• Topics: Food and Resource Economics  |   |  Mulkey, David  |  Rahmani, Mohammad  |  Economic Value of Agriculture  | Florida Industries 

Economic Contributions of Florida Agriculture, Natural Resources, Food and Kindred Product Manufacturing and Distribution, and Service Industries in 2006¹

Introduction

The agricultural and natural resource industries in Florida that produce food, fiber, and mineral commodities are linked to a broad range of other economic sectors for food and kindred products manufacturing, wholesale and retail distribution, input suppliers, support services, and nature-based recreation. In addition to farms, forests, and fisheries, this includes activities such as mining, fertilizer manufacturing, sawmills, fruit and vegetable processing, landscaping, food stores, restaurants, building material and garden stores, pest control, golf courses, and recreational fishing. This report provides estimates of these industries' contribution to the economy of Florida in 2006, updating a previous study for 2004 (Hodges, Rahmani, and Mulkey, 2006), and supercedes a recent report by the same authors (January 2008). Here the scope of analysis is expanded to include food and kindred product distribution activities, such as wholesale food distributors, retail food stores, restaurants/other food service establishments, and building material/garden stores.

Methods

Data for this analysis were obtained from the IMPLAN Professional database for Florida counties for 2001-2004 and 2006 (Minnesota IMPLAN Group). These data were not available for 2005. IMPLAN data were derived from the National Income and Product Accounts and employment data for the United States (U.S. Department of Commerce). More than 110 individual industry sectors in Florida were identified as related to agriculture and natural resource commodity production, input supply and supporting services, food and kindred product manufacturing, food distribution, and nature-based recreation. A list of industry groups and individual sectors included in the analysis is shown in Table 1. Economic contributions were also evaluated for several recognizable industry commodity groups that have linkages between production and processing/manufacturing sectors, including environmental horticulture (nursery and greenhouse production; landscape services); fruit and vegetable farms and processing; forestry, logging, and forest product manufacturing; sugarcane and refined sugar manufacturing; livestock and animal products manufacturing; and fishing and seafood products.

The total regional economic impacts for each sector were estimated using regional input-output multipliers developed from IMPLAN. Multipliers capture the indirect and induced effects of sales outside Florida (exports) that bring new money into the region and generate further economic activity as these dollars circulate through the economy (Miller and Blair, 1985). Indirect effects represent the economic activity generated by businesses that furnish inputs to the agricultural, food manufacturing and natural resource industries, while induced effects represent the impacts of industry employee household spending. The total economic impacts are the sum of direct, indirect, and induced effects. A brief glossary of economic impact analysis terminology is provided in the Appendix.

Regional input-output models were developed with IMPLAN for the state of Florida for nine economic regions and for all 67 counties in the state. The nine regions were defined based on metropolitan areas, employee commuting patterns, and other economic data from the 2000 Census (Johnson and Kort, 2004). It should be noted that some Georgia counties included in the north Florida regions were not evaluated in this analysis, and that there were slight discrepancies in the results of the analysis at the state, region, and county levels due to differences in trade flows and accounting adjustments. The models were constructed with default parameters and trade flow assumptions. Adjustments made to the data were for exports by the Forestry, Fruit farming, Vegetable and melon farming, and Greenhouse and nursery sectors, based on information from primary surveys for previous studies (Hodges, et al., 2002, 2005, 2006). Values for some activities were estimated as a share of their parent sector based on past studies and other economic data: landscape services and pest control services (70% and 10%, respectively, of services to buildings), wholesale food distribution (27.5% of wholesale trade), and golf courses and recreational fishing (30% and 10%, respectively, of amusement and recreation services).

Values for 2001 through 2006 were expressed in 2007 dollars using the mid-year (July) indices for the Gross Domestic Product Implicit Price Deflator (U.S. Dept. of Commerce), which is a broad measure that accounts for effects of price changes in the measurement of GDP.

Results

Total Statewide Impacts

Total industry output or sales of the agriculture, natural resources, and food-related industries in Florida in 2006 were about $137 billion (Bn) in 2007 dollars (Table 1, Figure 1). Total exports of goods and services outside the state and sales to Florida visitors amounted to $46 Bn. As a result of the indirect and induced multipler effects from these exports, the total output impacts were estimated at nearly $200 Bn. Direct employment in the industry was nearly 1.5 million full-time and part-time jobs, and total employment impacts were estimated at almost 2 million jobs (Table 1). The direct value added contribution of these industries was $66 Bn, and total value added impacts from multiplier effects were $102 Bn. Value added is a broad measure of economic contribution that is comparable to the Gross Domestic Product at the national level, and represents the net income created by an industry, or the difference between industry revenues and input purchases from other sectors; it includes personal and business net income, and capital consumption. The labor (earned) income impact of employee wages and benefits and business proprietor income was estimated to be $65 Bn. Indirect business tax impacts to local, state, and federal governments were $11.4 Bn.

Figure 1. 

Structure of economic activity in Florida agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in 2006. Source: IMPLAN Professional Data.

Impacts by Industry Groups and Sectors

Economic contributions by major industry groups and specific industry sectors in Florida in 2006 are given in Table 1. The largest valued added impacts in the industry were from Food and Kindred Products Distribution ($53.2 Bn), followed by Food and Kindred Products Manufacturing ($13.7 Bn), Agricultural Inputs and Services ($10.4 Bn), Crop, Livestock, Forestry, and Fisheries Production ($10.3 Bn), Forest Product Manufacturing ($6.3 Bn), Nature-based Recreation ($6.0 Bn), and Mining ($1.9 Bn) (Figure 2). In terms of employment impacts, the highest impacts occurred for Food and Kindred Products Distribution (1,160,790 jobs), followed by Crop, Livestock, Forestry, and Fisheries Production (238,237 jobs), Agricultural Inputs and Services (234,575), Food and Kindred Products Manufacturing (165,8499), Nature-based Recreation (96,535 jobs), Forest Product Manufacturing (77,345 jobs), and Mining (21,737 jobs) (Figure 3).

Figure 2. 

Output and value added impacts of agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in 2006. Source: IMPLAN Professional Data.

Figure 3. 

Employment impacts of agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in Florida in 2006. Source: IMPLAN Professional Data.

Among agricultural commodity groups with market chain linkages between producers, manufacturers, and service sectors, the largest value-added impacts were for Environmental Horticulture ($7.7 Bn), which includes nursery and greenhouse production and landscape services, followed by Forestry and Forest Products ($7.0 Bn), Fruit and Vegetable Farming and Processing ($6.5 Bn), Tobacco Farming and Manufacturing ($2.9 Bn), Sugarcane Farming and Refined Sugar Manufacturing ($1.4 Bn), Livestock and Dairy Farming and Animal Products Manufacturing ($1.1 Bn), and Fishing and Seafood Products ($220 Mn) (Figure 4). In terms of employment impacts, the largest industry groups were Environmental Horticulture (172,395 jobs), Fruit and Vegetable Farming and Processing (93,389 jobs), and Forestry and Forest Products Manufacturing (89,012 jobs) (Figure 5).

Figure 4. 

Output and value added impacts of food and fiber commodity groups in Florida in 2006. Source: IMPLAN Professional Data.

Figure 5. 

Employment impacts of food and fiber commodity groups in Florida in 2006. Source: IMPLAN Professional Data.

Individual industry sectors that generated the largest value added impacts were Food Services (restaurants and drinking places, $21.4 Bn), Wholesale Trade in Food and Kindred Products ($17.4 Bn), Food and Beverage Stores ($7.6 Bn), Building Material and Garden Stores ($6.8 Bn), Landscape Services ($5.45 Bn), Golf Courses ($4.4 Bn), Soft Drink and Ice Manufacturing ($3.51 Bn), Other Tobacco Product Manufacturing ($2.71 Bn), Greenhouse and Nursery Production ($2.23 Bn), Vegetable and Melon Farming ($2.37 Bn), Agriculture and Forestry Support Activities ($2.30 Bn), Phosphatic Fertilizer Manufacturing ($2.20 Bn), Fruit and Vegetable Canning and Drying ($1.70 Bn), Paper and Paperboard Mills ($1.62 Bn), Recreational Fishing ($1.5 Bn), Veterinary Services ($1.05 Bn), and Engineered Wood and Truss Manufacturing ($1.03 Bn) (Table 1). In terms of employment impacts, the largest sectors were Food Services (661,961 jobs), Food Stores (209,344 jobs), Food Wholesalers (178,153 jobs), Building Material/Garden Stores (111,332 jobs), Landscape Services (144,380 jobs), Agriculture/Forestry Support Services (91,772 jobs), Golf Courses (70,723 jobs), Soft Drink/Ice Manufacturing (42,934 jobs), Veterinary Services (31,651 jobs), Fruit Farming (31,050 jobs), Vegetable/Melon Farming (30,359 jobs), Phosphatic Fertilizer Manufacturing (28,399 jobs), and Greenhouse/Nursery Production (28,015 jobs).

Impacts in Florida Regions and Counties

Regional impacts of agricultural, food manufacturing, and natural resource industries were evaluated for nine economic regions of Florida (Figure 6). Total value added impacts in these regions, ranked in descending order, were Miami-Ft. Lauderdale ($32.3 Bn), Orlando ($25.4 Bn), Tampa-St. Petersburg-Clearwater ($15.8 Bn), Jacksonville ($11.0 Bn), Sarasota-Bradenton ($9.6 Bn), Pensacola ($2.6 Bn), Gainesville ($2.2 Bn), Tallahassee ($1.9 Bn), and Panama City ($1.1 Bn) (Table 2, Figure 7). Employment impacts followed in this same order among regions (Figure 8).

Figure 6. 

Economic regions in Florida in 2006. Source: U.S. Department of Commerce.

Figure 7. 

Output and value added impacts in Florida region by agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in 2006. Source: IMPLAN Professional Data.

Figure 8. 

Employment impacts in Florida regions by agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in 2006. Source: IMPLAN Professional Data.

Industry economic impacts were also evaluated for all 67 counties in Florida as shown in Table 3. The largest counties in terms of value added impacts were Miami-Dade ($12.3 Bn), Hillsborough ($10.5 Bn), and Orange ($10.2 Bn), followed by a second tier of counties including Duval ($8.0 Bn), Broward ($7.9 Bn), and Palm Beach ($7.2 Bn) (Figure 9). Other counties with value added impacts exceeding $2 billion included Polk ($4.9 Bn), Pinellas ($4.0 Bn), Lee ($2.7 Bn), Collier ($2.4 Bn), Manatee ($2.1 Bn), and Seminole ($2.0 Bn). The first six counties all had employment impacts of at least 150,000 jobs, while the next six counties had employment impacts of at least 40,000 jobs.

Figure 9. 

Value added impacts in the twenty largest Florida counties by agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries in 2006. Source: IMPLAN Professional Data.

Impact Trends from 2001 to 2006

In addition to the economic contributions in the most recent year, it is important to understand how these values have changed over time. Trends in economic impacts of these industries between 2001 and 2006 are shown in Table 4 and Figures 10-11. Note that all values were adjusted for inflation to express in constant 2007 dollars. Total value added impacts grew from $85 Bn in 2001 to $102 Bn in 2006, representing an average annual growth of 3.9 percent (Figure 10). Total output impacts grew by an average of 5.5 percent annually, and total employment impacts increased by 1.2 percent annually. For the recent period of 2004-06, however, there was a more modest average annual growth in value added impacts (0.7%) and output impacts (0.5%), while employment impacts actually declined slightly (-0.5%). Note that these trends may reflect changes in the structure of the Florida economy as well as changes in industry activity and commodity prices.

Figure 10. 

Trends in economic impacts during 2001-2006 for Florida agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries. Source: IMPLAN Professional Data.

Among industry groups, average annual growth in value added impacts during the period 2001-06 was highest for Forest Products Manufacturing (12.9%) and Agricultural Inputs and Services (12.5%), followed by Food and Kindred Products Distribution (7.9%); Food and Kindred Products Manufacturing (6.8%); Mining (5.1%); Crop, Livestock, Forestry, and Fisheries Production (1.3% each); and Nature-based Recreation (0.4%) (Figure 11).

Figure 11. 

Trends in value added impacts during 2001-2006 for industry groups of Florida agriculture, natural resources, food and kindred product manufacturing and distribution, and service industries. Source: IMPLAN Professional Data (data unavailable for 2005).

Among commodity groups, Environmental Horticulture sustained a high average growth rate in value added impacts throughout this period (4.6%), and during 2004-06 (8.4%). Very strong overall growth occurred for Tobacco Farming and Processing (26.5%); however, this group shrank (-4.1%) from 2004-06. A similar pattern is evident for Forestry and Forest Products Manufacturing, with good overall growth (6.5%), but then slowing (2.2%) during the latter period. Other commodity groups that experienced a decline during 2004-06 were Livestock, Dairy Farming, and Animal Products Manufacturing (-10%); Sugarcane Farming, Refined Sugar, and Confections (-11.7%); and Fishing and Seafood Products (-22.6%).

Among individual industry sectors with a significant change between 2001 and 2006, the highest increase in value added impacts over the recent period were for Landscape Services ($924 Mn), and Soft Drink/Ice Manufacturing ($675 Mn). Other tobacco product manufacturing had substantial growth ($1.78 Bn, or 25% average annually) during 2001-04, but then decreased (-$297 Mn,or -5% annually) during 2004-06. Veterinary services, Greenhouse and nursery products, and Forest Nurseries/Timber recorded significant annual growth of 16 percent, 5 percent, and 4 percent, respectively, during 2004-2006. Phosphatic fertilizer manufacturing had the highest decrease of $706 Mn (-12% annually) during the recent period. Other sectors with significant decreases in value added impacts during 2004-2006 period were Fruit/Vegetable Canning/Drying (-$452 Mn, -10%), Agricultural/Forestry Support Activities (-$289 Mn, -6%), Sugar Refining (-$265 Mn, -11%), and Frozen Foods (-$217 Mn, -9%).

Share of Gross State Product

The relative importance of the agriculture, natural resources, food, and kindred product manufacturing, distribution, and nature-based recreation industries in Florida can be gauged by their share of overall economic activity in the state. The Gross State Product in 2006, which is equivalent to the sum of value added for all industries in the state, was $704 Bn in 2007 dollars, and the total employment in the state was 10.3 million jobs. The direct value added contributed by agriculture, natural resource, and related food industries ($65.6 Bn) represented 9.3 percent of Florida's Gross State Product (Figure 12), ranking third among all major industry groups. Direct employment in these industries represented 14.2 percent of all jobs in the state, ranking second among major industry groups (Figure 13). It is important to note that in this analysis, some industry sectors were reclassified from their original designation under the North American Industry Classification System (NAICS) to be included as part of the broadly defined agriculture and related industries.

Figure 12. 

Contribution to Gross State Product (GSP) of Florida by major industry groups in 2006. Source: IMPLAN Professional Data.

Figure 13. 

Direct employment by major industry groups in Florida in 2006. Source: IMPLAN Professional Data.

Conclusions

This analysis showed that agriculture and natural resources are very diverse industries, with linkages to food and kindred product manufacturing, distribution, and related service activities. These industries collectively have a significant economic impact on the Florida economy, accounting for about 9 percent of Gross State Product and 14 percent of total employment, which is ranked second among major industry groups These industries are present throughout the state, with major activity in urbanized metro areas as well as rural counties, where it may be relatively more important as a share of total economic activity. The industries have grown substantially since 2001, with average annual growth rates roughly matching the overall Florida economy (4%), however, growth significantly slowed during the recent 2004-06 period. Finally, in addition to these economic impacts, agriculture and related industries managed nearly 24 million acres (36,000 square miles) in forests, crops, and pasture land uses, or about two-thirds of the land area of the state. These lands provide valuable non-marketed environmental services for water supply, water quality improvement, pollution abatement, erosion control and shoreline protection, carbon sequestration and climate stabilization, wildlife habitat, and open space for community buffers and outdoor recreation.

References

Hodges, Alan W., and John J. Haydu. 2006. Economic Impacts of the Florida Environmental Horticulture Industry in 2005. Electronic Data Information Source (EDIS) FE675. Food and Resource Economics Department, University of Florida, Gainesville, FL. Available online at http://edis.ifas.ufl.edu/FE675.

Hodges, Alan W., and John J. Haydu. 2002. Economic Impacts of the Florida Golf Course Industry. FRE Economic Information Report EIR-02-04. Food and Resource Economics Department, University of Florida, Gainesville, FL (June). Executive Summary is available at http://edis.ifas.ufl.edu/pdffiles/FE/FE34400.pdf.

Hodges, Alan W., W. David Mulkey, Janaki R. Alavalapati, and Douglas R. Carter. 2006. Economic Impacts of the Forest Industry in Florida, 2003. Electronic Data Information Source (EDIS) FE538. Food and Resource Economics Department, University of Florida, Gainesville, FL. Available online at http://edis.ifas.ufl.edu/FE538.

Hodges, Alan, Mohammad Rahmani, and W. David Mulkey. 2005. Economic Impacts of the Florida Citrus Industry in 2003-04. Electronic Data Information Source (EDIS) FE633. Food and Resource Economics Department, University of Florida, Gainesville, FL. Available online at http://edis.ifas.ufl.edu/FE633.

Hodges, Alan W., Mohamamad Rahmani, and W. David Mulkey. 2006. Economic Impacts of Agriculture, Food and Natural Resource Industries in Florida in 2004. Electronic Data Information Source (EDIS) FE680, Food and Resource Economics Department, University of Florida, Gainesville, FL. Available online at http://edis.ifas.ufl.edu/FE680.

Johnson, K., and J. Kort. 2004. Redefinition of the BEA Economic Areas (Bureau of Economic Analysis, U.S. Department of Commerce). Survey of Current Business 84 (11): 68-75. Available online at http://www.bea.gov/scb/pdf/2004/11november/1104Econ-Areas.pdf.

Miller, R.E., and P.D. Blair. 1985. Input-Output Analysis: Foundations and Extensions. Englewood Cliffs, NJ: Prentice-Hall Publishing Company.

Minnesota IMPLAN Group, Inc. IMPLAN System (data and software), 1725 Tower Drive West, Suite 140, Stillwater, MN 55082. Available online at http://www.implan.com.

U.S. Department of Commerce, Bureau of Economic Analysis. Gross domestic product implicit price deflator, 1970-2007, quarterly. Available online at http://research.stlouisfed.org/fred/data/gdp/gdpdef.

Tables

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Millie Ferrer-Chancy, Interim Dean.

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