unemployment rates as low as they are, the domestic workforce can choose the jobs they want."

Robert Lynch, an economics professor at Washington College in Maryland, has studied previous periods of mass deportations and found that neither jobs nor wages increased for American-born workers following such actions. In fact, Lynch found that native-born workers often lost jobs after deportations as the economy suffered from the loss of complementary workers who boosted productivity.

Farmers argue that they need more immigrant workers, not fewer. The current immigration system does not provide green cards for farm workers, and while temporary farm visas (H-2A) exist, there is no legal pathway for year-round foreign workers. Naerebout hopes the incoming Trump administration will grant legal status to the industry's existing workforce and expand visa programs to bring in more immigrant workers.

"That's something many people don't understand: We don't have enough workers to fill all the jobs we have," Naerebout said. "We need foreign-born workers."

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