AN ECONOMIC DESCRIPTION OF THE AGRICULTURE SECTOR IN LYON COUNTY

TECHNICAL REPORT UCED 93-14 AN ECONOMIC DESCRIPTION OF THE AGRICULTURE SECTOR IN LYON COUNTY UNIVERSITY OF NEVADA, RENO

An Economic Description of the Agriculture Sector in Lyon County Report Prepared by Thomas R. MacDiarmid, Karl A. McArthur Thomas R. Harris and Rangesan Narayanan Thomas R. MacDiarmid is a Research Associate in the Department of Agricultural Economics at the University of Nevada, Reno. Karl A. McArthur is a Research Associate in the Department of Agricultural Economics at the University of Nevada, Reno. Thomas R. Harris is a Professor in the Department of Agricultural Economics and Director of the University Center for Economic Development at the University of Nevada, Reno. Rangesan Narayanan is a Professor and Chair in the Department of Agricultural Economics at the University of Nevada, Reno. University Center for Economic Development Department of Agricultural Economics University of Nevada, Reno Reno, Nevada (775) 784-1681 January, 1994 UNIVERSITY OF NEVADA RENO The University of Nevada, Reno is an Equal Opportunity/Affirmative Action employer and does not discriminate on the basis of race color religion sex age creed national origin veteran status physical or mental disability and in accordance with university policy sexual orientation in any program or activity it operates. The University of Nevada employs only United States citizens and aliens lawfully authorized to work in the United States. ii

This publication, An Economic Description of the Agriculture Sector in Lyon County was published by the University of Nevada Economic Development Center. Funds for the publication were provided by the United States Department of Commerce Economic Development Administration under University Centers Program contract #07-06-03262-93. This publication's statements, findings, conclusions, recommendations, and/or data represent solely the findings and views of the authors and do not necessarily represent the views of the United States Department of Commerce, the Economic Development Administration, University of Nevada, or any reference sources used or quoted by this study. Reference to research projects, programs, books, magazines, or newspaper articles does not imply an endorsement or recommendation by the authors unless otherwise stated. Correspondence regarding this document should be sent to: Thomas R. Harris, Director University Center for Economic Development University of Nevada, Reno Department of Agricultural Economics Mail Stop 204 Reno, Nevada 89557-0105 UCED University of Nevada, Reno Nevada Cooperative Extension Department of Agricultural Economics iii

Summary The report is an economic description of the agriculture sector in Lyon County. Data on the economic performance of the agriculture sector and economic activity generated by the agriculture sector is provided in the report. Information on the agriculture sector is presented separately and within the context of the county economy. Major findings include: The agriculture sector in 1990 produced livestock, dairy, alfalfa hay, other hay, and vegetable commodities. In 1990, the personal income from the agriculture sector was $14 million. This includes farm proprietor's income and farm labor income in the form of wages and salaries. There were 557 full and part-time agricultural jobs. Total output for the sector was $44 million. During the period 1980 through 1990, average yearly cash receipts and other income for the agriculture sector were $39 million. Production expenses for the period averaged $33 million. Net income was on average $6 million. Yearly production expenses remained fairly constant over the period indicating stability in the agriculture sector. The contribution of the agriculture sector in relation to other economic sectors in the county economy was 12% of the total industry output, 8% of the number of jobs, and, 11% of the personal income in 1990. In the predominantly agricultural areas of the county, however, the agriculture sector represents a larger proportion of direct economic activity. The agriculture sector is classified as an export sector. An export sector makes sales outside the county which brings an injection of funds into the county. An injection of funds generates additional economic activity. An import sector, on the other hand, makes purchases outside the county resulting in a leakage of funds. Economic growth measured by employment for the agriculture sector indicated a favorable local advantage. Following national employment trends the agriculture sector should have lost 120 jobs from 1980 through 1990 but instead lost 82. Personal income per agricultural job in real terms increased by $1,800 from 1980 through 1990 (constant 1990 dollars). The total economic activity generated by the agriculture sector in the county economy in 1990 was $88 million in industry output creating 1,349 jobs which provided $21 million in personal income. Total economic activity is measured through an accounting of direct, indirect, and induced linkages that the agriculture sector has with other economic sectors in the county economy. 1

Tables 1 and 2 Table 1 provides information on population, numbers of housing units, and numbers of persons employed in Lyon County in 1990. There were 594 persons living on farms out of the total county population of 20,001 persons. Farm families occupied 197 of the 8,722 total housing units in the county. Of the 8,583 persons employed in the county 534 were employed either as farm operators and managers or as farm workers and related occupations. Table 2 presents data on the Lyon County agriculture sector for 1990. The sector is divided by farm commodities produced in the county. Industry output, employment, and personal income are listed by commodity. The total production of farm commodities was valued at $43,892,052. Employment in the agriculture sector was 557 full and part-time jobs which accounted for $13,727,000 in personal income. These figures represent the direct economic activity generated by the agriculture sector in the county economy. 2

Table 1. Population, Number of Housing Units and Number of Persons Employed by Occupation in Lyon County in 1990 Lyon County Population Housing Units Occupations All Persons Occupied Employed Persons Farm 594 Total 20,001 Rural Farm 197 Rural 6,692 Total 8,722 Farm Operators and Managers 201 Farm Workers and Related Occupations 333 Total 8,583 Source: U.S. Department of Commerce. Bureau of the Census. Table 2. The Agriculture Sector Industry Output, Employment, and Personal Income by Farm Commodity Produced in Lyon County in 1990. Farm Commodity Industry Output Employment Personal Income $'s Job's $'s Livestock 13,531,162 172 4,231,797 Dairy 2,315,410 29 724,132 Alfalfa Hay 19,916,880 253 6,228,896 Other Hay 1,596,600 20 499,328 Alfalfa Seed 0 0 0 Wheat 0 0 0 Barley 0 0 0 Vegetables 6,532,000 83 2,042,847 Total 43,892,052 557 13,727,000 Source: U.S. Department of Agriculture. Nevada Agricultural Statistics Service. Source: U.S. Department of Agriculture. Nevada Agricultural Statistics Service 3

Tables 3 and 4 Table 3 shows the income received and expenses paid by farmers in Lyon County from 1980 through 1990. Eleven year averages are calculated for cash receipts and other income, production expenses, realized net income, and farm labor and proprietor's income. These amounts are $38,565,364 for cash receipts, $32,715,909 for production expenses, $5,849,455 for net income, and $7,191,727 for labor and proprietor's income. Table 4 describes the economic base of Lyon County in terms of industry output, employment, and personal income by economic sector for 1990. In addition to the agriculture sector there are other economic sectors in the county economy. These sectors are agricultural services, mining, construction, manufacturing, transportation and public utilities, wholesale and retail trade, finance, insurance, and real estate, services, and state and local government. Together the economic sectors produced $411,063,156 in industry output, created 7,503 full and part-time jobs which provided for $142,314,000 in personal income. 4

Table 3. Income Received and Expenses Paid by Farmers in Lyon County from 1980 through 1990 Year Cash Receipts Production Realized Farm Labor and Other Expenses Net and Proprietor's Income Income Income $'s $'s $'s $'s 1980 36,868,000 31,761,000 5,107,000 9,074,000 1981 38,042,000 33,462,000 4,580,000 6,757,000 1982 34,911,000 33,528,000 1,383,000 2,759,000 1983 37,816,000 36,176,000 1,640,000 3,450,000 1984 38,513,000 34,739,000 3,774,000 4,216,000 1985 34,887,000 32,858,000 2,029,000 3,282,000 1986 33,204,000 30,797,000 2,407,000 2,830,000 1987 35,717,000 30,492,000 5,225,000 5,238,000 1988 40,822,000 30,915,000 9,907,000 9,832,000 1989 43,386,000 30,595,000 12,791,000 17,944,000 1990 50,053,000 34,552,000 15,501,000 13,727,000 Average 38,565,364 32,715,909 5,849,455 7,191,727 Source: U.S. Department of Commerce. Bureau of Economic Analysis 5

Table 4. A Description of the Economic Base of Lyon County in terms of Industry Output, Employment, and Personal Income by Economic Sector for 1990 Economic Sector Industry Output Employment Personal Income $'s Job's $'s Agriculture 43,892,052 557 13,727,000 Agricultural Services 3,357,982 91 1,690,000 Mining 7,139,246 174 5,205,000 Construction 64,792,498 718 16,031,000 Manufacturing 122,548,720 1,276 29,420,000 Transportation and Public Utilities 38,130,854 441 11,023,000 Wholesale and Retail Trade 32,263,806 1,092 14,953,000 Finance, Insurance, and Real Estate 28,084,940 478 3,811,000 Services 40,410,962 1,805 26,772,000 State and Local Government 30,442,096 871 19,682,000 Total 411,063,156 7,503 142,314,000 Source: U.S. Department of Agriculture. National Agricultural Statistics Service U.S. Department of Commerce. Bureau of the Census. U.S. Department of Commerce. Bureau of Economic Analysis 6

Tables 5 and 6 Table 5 lists an economic classification of economic sectors in Lyon County in 1990. Each economic sector is classified as either an export sector or an import sector. An export sector makes sales outside the county which brings an injection of funds into the local economy. Agriculture is classified as an export sector. An import sector indicates that the county economy is not self-sufficient in the production of goods and services of that sector. Some or all of the goods and services of that sector must be purchased from outside the county. The purchases result in a leakage of funds from the county economy. Table 6 provides a decomposition of economic growth measured by employment by economic sector in Lyon County from 1980 to 1990. Economic growth for a given sector in the county economy is influenced by national and local trends. National trends include the standard growth and industry mix components. The local trend is called the competitive share component. Following national trends, the agriculture sector would have lost 120 jobs. However, due to a favorable local advantage, the sector lost only 82 jobs. 7

Table 5. An Economic Classification of Economic Sectors in Lyon County in 1990. Economic Sector Economic Flow Classification of Funds Direction Agriculture Export Injection Agricultural Services Export Injection Mining Export Injection Construction Export Injection Manufacturing Export Injection Transportation and Public Utilities Export Injection Wholesale and Retail Trade Import Leakage Finance, Insurance, and Real Estate Import Leakage Services Import Leakage State and Local Government Note: Information derived using location-quotient analysis. 8

Table 6. A Decomposition of Economic Growth measured by Employment by Economic Sector in Lyon County from 1980 to 1990 Economic Sector Standard Industry Competitve Employment Growth Mix Share Change Component Component Component Job's Job's Job's Job's Agriculture 142-262 38-82 Agricultural Services 16 21-16 21 Mining 37-74 45 8 Construction 76 21 279 376 Manufacturing 109-133 809 785 Transportation and Public Utilities 31-8 280 303 Wholesale and Retail Trade 146 16 275 436 Finance, Insurance, and Real Estate 65 37 83 185 Services 183 262 535 980 State and Local Government 136-49 173 260 Note: Information derived using shift-share analysis 9

Tables 7 and 8 Table 7 expresses the personal income change per job by economic sector in Lyon County from 1980 to 1990 in constant 1990 dollars. Personal income per job for the agriculture sector in 1980 was $22,812 and $24,645 in 1990. This represents an increase in real terms of $1,833 per job in 1990 dollars. Table 8 presents the total economic activity generated by the agriculture sector in terms of industry output, employment, and personal income in Lyon County in 1990. The direct economic activity generated by the agriculture sector was $43,892,052 in industry output, 557 full and part-time jobs, and $13,727,000 in personal income. The indirect and induced economic activity generated by the agriculture sector was an additional $44,456,219 in industry output, 792 jobs, and $7,753,228 in personal income. Total economic activity generated by the agriculture sector was $88,348,271 in industry output, 1,349 jobs, and $21,480,228 in personal income. 10

Table 7. The Personal Income Change per Job by Economic Sector in Lyon County from 1980 to 1990 expressed in Constant 1990 Dollars Economic Sector 1980 1990 Change Personal Income Personal Income Personal Income $'s / Job $'s / Job $'s / Job Agriculture 22,812 24,645 1,833 Agricultural Services 16,271 18,571 2,300 Mining 32,922 29,914-3,009 Construction 27,371 22,327-5,043 Manufacturing 24,388 23,056-1,331 Transportation and Public Utilities 26,413 24,995-1,418 Wholesale and Retail Trade 17,730 13,693-4,036 Finance, Insurance, and Real Estate 9,469 7,973-1496 Services 14,925 14,832-93 State and Local Government 20,284 22,597 2,313 Note: The 1980 personal income dollars are inflated to 1990 dollars 11

Table 8. The Total Economic Activity generated by the Agriculture Sector in terms of Industry Ouput Employment, and Personal Income in Lyon County in 1990., Economic Activity Industry Employment Personal Income Output $'s Job's $'s Direct Economic Activity Agriculture 43,892,052 557 13,727,000 Indirect and Induced Economic Activity by Economic Sector Agriculture 2,022,544 25 765,269 Agricultural Services 1,902,857 52 806,363 Mining 15,176 0 4,265 Construction 1,017,481 11 293,598 Manufacturing 1,531,851 16 408,810 Transportation and Public Utilities 2,619,967 29 616,151 Wholesale and Retail Trade 3,183,318 110 1,494,871 Finance, Insurance, and Real Estate 3,631,980 62 503,835 Services 4,335,086 194 1,734,590 State and Local Government 2,715,732 78 1,103,260 Households 21,480,228 215 22,216 Total Indirect and Induced 44,456,219 792 7,753,228 Total Economic Activity 88,348,271 1,349 21,480,228 Note: Information derived using input-output analysis 12

References U.S. Department of Agriculture. Nevada Agricultural Statistics. Nevada Agricultural Statistics Service. Lyon County Livestock and Crop Production Data. Reno, Nevada. 1991. U.S. Department of Commerce. Farm Income and Expenses. Bureau of Economic Analysis. Regional Economic Information System. Lyon County Data. Washington D.C. 1992. U.S. Department of Commerce. Full-time and Part-time Employees by Major Industry. Bureau of Economic Analysis. Regional Economic Information System. Lyon County Data. Washington D.C. 1992. U.S. Department of Commerce. Nevada Detailed Housing Characteristics. 1990 Census of Housing. Bureau of the Census. Economics and Statistics Administration. Lyon County Data. Washington D.C. 1991. U.S. Department of Commerce. Nevada Social and Economic Characteristics. 1990 Census of Population. Bureau of the Census. Economics and Statistics Administration. Lyon County Data. Washington D.C. 1991. U.S. Department of Commerce. Nevada Summary Population and Housing Characteristics. 1990 Census of Population and Housing. Bureau of the Census. Economics and Statistics Administration. Lyon County Data. Washington D.C. 1991. U.S. Department of Commerce. Personal Income by Major Source and Earnings by Industry. Bureau of Economic Analysis. Regional Economic Information System. Lyon County Data. Washington D.C. 1992. University Center for Economic Development. Lyon County 20 Sector Input-Output Closed Model. Department of Agricultural Economics. University of Nevada, Reno. Reno, Nevada. 1993. 13