Grant County, Washington Irrigated Agriculture: Economic Impact Analysis

Transcription

1 211 Grant County, Washington Irrigated Agriculture: Economic Impact Analysis Elizabeth Sieverkropp Sieverkropp Consulting, LLC. 5/1/213

2 Table of Contents Executive Summary... i Introduction... 1 Importance of Exports in Grant County... 2 Output Contribution of Grant County Agriculture... 3 Valued Added Contribution of Grant County Agriculture... 4 Wages Paid by Grant County Agriculture... 4 Employment by Grant County Agriculture... 4 Importance of Irrigated Agriculture to Grant County... 6 Future of Grant County s Irrigated Agriculture... 6 References... 7 Executive Summary This report provides a profile of irrigated agriculture in Grant County, Washington using IMPLAN software to estimate multipliers and capture the total economic impact of irrigated agriculture. Agriculture is the backbone of Grant County s economy. The county is heavily vested in agriculture with irrigated crops as its highest value crops. According to the 27 USDA Ag Census, 63% of Grant County acres are being used for crop production, and about 75% of Grant County farms are irrigated i. The region s main irrigated crops consist of grains, vegetables, potatoes, and fruits. Fruit farming is the county s largest value crop with $479 million in farm gate value. This is closely followed by vegetable farming and hay production. The region also produces cattle, dairy, hogs, and sheep using irrigated acreage. Due to the large agricultural influence, Grant County also has a large food processing industry. Together, Grant County agriculture and agricultural manufacturing were the largest contributors of output, employment, wages, and value added in the region during 211. Acknowledgements The author would like to thank the Ag Water & Power Users of Eastern Washington for generously providing funding for this research. The author would also like to thank Dr. Garth Taylor from the University of Idaho and Dennis Conley from Dennis Conley LLC. for their guidance and support. Grant County agriculture and agricultural manufacturing contribute $4.3 billion in direct and indirect farm gate output, 38% of Grant County s total. Grant County agriculture and agricultural manufacturing employ 17,166 direct and indirect part-time and full-time employees, 4% of Grant County s total workforce. Grant County agriculture and agricultural manufacturing pay $59 million in direct and indirect wages, 34% of Grant County s total. Grant County agriculture and agricultural manufacturing contribute $1.3 billion in direct and indirect value added (i.e. returns to labor, capital, and payment of business taxes), 42% of Grant County s total. i

3 Irrigated Acres Irrigated Acres Introduction Grant County is located in the Columbia Basin region of central Washington State. The county is approximately 2,68 square miles ii, making it the fourth largest county in the state iii and 6, 5, 4, 3, 2, 1, Grant, WA larger than the state of Delaware iv. Grant County s fertile soils, low-cost land, and inexpensive electricity have resulted in a diverse local economy. Grant County is heavily vested in Yakima, Franklin, Benton, Umatilla, Adams, WA WA WA OR WA 1997 Acres 22 Acres 27 Acres Walla Walla, WA Figure 1: Irrigated Acreage in the Columbia Basin by County. Grant County has the largest number of irrigated acres in the Columbia Basin. About 75% of Grant County farms have irrigated acreage. Source: U.S. Agriculture Census, USDA 1,2, 1,, 8, 6, 4, 2, 22 Acres 27 Acres Morrow, OR Figure 2: Irrigated Acreage in the United States. This chart shows the ten largest irrigated counties (by acreage) in the United States. Grant County is the fifth largest county, and has shown a smaller decrease in acreage. Source: U.S. Agriculture Census, USDA. agriculture with irrigated crops representing its highest value crops. Sixtythree percent of acres in Grant County are used for farming, 43% of which are irrigated. This is equivalent to 1,43 farms, or 75% of Grant County farms, having irrigated ground i. As seen in Figures 1 and 2, the large amount of acreage under irrigation makes Grant County the largest county in Washington State and the fifth largest county in the United States based on 27 irrigated acres. While nationally, the number of irrigated acres has decreased from 22 to 27, Grant County has shown a slighter decrease than eight of the top ten irrigated counties v. Grant County has also seen a dramatic change in irrigation systems. The conversion from rill to sprinkler irrigation has resulted in improved yields and a shift to higher value crops. Double cropping has also become commonplace with over 3, acres taking advantage of the long growing season in 27. The region s main irrigated crops consist of hay, grains, vegetables, potatoes, seed crops, and fruits (Figure 3). 1

4 Grant County is an agricultural leader, ranking 11 th out of 3,79 counties in the United States for value of crops produced in 27 i. Grant County ranked 3 rd in the nation for value of hay production, 11 th for value of vegetable and potato production, and 14 th for value of fruit production in 27 i, all of which are irrigated crops. Irrigated agriculture is very diverse in Grant County with over 4 different major crops being grown. This has attracted many agricultural manufacturing companies because Grant County can supply a large quantity of vegetables for processing. The production and processing sectors of Grant County agriculture are tightly intertwined. Due to the large agricultural influence, many food Dry Onions 2% Corn Silage 2% Mint Oil 2% Dry Edible Beans 3% Green Peas 3% Figure 4: Cherry orchard near Quincy, WA. Grass/ Legume Seed 2% Grapes 1% Grass Hay 5% Sweet Corn 6% Apples 8% Potatoes 8% processing companies have made their home in Grant County. Grant County processes an impressive amount of vegetables within the county directly from the producer. After processing, agricultural manufacturers export their products to consumers in Other 8% Wheat, Irrigated 1% Forage Hay 29% Grain Corn 11% Figure 3: Percentage of 27 Grant County Acres Devoted to Irrigated Crops. Other consists of vegetable seeds, sweet cherries, haylage, buckwheat, pears, carrots, canoola, nursery stock, dry peas, snap peas, asparagus, lima beans, and 17 other crops. 33,86 double cropped acres are included in percentage. Source: USDA. Washington State, the United States, and internationally. Importance of Exports in Grant County Exports are an important economic driver of any region. Exports are goods produced within Grant County being bought outside of Grant County by other counties, states, or countries. Exports bring new money from outside Grant County and fuels purchases and job creation from within the county or stimulate additional county imports. Grant County s agriculture sector exports 75% of its output. Agriculture was Grant County s largest exporter 2

5 Value Added ($ Millions) Output ($ Millions) in 211 with exports of $1.2 billion. The main exported crops are fruit and hay. Most of Grant County s vegetables, including potatoes, are processed within county. Agricultural manufacturing is another large exporting 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 sector in Grant County with 9% of its output being exported. Frozen food manufacturing and fruit and vegetable drying export 97% and 95% of their output, respectively. We use multipliers to measure the economic Gross Output Base Output impact of exports, including output generated in other industries from these exports. A large multiplier means large amounts of output are generated from exports. Grant County agriculture has an output multiplier of 2.65 which indicates that for every $1 of agricultural output that is exported, an additional $1.65 is produced in Grant County s economy. The standard agricultural multiplier is 2.51 and Stanislaus County, California, which may be similar to Grant County, has an economic multiplier of 3.. Figure 5: Total Sales. Gross is the value of direct sales and base is indirect and induced sales generated by exports. Grant County sectors show that all agriculture leads base output with $4.3 billion in 211. The household sector leads gross output with about $3.4 billion. Source: IMPLAN. 1,4 1,2 1, Gross Value Added Base Value Added Figure 6: Value Added. Gross is the direct value added and base is indirect and induced value added generated by exports. All agriculture leads the other sectors in value added. Agriculture s base value of $1.272 billion is double the value added of government at $6 million. Source: IMPLAN. Output Contribution of Grant County Agriculture Grant County s 211 farm gate value (output) of all crops and livestock is $1.6 billion dollars. An additional $767 million is generated in exports and indirect output from supporting sectors. Together agriculture and agricultural manufacturing generate $4.3 billion in direct and indirect output. Gross measures direct impact of an industry; Base allocates direct and indirect impacts across all sectors to the exporting industry. 3

6 Employment Wages ($ Millions) Gross and base output for all Grant County sectors is shown in Figure 4. Valued Added Contribution of Grant County Agriculture All agriculture is the leading contributor of the returns to labor, capital, and payment of taxes with $1.27 billion in 211 value added. In 211, agriculture s direct value added was $628 million (21% of Grant County s total value added). Once the impact of exports is considered, agriculture generated $762 million (25%) of direct and indirect value added in Grant County during 211. Agricultural manufacturing s total exports and indirect value added is much larger than Gross Wages Base Wages Figure 7: Wages/Salaries. Gross is the value of direct wages and base includes indirect and induced wages. For 211 Grant County gross wages, government led the other sectors at $48 million paid. All agriculture led base wages with $59 million. Source: IMPLAN. its direct value added due to its large amount of exports (Figure 6). Agricultural manufacturing s base value added is $51 million (16%). 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Wages Paid by Grant County Agriculture Grant County agriculture paid $184 million in 211 direct wages which is less than the direct wages paid by the government sector and the service sector, $48 million and $252 million respectively. However, once the direct wage plus the wages that were paid in other sectors due to agriculture s exports are considered, all agriculture was the largest payer of 211 wages with $256 million (Figure 7). Employment by Grant County Agriculture The gross employment of Grant County agriculture in 211 is 7,67 full-time and part- Gross Employment Base Employment Figure 8: Employment/Jobs. Gross is the value of direct employment and base includes indirect and induced employment. 211 gross and base measures in Grant County show that agriculture is the largest base employer with 17, jobs. Services are the largest gross employer with 11,5 jobs. Figures include full and part-time jobs. Source: IMPLAN. 4

7 time workers (18% of the county total). Agricultural manufacturing employs 2,516 full-time and part time workers (6%). The largest employers in Grant County are services with 11,252 full-time and parttime jobs (26%) and government with 8,457 full-time and part-time jobs (2%). However, the service and government sectors are primarily supporting industry for Grant County s exporting sectors. When base employment is considered, agriculture is the largest employer with 1,139 fulltime and part-time jobs Economic Activity Direct (Gross) Indirect (Base) Grant County's 211 Cash Receipts from Agriculture that can be attributed to agriculture (24%). Agricultural manufacturing is the second largest base employer with 7,27 jobs (17%) (Figure 8). Table 1 summarizes the economic activity generated by agriculture and agriculture manufacturing. Percent of County Total Agriculture $ 1,598,35,69 $ 2,365,885,288 21% Agriculture Manufacturing $ 1,1,94,79 $ 1,966,824,351 17% Total of All Agriculture $ 2,6,246,48 $ 4,332,79,639 38% Grant County's 211 Value Added from Agriculture Agriculture $ 628,11,359 $ 761,567,7 25% Agriculture Manufacturing $ 169,611,434 $ 51,274,8 17% Total of All Agriculture $ 797,712,792 $ 1,271,841,78 42% Grant County's 211 Value of Wages Paid by Agriculture Agriculture $ 184,286,695 $ 256,15,575 17% Agriculture Manufacturing $ 17,447,179 $ 253,36,46 17% Total of All Agriculture $ 291,733,874 $ 59,322,35 34% Grant County's 211 Agriculture Workforce (Full and Part-time Employees) Agriculture 7,67 1,139 24% Agriculture Manufacturing 2,516 7,27 17% Total of All Agriculture 1,186 17,166 41% Note: All agriculture is the total contribution from the agriculture and agricultural manaufacturing sectors. Table 1: Economic Impact of Agriculture in Grant County. Together agriculture and agriculture manufacturing contribute $4.3 billion in cash receipts (output), $1.3 billion in value added, $59 million in wages, and 17,166 full and part-time jobs. Source: IMPLAN. 5

8 Contribution (Millions) Full and Part-time Jobs Contribution (Millions) Full and Part-time Jobs Importance of Irrigated Agriculture to Grant County Irrigated agriculture contributes a substantial portion of output, value added, wages, and employment to Grant County. As more traditional crops like corn, $9 $8 $7 $6 $5 $4 $3 $2 $1 $- pasture, and alfalfa are being converted to orchards, the impact of irrigated crops is expected to grow. The agriculture sectors fruit farming, all other crop farming, vegetable farming, grain farming, and oilseed farming consist of primarily irrigated crops. As shown in Figures 9 and Output Value Added Wages Employment 3, 2,5 2, 1,5 1, Figure 1: Base (Indirect and Induced) Contribution of Agricultural Sectors. Source: IMPLAN. $5 $45 $4 $35 $3 $25 $2 $15 $1 $5 $- Output Value Added Wages Employment 5 3, 2,5 2, 1,5 1, 5 1, irrigated crops are the largest contributors of direct and indirect farm gate sales, value added, wages and employment. Since exports are considered in indirect measures, vegetable farming has small indirect values due to a majority of the output being processed within county. However, being processed within county causes vegetable farming to have the largest individual multiplier. Future of Grant County s Irrigated Agriculture Grant County s irrigated agriculture will continue to evolve and expand. The shift to high value crops like orchards and organics will continue to shape the sector and the county in the future. Irrigated agriculture s economic importance to Grant County cannot be easily replaced. Agriculture is the county s largest contributor of base output (38% of county total), base employment (4%), base wages (34%), and value added (42%). Figure 9: Gross (Direct) Contributions of Agricultural Sectors. Source: IMPLAN.

9 We can increase agriculture s potential contribution through preserving and expanding water rights for agriculture, giving irrigators a competitive advantage on power rates, keeping our farmland zoned for agriculture with large fields distant from residences, encouraging associated industries to locate in Grant County to locally source raw material and supply inputs, and encouraging a transportation system that has farm to market roads, ways to ship to the export market, rail access, and air shipment capabilities. Grant County will continue to be a major player in United States irrigated agriculture. As California loses irrigated acres, Columbia Basin agriculture will grow. Orchards provide a huge opportunity to grow irrigated agriculture s contribution to Grant County. By attracting more fruit processing companies to Grant County, we can increase agriculture s multiplier and the economic impact of agricultural exports. As a county, our goal should be to preserve irrigated agriculture and to encourage its economic growth for future generations. Figure 6: Apple orchard near Quincy, WA. References IMPLAN. MIG Inc i USDA, National Agricultural Statistics Service. 27 Census of Agriculture - County Data Washington, v/publications/27/full_re port/volume_1,_chapter_2_ County_Level/Washington/st 53_2_1_1.pdf ii United States Census Bureau. State & County QuickFacts: Grant County, Washington, Last modified March 11, fd/states/53/5325.html iii National Association of Counties. Find a County, s/pages/findacounty.aspx iv World Atlas. United States, s.com/aatlas/infopage/usabysi z.htm v United States Department of Agriculture. The Pride of Washington State, October cs/211prideofwashingtonst ate12-12.pdf 7