Iowa Produce Market Potential Calculator: a multi-purpose tool for farmers, local food groups, and food policy councils
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1 Iowa Produce Market Potential Calculator: a multi-purpose tool for farmers, local food groups, and food policy councils SARE National Conference August 2006 Rich Pirog Leopold Center for Sustainable Agriculture Craig Chase Iowa State University Extension Randy Boeckenstedt Center for Transportation Research and Education - ISU
2 Making the case for investment External cost (comparisons) Telling the ag and food economy (local, regional, national) story Local/regional food sales data Market potential (market discovery) Impact on the regional economy Changing policy (local, state)
3 Iowa Produce Market Potential Calculator A market discovery tool for farmers A transportation/logistics tool for farmers, distributors, retailers An economic impact tool for local food groups and food policy councils
4 Iowa Produce Market Potential Calculator Uses national per capita consumption data USDA Ag Census and other production data Compares supply and demand Makes assumptions that markets are local and regional (these assumptions don t work for California, Texas, Florida for many of their produce items).
5
6 Using the calculator economic impact Economic Impact: Net change in $ in an economy from some change in industrial activity One way we can enhance $ in an economy is producing goods locally that we would normally import. We call that Import Substitution.
7 Scenario Linking health with rural economic development Iowans eat 5 servings*/day of fresh fruits and vegetables 25 percent of this consumption provided by Iowa farmers - i.e. - 3 months/year * Serving = ½ cup of cut-up fruits and veggies or ½ cup cooked veggies Analysis conducted by Dave Swenson, Department of Economics - ISU
8 Linking health with economic development A nutritional goal that has significant production implications Every Iowan eats 1 serving daily for 3 months each of these 5 items: apples, carrots, spinach, squash, and tomatoes Because this is a consumption goal measured at the consumer intake level, farm production has to be adjusted upwards strongly to compensate for losses from farm to consumer shrinkage
9 Assumptions Increased production in fruits and vegetables will reduce corn and soybean production (land is fixed) Half of the new fruit and vegetable sales would be farmer to consumer (direct-market) sales, the other half are wholesaled and retailed conventionally Existing food store retail sales (actually retail margins) will be reduced by an amount proportionate to coincide with the new direct market sales All of the production to meet this goal of 25 percent is for in-state consumption (therefore, primarily import substitutes)
10 Modeling Foundations Iowa Produce Market Potential Calculator data base IMPLAN, as modified for this assessment. IMPLAN is an I-O model that tracks the purchases and sales of goods between industries, businesses, and final consumers Census of Agriculture Census of Retail
11 Modeling Data Inputs Farm Pounds Farm Receipts Farm Acres Retail Pounds Retail Receipts (and margins) Corn and Soybean Offsets
12 Baseline Values Scenario 3 Fruits Vegetables Total Farm Pounds 134,845, ,187, ,032,706 Farm Acres 13,485 18,337 31,821 Farm Receipts 23,867,662 77,286, ,154,654 Retail Pounds 113,917, ,667, ,585,086 Gross Retail Receipts 111,061, ,590, ,652,330 Retail Margin Offset (7,496,652) (43,009,761) (50,506,413) Corn Offset (2,168,966) (3,816,350) (5,985,317) Soybean Offset (1,345,209) (2,366,929) (3,712,139) Direct Marketing Output 43,596, ,566, ,163,889
13 Farm Level Outcomes Direct Indirect Induced Total Total Multiplier Fruit and Vegetable Farming Total Industrial Output 101,154,654 24,361,712 25,994, ,511, Labor Income 26,389,490 8,941,004 8,350,902 43,681, Jobs , Grain and Soybean Offset (9,697,456) Total Industrial Output (9,697,456) (3,049,699) (2,742,986) (15,490,141) 1.60 Labor Income (2,677,568) (981,886) (881,191) (4,540,645) 1.70 Jobs (101) (35) (35) (170) 1.68
14 Retail Outcomes Direct Indirect Induced Total Total Multiplier Direct Marketing Total Industrial Output 161,163,889 41,738,065 69,097, ,999, Labor Income 80,189,247 13,880,300 22,197, ,267, Jobs 3, , Retail Offset (50,506,413) Total Industrial Output (50,506,413) (7,866,455) (18,449,660) (76,822,529) 1.52 Labor Income (23,447,324) (2,756,743) (5,927,073) (32,131,140) 1.37 Jobs (1,256) (88) (233) (1,577) 1.26
15 Combined Outcomes Direct Indirect Induced Total Total Economic Effects Total Industrial Output Labor Income 202,114,674 80,453,845 55,183,623 19,082,675 73,899,866 23,740, ,198, ,277,077 Jobs 2, ,484 Total Economic Impacts Total Industrial Output 184,529,714 50,382,379 67,470, ,382,311 Labor Income 73,453,969 17,422,390 21,675, ,551,371 Jobs 2, ,094
16 Iowa Age Distributions, July 1, years or more.80 to 84 years 2.4% 2.3%.75 to 79 years.70 to 74 years 3.0% 3.2%.65 to 69 years 3.7%.60 to 64 years 4.5%.55 to 59 years 5.7%.50 to 54 years 7.0%.45 to 49 years.40 to 44 years 7.7% 7.7%.35 to 39 years 6.5%.30 to 34 years 6.0%.25 to 29 years 6.5%.20 to 24 years 7.7%.15 to 19 years 7.1%.10 to 14 years 6.7%.5 to 9 years.under 5 years Percent of Total 6.1% 6.1%
17 Considerations Outputs (findings) are only as good as our inputs (data) and the feasibility of our assumptions I-O models may have limitations in local food economies This is a what-if scenario the gaps from current production levels to the scenario are huge! Requires re-configuration of F & V production and distribution in Iowa, and significant state investment in incentives and technical and financial assistance Work underway to estimate level of infrastructure investment needed to achieve this scenario Assumes that grocery stores, existing wholesalers, and farmers in other states would cede these markets to Iowa producers.
18 For more information: Rich Pirog
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