Impact of Immigration Policies on U.S. Economy and Food Industry
After projections that President Donald Trump’s mass deportations would negatively impact the American economy, the nation is seeing a jump in wholesale vegetable prices and slowdowns in industries that rely on immigrant workers.
Economic measures that are trickling out are leading some to point to the administration’s immigration crackdown, along with tariffs, as at least partly responsible for the slump in some economic sectors and for rising prices.
The latest comes from the Bureau of Labor Statistics, which reported Thursday a whopping 38.9% increase in wholesale dry and fresh vegetable prices from June to July, the biggest since March 2022.
Phil Kafarakis, president of IMFA The Food Away From Home Association, which represents food producers, suppliers, services and industries outside of grocery stores, said the warning signs should be taken seriously.
Because of deportation efforts, “you are now going to be left with not enough laborers in the fields to pick up and collect product as its coming to harvest,” he said, adding that it is contributing to the current “horribly, incredibly impactful” effect of tariffs.
Combined with drought, excessive flooding, and wildfires, the deportations are coming to bear and will become a bigger problem in the late summer and early fall harvests, he said.
“I don’t think people realize” there will be a surge in vegetable costs in restaurants, at grocery stores, and other places, Kafarakis said.
While the administration has not yet hit the deportation levels Trump promised in his campaign, the number of people arrested by Immigration and Customs Enforcement in June was its highest monthly arrests in at least five years.
This week, the Dallas Federal Reserve issued a report stating Texas’ economy has softened amid uncertainty. Business owners told the Dallas Federal Reserve that uncertainty about tariffs and immigration policy were posing investment and hiring challenges.
“Immigration enforcement actions are also affecting the ability of some firms to recruit and retain workers,” the agency stated in its report.
“The inability to hire qualified workers because they lacked permits or legal status was the most widespread impact noted among firms experiencing workforce disruption,” the reserve bank said.
The report quoted a machine manufacturer who said in response to survey questions, “Foreign-born laborers get the job done. We need them, we use them, and we like them.”
Immigrant workers are a big part of Texas' workforce. In an April report, the Dallas Federal Reserve Bank said the share of Texas firms reporting reliance on workers who moved to Texas from a different country increased from 15% in 2023 to 25% in 2024.