New Arizona Ag Industry Number is Big

New Arizona Ag Industry Number is Big

You may know that Arizona ranks among leading states in the production of lettuce, spinach, broccoli, cauliflower, cantaloupe, honeydew, durum wheat, and other commodities, but did you know Arizona agriculture’s economic contribution to the state is $6 billion above the last study done to determine how big agriculture in Arizona really is? The University of Arizona College of Agriculture and Life Science’s Cooperative Extension Economic Impact Analyst team reported the new annual economic contribution numbers for Arizona’s agricultural industry during Arizona Farm Bureau’s Annual Meeting in Mesa, November 3. The economic team reported the new number is $23.3 billion .

Says the study, “The contribution of Arizona agriculture extends beyond on-farm production to include an entire system of industries involved in agriculture-related activities. This represents direct sales, value added, employment, and labor income for Arizona’s economy. In addition to the agribusiness system’s direct effects on the Arizona economy, a “ripple” of economic activity is stimulated in other industries outside of the agribusiness system to meet the demands of agricultural producers, suppliers, processors, and households that derive their income from agribusinesses, known as indirect and induced multiplier effects. Indirect effects capture economic activity in other, non-agricultural industries that provide goods and services as inputs to Arizona agribusinesses. Induced effects capture economic activity in industries that provide consumer goods and services to households. Direct, indirect, and induced effects combined measure the total economic contributions to the state economy.”

Conducted by Ashley Kerna Bickel, Dari Duval and George Frisvold Department of Agricultural & Resource Economics, University of Arizona Cooperative Extension, this 2017 economic study reveals the largest number ever in the University of Arizona’s history of documenting Arizona agriculture’s economic footprint.

In 2014, the agribusiness system directly contributed approximately $4.3 billion to value added. Value added measures the net incremental change in the value of a good from the last stage in production and, at the state level, is synonymous with the gross state product (GSP). The state’s top five agribusiness industries, in terms of their direct contribution to GSP, were agribusiness wholesale, agricultural support services (largely farm labor contracting from harvesting activities), dairy cattle and milk production, beef cattle ranching, and fluid milk manufacturing. Rounding out the top ten in value added contribution were vegetable and melon farming, bread and bakery manufacturing, other snack food manufacturing, dog and cat food manufacturing, and hay and all other crop farming (which in Arizona is largely alfalfa and other forage). Some highlights to the study follow.

A Few Facts from Their Research

  • Including direct as well as economic multiplier effects, the total contribution of Arizona’s agribusiness system was $23.3 billion in sales in 2014. 
  • The agribusiness system directly and indirectly supported more than 138,000 Arizona jobs, employing more than 162,000 unique workers. 
  • Arizona ranks among leading states in the production of lettuce, spinach, broccoli, cauliflower, cantaloupe, honeydew, durum wheat, and other commodities. 
  • Many Arizona counties rank in the top 1% of all U.S. counties in different measures of crop and livestock production.
  • The clear majority of Arizona farm operations are family-run operations and partnerships. These operations also account for the bulk of farm sales. 
  • The contribution of agriculture to Arizona’s economy extends beyond the farm gate. Arizona’s agribusiness system includes crop and livestock industries, suppliers of inputs and services for on-farm production, food and fiber processors, and specialized marketing and distribution industries.
  • Estimating the full contribution of agriculture to Arizona’s economy warrants an examination of this entire system.  

Economic Impact Analyst Team Highlights

·         20,005: Number of farms and ranches in Arizona

·         26 million: Acres of land managed by Arizona farms and ranches

·         75%: Share of Arizona’s agricultural sales from Maricopa, Pinal, and Yuma counties

·         75%: Share of state agricultural sales coming from the top 1% of operations (168 operations)

·         25%: Share of state agricultural sales coming from the top 10 operations

·         85%: Share of Arizona farms and ranches with sales of less than $25,000

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