Research Note Researched

Idaho — Dairy industry faces $5.1B loss from immigration enforcement, 90% foreign-born workforce

Overview

Idaho’s dairy industry — a cornerstone of the state economy — is critically dependent on immigrant labor and faces existential risk from the 2025-2026 enforcement surge. With 90% of dairy workers foreign-born and an estimated 50% undocumented, mass deportation would trigger a projected $5.1 billion loss in gross state product and a 45% drop in dairy output. Despite this, no direct worksite raids on Idaho dairies have occurred as of early 2026, though the chilling effect of the 797% arrest surge is already disrupting operations.

Key Details

Workforce Dependency

90% of Idaho dairy workers are foreign-born (per Idaho Dairymen’s Association CEO Rick Naerebout)
~50% estimated undocumented (exact numbers uncertain)
Domestic worker recruitment historically fails: of 6,500 openings in one study, only 7 domestic workers completed a full season

Projected Economic Impact of Mass Deportation

Sector	Impact
Dairy	45% drop in output
Agriculture (broader)	22.5% reduction
Residential construction	13% reduction
Hospitality/dining	10% reduction
Total GSP loss	$5.1 billion (4% of Idaho total)
State revenue loss	$400 million
Jobs eliminated	29,000 undocumented + 27,000 dependent

Industry Response

Idaho Dairymen’s Association advocates for expanded legal pathways, multi-year visas
Farmers face constraints: milk pricing set by market forces, can’t pass labor costs to consumers
“Quiet conversations” between ag leaders and administration officials warning against worksite enforcement
Idaho House committee advanced an E-Verify bill despite dairy industry opposition

E-Verify HB 704 — passed House over dairy opposition (Feb-Mar 2026)

Four separate E-Verify bills surfaced in the 2026 session. HB 704 (the fourth) would require all private employers to use E-Verify starting July 1, and passed the Idaho House over strong pushback from farm and dairy leaders
A narrower bill requiring state/local governments and their contractors to use E-Verify cleared the Idaho Senate (Feb 19, 2026)
Idaho Dairymen’s Association CEO Rick Naerebout (representing ~350 dairy farms) testified members depend on unauthorized labor; the industry he represents accounts for $3.5B annually
National context for red-state pullback: several Republican states (per Stateline/Governing) scaled back broad E-Verify mandates amid business/economic concerns. Final gubernatorial signature status of HB 704 not yet confirmed at session close

Enforcement Status (as of April 2026)

No direct worksite raids on Idaho dairy farms
Targeted enforcement focused on individuals with criminal backgrounds
But community fear and workforce instability already affecting operations
National pattern: ICE raided dairy farms in New York (Sackets Harbor, March 2025) and Vermont (Berkshire, April 2025). Idaho farmers point especially to a New Mexico dairy raid that left an operation with just 20 of its 55 workers as the scenario they fear
National enforcement scale-up (per industry trackers): ICE workforce grew ~120% over a four-month recruitment push, adding 12,000+ officers by January 2026; the rate of Notices of Inspection (I-9 audits) in H1 2025 ran at least 10x the 2024 rate

Why It Matters

Idaho is ground zero for the tension between aggressive immigration enforcement and agricultural economic reality. The state’s dairy industry would suffer among the worst workforce losses in the nation. The absence of worksite raids so far may reflect political calculations — Idaho’s dairy lobby is politically powerful — but the threat creates a chilling effect that itself disrupts the labor pipeline. If enforcement escalates to worksite raids, the economic impact would dwarf the enforcement activity in the state.

Sources

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