Economic Impact of Agriculture in Lethbridge County. Lethbridge County

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1 Prepared For Lethbridge County Prepared By Serecon Services Inc. Edmonton, Alberta September 2014

2 September 14, 2014 Rick Robinson Chief Administrative Officer Lethbridge County # th Avenue South Lethbridge, AB T1J 4E4 Dear Mr. Robinson: RE: EVALUATION OF THE ECONOMIC IMPACT OF AGRICULTURE IN LETHBRIDGE COUNTY OUR FILE #1001A14.1 Please find attached the final report outlining our findings on the impact of agriculture in Lethbridge County. It has been a pleasure conducting this interesting study on behalf of the County. Yours truly, Serecon SERVICES INC. Markus Weber Enclosure

3 Table of Contents EXECUTIVE SUMMARY / BRIEFING... 1 PROJECT & COUNTY OVERVIEW... 2 BACKGROUND... 2 LETHBRIDGE COUNTY AGRICULTURE OVERVIEW... 2 Cattle Numbers... 4 Livestock Value... 5 Expenditures... 5 METHODOLOGY...10 CATEGORIES OF IMPACT TIME ADJUSTMENT LIVESTOCK INVENTORY FEED ECONOMIC IMPACT...15 LIVESTOCK SECTORS CROP SECTORS SECTOR COMPARISON APPENDIX A: REFERENCE SOURCES...25 APPENDIX B: LIVESTOCK INVENTORIES...26

4 Executive Summary / Briefing Lethbridge County is the only county in Alberta that generates over $1 billion in gross farm receipts and is in a unique situation given its extensive agriculture production, including both the improvement of crop production due to central irrigation, as well as the largest concentration of intensive livestock operations in the province. This report presents the methodology and results of an analysis to estimate the contribution that various agriculture industry sectors make to the Alberta economy. The overall impacts include the direct, indirect and induced expenditures by business and people that occur in subsequent rounds of spending. The primary data source for livestock inventories and crop acreages was the 2011 Census of Agriculture. The largest agricultural sectors were examined in this study, including the major field crops and a number of livestock sectors. Overall, it is estimated that in 2011 the agriculture sector in Lethbridge County made a contribution of $1.1 billion to the economy, for an impact of $419 million on Gross Domestic Product. It is clear from the analyses in this report that several agricultural subsectors are considerably larger than all of the others. Bovine sectors and the major field crops represent the largest impact on the Alberta economy. Livestock made the larger contribution at 67% of the total, or $758 million while crops contributed $371.4 million to the economy. Between beef feeding, dairy and the cow-calf sector, we estimate that the bovine sectors make a total contribution of approximately $735 million annually, with beef feeding being by far the largest at $621.5 million or 55% of the total agricultural contribution. Likewise, only three field crops make up over 80% of the total estimated Lethbridge County cropsector impact of $371.4 million. Wheat, barley and canola together have an estimated impact on the economy of approximately $298 million. File #1001A14.1 P a g e 1

5 Project & County Overview Background Lethbridge County is in a unique situation given its extensive agriculture production, comprising of both the acceleration of production due to central irrigation as well as intensive livestock operation. The area boasts the largest concentration of intensive livestock operation s in the province and also contains over 297,287 irrigated acres. Intensive livestock operations are a value-creating industry that is continually growing. With this high level of activity comes a large tonnage of grain being moved through the county plus a large amount of manure. This large demand for cattle finishing grains has supported a sub-sector industry of central irrigation which supplies these grains. With there are some 3,600 employed labourers, with over 1,500 of them being employed in the primary industries, more specifically agriculture. It is evident the effect that farming has on the local economy. Both the ILO s and irrigated farmland contribute to this employment and therefore contribute to the value of the County. The indirect value of these positions created through agriculture is far stretching, as their salaries contribute to the GDP through spending, taxes, investing and a variety of other avenues. This report presents the methodology and results of an analysis to estimate the contribution that various agriculture industry sectors in Lethbridge County make to the Alberta economy. The overall impacts include the indirect and induced expenditures by business and people that occur in subsequent rounds of spending. This section of the report provides an overview of agriculture in the County and outlines the methodologies and datasets used, including a discussion on the multipliers employed. The next section will then examine in detail the outcomes of our analyses and estimates of economic impact. Lethbridge County Agriculture Overview Lethbridge County is perceived as a hotbed especially for feedlot operations, but more generally for intensive livestock operations. This is borne out by the statistics compiled by Statistics Canada. Lethbridge County is located in the South Saskatchewan region, which is composed of nineteen separate municipalities all of which have a broad set of similarities in regards to land-use. Figure 1 on the next page shows the land-use regions and the Counties in the South Saskatchewan LUR. File #1001A14.1 P a g e 2

6 Figure 1: Alberta Land Use Regions & South Saskatchewan Counties File #1001A14.1 P a g e 3

7 However, even in this grouping where similarities are supposed to exist, there are many exceptions across a number of categories in which data is composed. The South Saskatchewan Region and notably Lethbridge County stand out across a number of data sets having stronger than normal agricultural economic activity in a number of core activities. This indicates that Lethbridge County is the largest municipality in terms of economic activity, in the region of Alberta that is the most active. Cattle Numbers With regard to cattle, the South Saskatchewan Region overall many more animals than any other region in the province. Of the total 5.1 million cattle and calves reported in the province over 2.1 million of them were reported in the South Saskatchewan region. Of those the largest proportion was in Lethbridge County. The closest other municipality in the South Saskatchewan Region has only little more than half as many cattle as Lethbridge County does. The following figures indicate cattle numbers by Land-use Region, followed by a breakdown of that region by municipality. Figure 2: Cattle and Calves, by Land-use Region 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Figure 3: Cattle and Calves in South Saskatchewan Region, by County 500, , , , ,000 0 Lethbridge County M.D. of Taber Vulcan County Wheatland County File #1001A14.1 P a g e 4

8 Livestock Value Alberta has a Livestock and Poultry market value of over 4.2 billion dollars. Of that over 40% resides in the South Saskatchewan Region, being the largest single region in the province. Within that region the largest single Municipality is Lethbridge County, having a financial valuation amount of 100 million dollars more than the second largest municipality in the Region. The following table reflects the Livestock and Poultry market value of the largest municipalities in the South Saskatchewan Region. Figure 4: Livestock and Poultry Market Value South Saskatchewan Region, by County During 2010 Lethbridge County outperformed all municipalities in the South Saskatchewan region in terms of total kilograms of poultry production. Lethbridge produced over 18 million kilos whereas the next highest producer in the region produced just less than 4 million kilograms. Lethbridge County had a poultry inventory of nearly 1.4 million birds on 89 farms compared to their closest regional counterpart Warner County, which had just over 0.5 million birds on 46 farms. Expenditures Livestock and Poultry purchases are another indicator of growth that shows Lethbridge County to be very strong. Of the 2 billion dollars spent provincially on Livestock and Poultry, 1.2 billion of those purchases occurred in the South Saskatchewan region. Within the region over 1/3 or 400 million of that came from Lethbridge County, representing the largest single municipality in the region. Another strong indicator of farm operating expenses is feed. Lethbridge County spent a total of 256 million dollars on feed for livestock. The closest other municipality in the region only spent 93 million on feed in comparison. The following two tables reflect the expenditures across Alberta, and the largest municipalities in terms of purchases dollars in the South Saskatchewan Region, respectively. File #1001A14.1 P a g e 5

9 Figure 5: Livestock and Feed Purchases, by Land Use Region Figure 6: Livestock and Feed Purchases, South Saskatchewan Region by County Total farm expenses are also the largest in the South Saskatchewan Region and Lethbridge County in particular. Figure 7 shows the overall farm expenses across the province of Alberta, while Figure 8 breaks down the File #1001A14.1 P a g e 6

10 South Saskatchewan region showing the municipalities with the largest overall Farm Operating Business Expenses. 4,500,000,000 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000, ,000,000 0 Figure 7: Total Farm Expenses, by Land Use Region Figure 8: Total Farm Expenses, South Saskatchewan Region by County The Census of Agriculture provides an estimate of Gross Farm Receipts. While this number cannot simply be used with input-output multipliers, it does provide a general estimate of overall economic impact, allowing one to readily compare between all of the relevant Alberta counties due to this statistic having been compiled for all Census subdivisions during the 2011 Census based on 2010 receipts. File #1001A14.1 P a g e 7

11 Table 1 below gives an overview of the Counties having the largest overall Gross Farm Receipts. Lethbridge County is the only county in Alberta that generates over $1 billion in gross farm receipts, with Taber County being the next largest at only $675 million in gross farm receipts in on the next page shows these gross farm receipts of each county s agriculture sector in map form. Table 1: Alberta Counties with Gross Farm Receipts > $250 million 1 County Gross Farm Receipts (2010) Lethbridge County 1,058,080,453 Taber 674,104,250 Vulcan County 534,826,356 Wheatland County 485,025,244 Red Deer County 331,093,123 Lacombe County 311,827,528 Kneehill County 301,741,391 Willow Creek No ,432,797 Newell County No ,986,982 Vermilion River County 278,186,370 Rocky View County 269,453,933 Forty Mile County No ,907,405 Ponoka County 248,891,989 Mountain View County 245,142,082 Warner County No ,166,536 Foothills No ,853,782 Cypress County 236,366,183 1 Source: 2011 Census of Agriculture File #1001A14.1 P a g e 8

12 Figure 9: Map of Gross Farm Receipts, by County File #1001A14.1 P a g e 9

13 Methodology Economic multipliers are used to measure the economic activity that is generated when purchases and investments are made by a business, including the resulting spin-off activities. Economic impacts measured for the various agriculture sectors consist of the following categories: Figure 10: Types of Economic Induced Indirect Direct Direct s the effects occurring to spending of the firm where the new economic activity takes place (e.g. the livestock operation must add employees and buy feed, etc.) Indirect s the effects occurring to the backward-linked industries that supply the firm creating the new economic activity (e.g. feed producers must increase production) Induced s some of the additional income of employees is spent on goods and services (by employees of the feeding operation and its upstream industries) File #1001A14.1 P a g e 10

14 Categories of The direct, indirect and induced impacts of the agricultural industry can be quantified in a number of different ways. The categories of impact that were calculated for the various sectors include the following: Gross Output: is a measure of all sales by producing companies in the province or region. This includes intermediate goods and services consumed in the production process. GDP: Gross Domestic Product can be defined as gross output with all intermediate goods and services subtracted. Labour Income: the gross income earned by employees in the region. Employment: the number of people employed in the region. Each of these categories will have direct, indirect and induced effects. For example, the employment impact would include the following types of impact: Direct employment impact: the employees working in the agriculture industry Indirect employment impact: the employees working in the agriculture and agribusiness supply industries Induced employment impact: the additional employment that results from the increased consumer spending flowing from direct and indirect impacts There are several different methods of quantifying economic impact depending on the information available. Generally speaking the economic multipliers used in an input-output model are meant primarily to model the change in output generated by an individual enterprise or change in scope of an enterprise, not of the entire industry. In fact, the Alberta Finance document Alberta Economic Multipliers 2010 states: Due to the limitations of the I/O model, it is unlikely that many of the assumptions and caveats associated with the multipliers would hold fully in the real world. It is important to understand the limitations and apply the multipliers in a reasonable way. However, it is possible to compare the general and relative magnitude of a practice of using the multipliers in this way has developed in order to compare the relative impact of various industry sectors. The results should be treated as general estimates only and not as absolute values. The reader of the current report is reminded that this is appropriate use of the estimates generated through the economic impact modelling methodology. File #1001A14.1 P a g e 11

15 Economic Multipliers Given that the datasets available lend themselves to estimation of gross output much more readily than expenditures, we have chosen to use the simple multipliers based on commodity supply ratios from in the Alberta Economic Multipliers In practice, this means that we employed Table 1 of the Alberta Finance multiplier tables to estimate the direct and indirect impacts (a GDP multiplier of for all of the category crop and animal production and an output multiplier of 1.948). For the total impact including induced impacts as well, Table 5 was used, with a GDP multiplier of and a total contribution (Output) multiplier of The labour income multipliers used were for direct and indirect impacts and for total impacts, including induced effects. 2 An estimate of gross output for each of the agricultural sectors was created using data from a large variety of sources, depending on the availability of price and production data, largely from federal and provincial government sources. A full listing of references reviewed in the course of this study is included as Appendix A. Caution must be exercised in interpreting the results, whether they be for GDP, Total Contribution, or Employment/Income. In all cases, Alberta Finance provides multipliers for the entirety of the crop and animal production industry. The multipliers do not differentiate based on either location within the province or subsector. The model is exactly that a model, designed to allow for comparison of the approximate and relative size of economic elements. This is particularly the case for labour income. There are known to be large differences in terms of labour requirements per dollar of output (between greenhouses or broiler chickens, for example), but the multiplier model uses one multiplier across the entire agricultural sector. Capital Costs Initial construction of the large feedlot operations in the County would have had significant economic impact, especially in terms of increased employment, at the time of initial construction. The economic impact of initial construction is not included in the economic impact estimates. However, the economic impact does include the cost of capital replacement, as it includes depreciation costs and building repair in the direct expenditures of the sectors. However, the economic impact does not include the initial investments made in constructing the infrastructure. 2 The Table 5 Labour Income multiplier for crop and animal production was initially published as Alberta Finance was to prepare and publish a reprint after re-examining this number and determining that the multiplier should be File #1001A14.1 P a g e 12

16 Time Adjustment Data was sought out and drawn from a number of different sources to arrive at an estimate of economic impact. The most comprehensive and accurate data source for inventory of livestock was the 2011 Census of Agriculture. For that reason, data from 2011 was used wherever possible, and adjusted through indexing otherwise. Livestock inventories were drawn from the 2011 Census of Agriculture, which is based on the inventory on a single day, being May 10, Given the nature of livestock production and the variability that can occur over time, the economic impact would be expected to vary along with the total inventory. Using this one consistent dataset allows for the most reliable comparison between the various sectors. Crop acreages for the province of Alberta are available on an annual basis, but that does not include acreages to the County or census subdivision level. We have therefore also used 2011 Census of Agriculture as estimates of the size of the crop sectors. The economic multipliers by industry for Alberta are issued annually and the most current version available, a May 2014 release, is based on 2010 input-output data. Given that the livestock inventories are actually for a date in the first half of that year and the relatively low Consumer Price Index (CPI) differential, it is our opinion that it is reasonable to use the 2010 multipliers without any further adjustment. There have been very significant variations in the prices of agricultural outputs over the period Generally speaking, crop prices initially increased very drastically over that period, but have since declined again during While profitability was affected significantly by this variability in the cost of the feed, livestock prices of individual species have varied based on numerous other factors as well. While it was initially hoped that more recent prices could be used, the best relative representation of the various sectors can only be developed by having prices align most closely with inventories, acreages, and the input-output multipliers. Wherever possible, the model therefore also uses 2011 pricing for both crops and livestock. Livestock Inventory A multitude of potential data sources were examined in an attempt to find the most accurate and most recent source for the scope of agricultural subsectors with. Most agricultural statistics are not available at such a small scale. They are commonly expressed either at the Agricultural Land Use scale or Census Divisions (not Census Subdivisions). File #1001A14.1 P a g e 13

17 This is the case for crops as well, where acreage by County is only released from Census of Agriculture data, not by the annual Farm Financial Survey or from AFSC crop insurance. This presented a particular challenge for estimating the scope of the livestock sectors, however, given the large variability in production size from year to year, in addition an extreme dearth of tracking by County at all. Given the size of the cattle feeding industry, getting the best data source was of high importance. CanFax, the statistical agency of the Canadian Cattlemen s Association, Alberta Agriculture & Rural Development (ARD), and the Natural Resource Conservation Board (NRCB) were all contacted to attempt to find data sources. In the end, we concluded that the best data source to serve as the basis for estimating an individual sector s gross output by County is the 2011 Census of Agriculture. The NRCB was also able to do a special pull of their database to compile their best estimate of bunk capacity in the County. To allow for best comparison with all other data, the Census was used, but the NRCB permitted volumes are also of relevance and have been attached as Appendix B. In the end, it is our opinion that in order to best meet the purpose of this element of the project (comparing approximate scope of the beef sector against other sectors within the County), Census of Agriculture inventories be used as the basis for all of the species. For that reason, Census inventories were used as the basis to prepare an estimate of the total annual production price data was then applied to arrive at an approximation of the total output of that sector s primary product. Feed The economic impact analysis methodology used is based on the gross output of a sector. In the case of crops, this includes the estimated market value of the crops and the average crop prices for the 2011 crop year. The total direct, indirect and induced effects of that output are already captured in the estimates of crop sectors, so they should not be captured in the livestock sector. We have therefore estimated the ratio of feed costs to gross output for all of the relevant livestock sectors and discounted the total output accordingly. Wherever possible, only the purchased primary feeds are removed, while all feed supplements, minerals, and pasture costs remain included in the calculation of economic impacts. File #1001A14.1 P a g e 14

18 Economic Livestock Sectors Lethbridge County is a hotbed of the cattle industry, with heavy emphasis on confined feedlot feeding. The map below shows the distribution of cattle numbers across Alberta s counties with strong centralization of distribution in southern Alberta, particularly Lethbridge County. Figure 11: Distribution of Cattle and Calves across Alberta Counties 3 The total contribution to the economy from the feedlot sector was estimated using the 2011 Census estimate of 373,082 head 4. As the census 3 Source: 2011 Census of Agriculture. 4 We used as an estimate of the number of feeder cattle in May 2011, the number of heifers for slaughter for feeding, steers one year or over, and the total calves under one year old. We subtracted from this 16,066 calves (to match the number of beef cows), as these are included in the impact estimate for the cow-calf sector that follows. File #1001A14.1 P a g e 15

19 statistics do not differentiate directly between background feeder cattle and those in finishing feedlots, we have assumed that all feeders will be finished within the County. The gross output was then estimated using an average turnover of 2.25 cycles per year, and an average price of $97.39/cwt for finished cattle. In order to not double-count the impact of feed grown within the County or count the contributions of feed grown elsewhere, the cost of feed is removed from the impact estimates. Using this methodology, we estimate a contribution of $230 million toward Gross Domestic Product from beef feeding operations in Lethbridge County, with a total contribution to the economy (including direct, indirect, and induced impacts) of $621.5 million. Table 2: of Beef Feeding Direct & Indirect Induced s Total GDP $200,514,955 $29,901,353 $230,416,309 Total Output $571,057,212 $50,421,889 $621,479,102 Labour Income $75,632,834 $14,364,375 $89,997,210 While feedlots are the largest part of the beef sector in the county, there is also a significant cow-calf sector, which is estimated to contribute $18.9 million to the economy, for a contribution of $7 million to GDP. This is based on an inventory of just over 16,000 cows and includes the value of culls 5. As is the case for the other livestock sectors, the cost of purchased feed has been excluded. The cost of pasture, however, is included as this this is not otherwise accounted for in the economic impact estimates. Table 3: of Cow-Calf Operations Direct & Indirect Induced s Total GDP $6,096,777 $909,169 $7,005,946 Total Output $17,363,336 $1,533,108 $18,896,444 Labour Income $2,299,662 $436,757 $2,736,419 There is also a very significant dairy sector, as compared to most other counties in Alberta. Lethbridge County had an inventory of 8,840 dairy cows in the 2011 Census, second only to Lacombe County, which had 9,720 cows. Ponoka County also had almost 8,700 head, but all other counties in the province had below 6,000 dairy cows each. 5 Estimate of production value from Alberta Agriculture AgriProfit$ Benchmarks for Southern Alberta. File #1001A14.1 P a g e 16

20 Figure 12: Distribution of Dairy Cows across Alberta Counties 6 We estimate that the total contribution to the economy from the dairy sector is almost $94.5 million, with a contribution of $35 million to Gross Domestic Product. This estimate is based on 8,840 dairy cows and a 2011 average Gross Income for Southern Alberta of $7, per cow. Table 4: of Dairy Operations Direct & Indirect Induced s Total GDP $30,468,988 $4,543,621 $35,012,609 Total Output $86,774,253 $7,661,792 $94,436,045 Labour Income $11,492,688 $2,182,720 $13,675,408 While beef and dairy operations represent by far the largest livestock sectors in the County, the poultry, pork, and sheep sectors also make significant contributions to the economy, as outlined below in Table 5 to Table 7. 6 Source: 2011 Census of Agriculture. Map shows the number of dairy cows (not including dairy heifers meant as replacements). File #1001A14.1 P a g e 17

21 Table 5: of Broiler Chicken Production Direct & Indirect Induced s Total GDP $1,415,086 $211,022 $1,626,107 Total Output $4,030,098 $355,840 $4,385,938 Labour Income $533,760 $101,373 $635,133 Table 6: of Pork Operations Direct & Indirect Induced s Total GDP $5,295,524 $789,683 $6,085,207 Total Output $15,081,404 $1,331,623 $16,413,027 Labour Income $1,997,434 $379,358 $2,376,792 Table 7: of Sheep Production Direct & Indirect Induced s Total GDP $782,787 $116,731 $899,518 Total Output $2,229,340 $196,841 $2,426,181 Labour Income $295,262 $56,077 $351,338 The diagram below illustrates the relative contributions of all of the livestock sectors analyzed in this study. Beef makes by far the largest contribution, representing 82% of the livestock sector and 56% of the total agricultural contributions of the County. Figure 13: Lethbridge County Livestock Sectors Total Contribution to Economy File #1001A14.1 P a g e 18

22 Crop Sectors The 2011 Census of Agriculture was used to determine the most common crops and their estimated acreage. The crops with more than 1,000 acres are outlined in Table 8 below. Table 8: Lethbridge County Crop Acreages 7 Crop # Farms Acres Spring wheat (excl durum) ,197 Barley ,228 Canola (rapeseed) ,032 Alfalfa and alfalfa mixtures ,233 Durum wheat 73 24,539 All other fodder crops ,731 Corn for silage 83 20,595 Dry field peas 44 16,045 Winter wheat 35 9,309 Sugar beets 37 6,079 Oats 37 6,027 Flaxseed 27 5,472 Triticale 14 4,716 Forage seed for seed 14 4,373 Lentils 11 3,263 Other dry beans 13 2,159 Fall rye 12 1,830 Potatoes 7 1,366 All other crops had acreages significantly below 1,000 acres each and were not included in the overall analysis of the crop sector s economic impact. In addition, as the purpose for calculating the impact of individual crops is merely for comparison relative to the other crops, only those crops with relatively complete and accurate data sources are included in the impact results outlined below. The impact of some crops would require considerably more investigation alfalfa, for example, may have been grown as feed for livestock within the County, in which case care would need to be taken to not include its impact, as it is already counted as an input to livestock production. The prices or yields for some crops are also not readily available specifically for the County given the relatively small geography. There were nine greenhouse operations in the County in 2011, with a total area of 66,803 square metres. Given that overall impact as a percentage of 7 Census of Agriculture, 2011 File #1001A14.1 P a g e 19

23 total agriculture impact will be small, average Alberta return benchmarks for commercial-scale greenhouse operations were used to estimate the overall sales and impact of the greenhouse sector. In Alberta, average gross revenue from greenhouse operations was approximately $ per square metre. Lastly, Lethbridge County includes almost 300,000 acres of irrigated land. This was taken into account in weighting average yields using Risk Area 2 averages provided by AFSC. As outlined above, data was gathered on prices from a number of sources including Statistics Canada 8 and other sources, including cost of production studies by Alberta Agriculture & Rural Development for sugar beets and potatoes. Yield data was obtained primarily from summaries of AFSC crop insurance data, but is also supplemented from other sources. Estimates of total crop output value for Lethbridge County are outlined in Table 9 below. Crop Table 9: Estimated Output of Key Field Crops, Lethbridge County 2011 Acres (Lethbridge County) Price ($/tonne) 2011 Yield Crop Output bu/ac tonne/ac $/ac County 2011 Canola 101,032 $ $ $55,435,748 Wheat 132,506 $ $ $49,097,223 Barley 115,228 $ $ $26,569,462 Durum wheat 24,539 $ $ $9,626,052 Sugar beets 6,079 $ $1, $8,459,050 Greenhouses 66,803 m 2 x $124.62/m 2 $8,324,682 Dry field peas 16,045 $ $ $8,330,527 Potatoes 1,366 $ $3, $4,901,614 Flaxseed 5,472 $ $ $2,167,749 Oats 6,027 $ $ $1,316,581 Lentils 3,263 $ ,330 lbs 0.6 $ $972,219 $175,200,908 Potatoes and sugar beets in particular produced a large gross value of over $3,500 and $1,400 per acre, while canola and peas produced over $500 per acre and most of the other crops produced in the range of $ per acre in The three largest crops by acreage are wheat, barley and canola and they grossed $371, $231 and $549 per acre respectively. The acreage and gross output of the various crops is shown below in Figure CanSim Table Monthly prices averaged for Sept 2011 June File #1001A14.1 P a g e 20

24 Figure 14: Lethbridge County Acreage & Gross Output, by Crop in 2011 Between the three primary field crops for western Canada (wheat, barley, and canola), the value of the crop output is over $140 million. Sugar beets and peas also generate considerable cash output, at over $8 million for each of those crops. The impact of those crops, based on the Alberta Finance economic multipliers, is as outlined in the tables below. Table 10: of Canola Production Direct & Indirect Induced s Total GDP $37,918,052 $5,654,446 $43,572,498 Total Output $107,988,838 $9,534,949 $117,523,786 Labour Income $14,302,423 $2,716,352 $17,018,775 Table 11: of Wheat Production 9 Direct & Indirect Induced s Total GDP $40,166,721 $5,989,774 $46,156,495 Total Output $114,392,941 $10,100,403 $124,493,345 Labour Income $15,150,605 $2,877,441 $18,028,046 9 Includes spring and durum wheat File #1001A14.1 P a g e 21

25 Table 12: of Barley Production Direct & Indirect Induced s Total GDP $18,173,512 $2,710,085 $20,883,597 Total Output $51,757,312 $4,569,947 $56,327,259 Labour Income $6,854,921 $1,301,904 $8,156,825 Table 13: of Sugar Beet Production Direct & Indirect Induced s Total GDP $5,785,990 $862,823 $6,648,813 Total Output $16,478,230 $1,454,957 $17,933,186 Labour Income $2,182,435 $414,493 $2,596,928 Wheat, canola and barley together make up over 80% of the total crop impact in the county, but there are quite a number of other crops that also make significant contributions in the millions of dollars annually. The relative impact of the various crop sectors is outlined in Figure 15 below. Figure 15: Lethbridge County Crop Sectors Total Contribution to Economy File #1001A14.1 P a g e 22

26 Sector Comparison It is clear from the analyses above that, that several agricultural subsectors are considerably larger than all of the others. Bovine sectors and the major field crops represent the largest contribution to the Alberta economy. In total, for all of the livestock sectors reviewed in this the course of this project, we estimate a contribution of $758 million by Lethbridge County to the Alberta economy annually. Between beef feeding, dairy and the cowcalf sector, we estimate a total contribution of approximately $735 million annually, or 97% of the total livestock impact for the county. Likewise, only three field crops make up 80% of the total estimated Lethbridge County crop-sector impact of $371.4 million. Wheat, barley and canola together have an estimated impact on the economy of approximately $298 million. Table 14 below and Figure 16 on the next page show the relative size of these key livestock and crop elements in Lethbridge County. Table 14: Comparison of Lethbridge County Agriculture Sectors Contribution to Economy & GDP Total Contribution to Economy GDP Livestock Beef $621,500,000 $230,400,000 Dairy $94,400,000 $35,000,000 Cow-Calf $18,900,000 $7,000,000 Pork $16,400,000 $6,100,000 Chicken $4,400,000 $1,600,000 Sheep $2,400,000 $900,000 Livestock - Total $758,000,000 $281,000,000 Crops Wheat $124,500,000 $46,200,000 Canola $117,500,000 $43,600,000 Barley $56,300,000 $20,900,000 Peas & Lentils $19,700,000 $7,300,000 Sugar Beets $17,900,000 $6,600,000 Greenhouses $17,600,000 $6,500,000 Potatoes $10,400,000 $3,900,000 Flax $4,600,000 $1,700,000 Oats $2,800,000 $1,000,000 Crops - Total $371,300,000 $137,700,000 Total -- Agriculture $1,129,300,000 $418,700,000 File #1001A14.1 P a g e 23

27 Figure 16: Lethbridge County Agriculture Sectors - Total Contribution to Economy In total, we estimate that the agricultural sector contributed approximately $1.1 billion to the Alberta economy in 2011, with its contribution to Gross Domestic Product being approximately $419 million. Of the total contribution of Lethbridge County agriculture to the economy, 67% comes from livestock sectors, with 55% being from beef feeding operations alone. 33% of the total agricultural contribution comes from crops, with wheat and canola making the largest contributions annually to the economy of over $100 million each. File #1001A14.1 P a g e 24

28 Appendix A: Reference Sources Agriculture and Agri-Food Canada. Potato Market Information Review: April Agriculture Financial Services Corporation. Yield Alberta Agriculture & Rural Development, AgriProfit$ Benchmarks for Cattlement. Production Year Alberta Agriculture and Rural Development (Statistics and Data Development Branch) Census of Agriculture for Alberta: I.D., M.D., and County Data by Land-use Region Alberta Agriculture and Rural Development. AgriProfit$: The Economics of Sugar Beet Production in Alberta Alberta Agriculture and Rural Development. Dairy Cost Study: The Economics of Milk Production in Alberta July Alberta Agriculture and Rural Development. The Economics of Production and Marketing of Greenhouse Crops in Alberta. August Alberta Lamb Producers. The Busine$$ of Sheep Alberta Steer and Heifer feeder Prices Canfax Alberta Treasury Board and Finance. Alberta Economic Multipliers An Analysis of the Current Goat Industry with a Focus on Alberta. Alberta Goat Breeders Association, January Business and Marketing: Evaluating Farm Resources and Sheep Production Systems- Ontario Ministry of Agriculture and Food Canada Farm Operating Expenses and Depreciation Charges Stats Canada Canadian Dairy Information Centre Government of Canada Canfax Research Services. International Cost of Production Analysis, Agri-Benchmark: Feedlot Analysis. CanFax, Annual Report CanFax, Annual Report Cost of Production Raising Profitable Sheep, Alberta Cost of Production, November 2013 Canadian Dairy Commission Economics and Marketing: Breakeven Analysis for Feeder Cattle Alberta Agriculture and Rural Development Economics of Milk Production Dairy Cost Study Alberta Agriculture and Rural Development Feeder Trends and Breakeven Analysis West, January June 2011 Canfax Goat Supply at a Glance Canada. September Guidelines for Estimating Lamb Production Costs December, Government of Manitoba Statistics Canada, Census of Agriculture Various summaries and data tables. File #1001A14.1 P a g e 25

29 Appendix B: Livestock Inventories 2011 Census of Agriculture Livestock Inventories # farms # head # farms kg Beef Cattle 414,627 Poultry Heifers for slaughter or feeding ,835 Broilers, roasters and Cornish 32 1,284,993 Steers, 1 year and over ,561 Layer and broiler breeders 5 32,333 Beef cows ,066 Laying hens 60 11,147 Heifers for beef herd replacement 92 8,487 Pullets for laying 13 1,382 Bulls, 1 year and over Other poultry 19 6,905 Calves, under 1 year ,752 Turkeys 7 X Dairy Cattle 12,975 Dairy cows 67 8,840 Heifers for dairy herd replacement 61 4,135 Pork 81,952 Nursing and weaner pigs 12 16,370 Grower and finishing pigs 22 44,677 Weaner pigs 12 10,318 Nursing pigs 10 6,052 Sows and gilts for breeding 14 4,535 Sheep & Goats 17,459 Lambs 61 7,313 Ewes 63 6,265 Rams Goats 22 3,606 Assumptions made: Beef feedlot turnover is 2.25 cycles per year Pork turnover is 2 times per year File #1001A14.1 P a g e 26

30 NRCB -- Permitted Livestock Type and Quantity for Lethbridge County Permitted Existing/ Grandfather Total Cattle 460, , ,150 Cows/Finishers (900+ lbs) 341,480 90, ,280 Feeders ( lbs) 119,275 20, ,870 Dairy 3,844 3,135 6,979 Lactating Cows Only 2,344 3,135 5,479 Calves (<350 lbs) 1,500 1,500 Horses Feeders > 750 lbs Poultry 1,084, ,400 1,469,250 Chicken - Breeders 17,700 17,700 Chicken - Layers (inc pullets) 33,800 36,400 70,200 Chicken - Pullets/Broilers 1,032, ,200 1,375,300 Ducks 1,000 3,200 4,200 Geese 250 1,600 1,850 Sheep 52, ,700 Ewes with Lambs Ewes/rams Feeders 50, ,100 Lambs Swine 57,584 13,425 71,009 Farrow Only Farrow To Finish 7,729 2,545 10,274 Farrow to Wean 1,480 1,880 3,360 Feeders/Boars 42,325 8,300 50,625 Weaners 5, ,300 Note that the Permitted amount includes capacity permitted since the NRCB regulations came into force December 31, They do include some feedlots that were initially grandfathered, but have since applied for increases to capacity. File #1001A14.1 P a g e 27