By Craig W. Anderson
Farmers, politicians, rural residents and Farm Bureau understand that the value of San Joaquin County’s agriculture extends far beyond just the worth of the crops themselves. The Agricultural Commissioner’s 2018 Crop Report is the latest crop report available and it puts the county’s 2018 gross agricultural value at $2.6 billion, a 2.62 percent increase over the 2017 value of $2.5 billion.
Good numbers to be sure but a new report, “Economic Contributions of San Joaquin County Agriculture” by Agricultural Impact Associates dug deeper into ag’s 2018 numbers and determined that the actual value of agriculture and its various directly associated business sectors was actually a hefty $5.732 billion.
Agriculture accounted for 7.1 percent of the county’s total economic production when production, processing, multiplier effects and employment are factored into the calculations.
Ag Commissioner explains
Nicknamed Crop Report Plus, Agricultural Commissioner Tim Pelican explained the new methodology and its results to the County Board of Supervisors during a regular meeting.
“This study goes beyond our annual agricultural crop report,” Pelican said. “It’s a new way of looking at the importance of what farmers and ranchers add to San Joaquin County’s economy. It captures not just the direct effects of farm production but also local food processing, employment and their ripple effects.”
He pointed out the importance of improved understanding of “how and where agriculture contributes to our economy and local employment” during the uncertain economic times brought by the pandemic.
“We had to pay for this,” Pelican told Farm Bureau News. “There is definitely value in doing it periodically.”
He said he gets “questions all the time regarding what the extended value of ag is. The science behind this report is solid and when it’s time to go get ag funding it’s good to have these figures showing the extent of agriculture’s economic impact.”
Annual crop report 85 years old
The annual crop report that’s been created for the last 85 years can only be changed by law and “that’s why we had to go outside for this new ‘Economic Contributions’ report,” said Pelican. “It was a lot of work on our part; it was a process with Ag Impact Associates. Due to the importance of the report we wanted to do a live presentation to the Board of Supervisors.”
2019 crop report delayed
He said the 2019 crop report has been delayed due to the COVID-19 situation which required separating staff and changing how they worked in preparing the report. “Then cherry harvest came and that required our attention,” Pelican said. The 2019 crop report should be released in mid-August.
Crop Report Plus astounds
Crop Report Plus revealed agricultures total economic contribution included 29,986 direct employees – nearly one of every 11 jobs in the county. “Adding multiplier effects,” Pelican said, “brought total employment to 33,737 jobs.”
The information in the new report is startling. By including other factors agriculture’s direct economic output was $3.979 billion with multiplier effects adding another $1.753 billion. Put another way, ag pumped $15.7 million per day, $654,167 per hour and $10,903 per minute into the county’s economy in 2018. Agriculture represented 7.1 percent of the county’s total economic output of $555.70 billion, or one out of every $14.
Vogel surprisingly un-surprised
The numbers, from the Agricultural Impact Associates, a firm that analyzes the economics of ag in California, are not surprising to SJFB First Vice President and farmer Ken Vogel. “In ag, farmers, ranchers, packers and processors have known about this value for years. To stretch out and find all the positive effects of agriculture and that ag in the valley is huge…I’m happy the Agriculture Commissioner’s doing this.”
This will, he said, educate people by showing them the real value of ag, including the politician who told Vogel: “Agriculture ruins our water and land and environment. Why do we need it?”
Jeff Langholz, co-author of the report and a senior researcher at Agricultural Impact Associates, said California’s requirement that every county must submit a report on its ag value every year has resulted in thousands of reports since the 1920s. “But we’ve some new economic tools that allows us to fulfill that mandate better and we can report the value of agriculture beyond what’s in the annual crop report.”
He said the new methodology allows reporting not only the values of walnuts, almonds and other crops and livestock production but “also locally sourced value-added food processing, the multiplier effect of agriculture and employment.”
The report describes multiplier effects as “economic ripples that farm production creates in the local economy” that take two forms: indirect effects and induced effects. The first consists of business-to-business supplier purchases, other inputs and grower-created indirect effects from buying farm equipment and other materials and services.
The second type, induced effects, consists of consumption spending by owners and employees of agricultural businesses and their suppliers.
“We’re often forgotten, but at least three times a day, people need ag for the food on their tables,” said David Strecker, SJFB President. “Ag allows communities and counties to thrive and its impact on the overall economy is significant.”
He also said, “It’s good to have written, printed information with the Ag Commissioner’s seal on it gives it importance and legitimacy. It supports Farm Bureau getting agriculture’s message out there with detailed accuracy.”
Other counties are taking the same approach of more detailed and impactful examinations of ag’s positive impact on their economies; it’s a growing trend in California.
According to Langholz, the county’s diversification index is 0.63 which is “exceptionally high” on a scale of 0 to 1, meaning that the county’s agriculture is diverse and strong enough to withstand economic downturns such as price drops, disease, new regulations and competitors or price spikes.
“This report and its content is a huge step in the right direction,” said Bruce Blodgett, SJFB Executive Director. “The report is an improvement that shows a more complete value of ag.”
Blodgett noted that value-added leaves the county when products leave and that a revival of UC’s Measure of California Agriculture would be a good idea, “since it’s been about 20 years since it last appeared.” He also felt the net income of farms needs to be included.
“It would be very interesting to have the 2020 be a Crop Report Plus year as in many ways it’s been a year of chaos for ag,” he said. “But overall, the Crop Report Plus is filled with good information and facts and I’m really happy the county did this.”
SJFB Second Vice President Jake Samuel sat in on the presentation and “I didn’t know about the report until it was released. I was impressed and blown away by the statistics, the number of workers associated with ag and the dollars generated. This is hard, statistical evidence of how valuable ag is to the county.”
Copies of the report are available at the agricultural commissioner’s office.