Estimated Economic Impact of Agriculture, Food, and Food Processing Sectors 9/8/2016
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1 Estimated Economic Impact of Agriculture, Food, and Food Processing Sectors 9/8/2016 This study was commissioned by the Agricultural Business Council of Kansas City and the American Royal and performed by the Kansas Department of Agriculture. Using the most recent IMPLAN data available (2014) adjusted for 2016, 74 agriculture, food, and food processing sectors were analyzed to determine their overall contribution to the economy 1 supported by the Kansas City Agribusiness Council. These 74 sectors have a total direct output of approximately $ 18.7 billion and create 53,223 jobs in the Greater Kansas City 2 area. Running the model for all 74 sectors simultaneously produces the following results: Impact Type 3 Employment % Employment Agriculture, Food, and Food Processing Sector Contribution Total Value Added 4 Product 5 Output 6 Product Direct Effect 53, % 5,157,461, % 18,747,743, % Indirect Effect 30, % 3,472,254, % 6,197,694, % Induced Effect 30, % 2,545,505, % 4,353,262, % Total Effect 114, % 11,175,221, % 29,298,700, % As shown in the above table, agriculture, food, and food processing supports 114,503 jobs, or 7.7% of the entire workforce in the area. These industries provide a total economic contribution of approximately $ 29.3 billion, roughly 21.9% of the economy. Another metric used to calculate the importance of sectors in an economy is their value added as a percentage of GRP. Total value added by the 74 agriculture, food, and food processing sectors is approximately $ 11.2 billion, or 8.4% of the GRP. This indicates that personal income, business income, and taxes generated by these sectors account for 8.4% of the total economy. The following tables document the overall summary numbers of the model, top industries affected by employment and output, and a listing of all industries that were analyzed. 1 Article on building a contribution analysis in IMPLAN that avoids double counting: 2 Greater Kansas City area includes: Atchison, Jefferson, Leavenworth, Douglas, Johnson, Franklin, Linn, Miami, and Wyandotte counties in Kansas and Buchanan, Clinton, Caldwell, Clay, Cass, Bates, Ray, Lafayette, Johnson, Jackson, and Platte counties in Missouri. 3 Direct, indirect, and induced effects sum together to estimate the total economic contribution in the state. Direct effects capture the contribution from agricultural and food products. Indirect effects capture the economic benefit from farms and agricultural businesses purchasing inputs from supporting industries within the state. Induced effects capture the benefits created when employees of farms, agricultural businesses, and the supporting industries spend their wages on goods and services within the state. 4 Value added = labor income + indirect business taxes + other property type income 5 GRP = final demand of households + government expenditures + capital + exports imports institutional sales 6 Output = intermediate inputs + value added
2 In the top ten by employment, Landscape and horticultural services is the top employer in the agriculture industry with 9,965.5 employees. This table also shows the amount of jobs that are created by the agriculture industry in Kansas City. Description Total Employment Total Output Landscape and horticultural services 9, ,803,698 Beef cattle ranching and farming, including feedlots and dualpurpose 47, , ,735,266, ,877,684 ranching and farming Wholesale trade 6, ,631,089,273 Animal production, except cattle and poultry 4, ,343,887 Management of companies and enterprises 3, ,864,300 Animal, except poultry, processing 3, ,127,036,425 Veterinary services 2, ,577,165 Truck transportation 2, ,535,554 Grain farming 2, ,328,200 Real estate 2, ,388,217 The Animal, except poultry, processing industry directly contributes approximately $ 2.1 billion to the Kansas City economy. This table also shows how much revenue is generated in other industries by having a strong agriculture industry. Description Total Employment Total Output Animal, except poultry, processing 3, ,127,036,425 Pesticide and other animal chemical manufacturing 1, ,894,159,979 Wholesale trade 6, ,631,089,273 Other animal food manufacturing ,317,231,319 Soybean and other oilseed processing ,066,465,187 Flour milling ,037,800,270 Pharmaceutical preparation manufacturing ,741,834 Management of companies and enterprises 3, ,864,300 Fats and oils refining and blending ,591,412 Biological product (except diagnostic) manufacturing 1, ,363,597
3 Below is a summary of all agriculture data with employment levels and output level. These values can tell how many jobs are represented by each agriculture sector and the output they contributed to the Kansas City economy. Description Employment Output Oilseed farming 1, ,063, Grain farming 2, ,328, Vegetable and melon farming ,564, Fruit farming ,626, Tree nut farming , Greenhouse, nursery, and floriculture production ,887, Tobacco farming ,032, All other crop farming 1, ,189, Beef cattle ranching and farming, including feedlots and dualpurpose ranching and farming 8, ,877, Dairy cattle and milk production ,793, Poultry and egg production ,870, Animal production, except cattle and poultry and eggs 4, ,343, Forestry, forest products, and timer tract production ,685, Commercial logging ,924, Commercial hunting and trapping ,313, Support activities for agriculture and forestry 1, ,766, Dog and cat food manufacturing ,479, Other animal food manufacturing ,317,231, Flour milling ,037,800, Rice milling ,170, Malt manufacturing ,413, Soybean and other oilseed processing ,066,465, Fats and oils refining and blending ,591, Breakfast cereal manufacturing ,026, Nonchocolate confectionery manufacturing ,090, Chocolate and confectionery manufacturing from cacao beans ,192, Confectionery manufacturing from purchased chocolate ,299, Frozen fruits, juices and vegetables manufacturing ,817, Frozen specialties manufacturing ,366, Canned fruits and vegetables manufacturing ,596, Canned specialties ,746, Dehydrated food products manufacturing ,901, Fluid milk manufacturing ,549, Cheese manufacturing ,712, Dry, condensed, and evaporated dairy product manufacturing ,225, Ice cream and frozen dessert manufacturing ,140, Animal, except poultry, processing 3, ,127,036, Meat processed from carcasses 1, ,199, Rendering and meat byproduct processing ,740, Poultry processing ,048, Bread and bakery product, except frozen, manufacturing 2, ,106,432.63
4 Frozen cakes and other pastries manufacturing ,104, Cookie and cracker manufacturing ,415, Dry pasta, mixes, and dough manufacturing ,913, Tortilla manufacturing ,920, Roasted nuts and peanut butter manufacturing ,225, Other snack food manufacturing ,301, Coffee and tea manufacturing ,944, Flavoring syrup and concentrate manufacturing ,029, Mayonnaise, dressing, and sauce manufacturing ,229, Spice and extract manufacturing ,253, All other food manufacturing ,109, Bottled and canned soft drinks & water ,768, Breweries ,947, Wineries ,987, Distilleries ,297, Tobacco product manufacturing ,795, Sawmills ,481, Paper mills ,039, Paperboard mills ,315, Nitrogenous fertilizer manufacturing ,768, Phosphatic fertilizer manufacturing ,753, Fertilizer mixing ,300, Pesticide and other agricultural chemical manufacturing 1, ,894,159, Medicinal and botanical manufacturing ,577, Pharmaceutical preparation manufacturing ,741, In-vitro diagnostic substance manufacturing ,915, Biological product (except diagnostic) manufacturing 1, ,363, Farm machinery and equipment manufacturing ,088, Lawn and garden equipment manufacturing ,885, Food product machinery manufacturing ,647, All other industrial machinery manufacturing ,878, Veterinary services 2, ,577, Landscape and horticultural services 9, ,803, TOTAL 114, ,298,700,662.33
5 **Calculations Including Food Retail and Restaurants** Estimated Impact of Agriculture, Food, Food Processing and Food Retail Sectors on the Kansas City Economy The agriculture and agribusiness industry makes up a substantial part of Kansas City s overall economy. These values do not factor in the retail environment of food sales. Food retail is important, but in order to provide the most accurate picture of what production agricultural and processing contributes to the Greater Kansas City area, the retail sector was omitted. If we were to include the food retail sector, the contribution to agriculture increases to $39.5 billion, represents 16.2% of the jobs, and increases total value added to $ 16.9 billion in Kansas. Impact Type 7 Employment % Employment Agriculture, Food, Food Processing, and Food Retail Sector Contribution Total Value Added 8 Product 9 Output 10 Product Direct Effect 159, % 8,432,116, % 24,810,760, % Indirect Effect 42, % 4,759,060, % 8,374,186, % Induced Effect 39, % 3,695,129, % 6,294,724, % Total Effect 241, % 16,886,306, % 39,479,671, % 7 Direct, indirect, and induced effects sum together to estimate the total economic contribution in the state. Direct effects capture the contribution from agricultural and food products. Indirect effects capture the economic benefit from farms and agricultural businesses purchasing inputs from supporting industries within the state. Induced effects capture the benefits created when employees of farms, agricultural businesses, and the supporting industries spend their wages on goods and services within the state. 8 Value added = labor income + indirect business taxes + other property type income 9 GRP = final demand of households + governments expenditures + capital + exports - imports institutional sales. 10 Output = intermediate inputs + value added.
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