Retail Gross Absorption and Local Food

I'm working on a local food question. In this effort I want to estimate the total of consumption of the value of agricultural food production (an aggregate industry of food agriculture sectors), and the value of consumption of food manufacturing (an aggregate industry of NAICS 311), where consumption sectors include institutions and most food service sectors (NAICS 61, 62, 71, 72 and some others). I want to be able to trace the value of production from farm to household using the commodity balance sheets for agriculture and NAICS 311. I conceive that unprocessed foods (ag) can be consumed unprocessed through direct sells to households, through retail channels or through food service. I also conceive that processed foods, channeled through NAICS 311, can be consumed through retail or food services. Ignoring processed foods for now, how do I interpret the regional inputs for the food agriculture aggregate industry? For example, food services and drinking establishments (413) on the Industry Demand tab of the commodity Balance Sheets shows $3,000,000 in regional inputs. I understand that to be that $3 million restaurants etc. buy $3 million in unprocessed agricultural products in the process of providing services. However, retail entries are extremely low in comparison. How do I interpret the extremely low grocery store values (both gross and regional inputs)? If it is because only margins are reported, how do I account for home consumption from this segment? Any thoughts will be greatly appreciated. Steve
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  • Hi Steve, Here are a couple of thoughts: You are correct - retail sectors' Output levels represent their retail Margin only - not the value of the items sold at the retail outlet. In accordance with this, the input purchase values represent the inputs needed to run the retail store (rent the space, keep the lights on, have a working restroom, keep the store clean, etc.). You can back out a dollar figure for Household spending at the retail store by knowing the margin associated with grocery store purchases. In 2011, that margin was 28.1% (you can see this by setting up an Event for sector 324, accepting the default ("Gross Retail Sales"), then clicking the "Preview" button in the upper right hand corner. If you've found through IMPLAN that total household demand for the retail grocery store sector (gross margin) is $20 million, then you know that total amount that households spent at the grocery store (gross retail sales) is: 0.281 * X = $20,000,000 X = $71,174,377 Keep in mind that the if the $3 million that you are referring to represents restaurants spending on inputs is not all for agricultural products - they also spend on electricity, water, renting their space, advertising, etc. Here are a few forum discussions that may be helpful: As regards the balance sheets, you are correct here as well. If you have the Balance Sheets set to reflect View By: Commodity Balance sheet and you have selected the drop down menu to view Sector 3111. Then the industries listed and the values listed for their purchases will represent the amount that industry spends on those types of production ( i.e. if Sector 413 is listed here these show the raw foods that 413 buys for its production like fresh tomatoes, onions and lettuce for hamburgers). You would also then want to look at 3311 which would show you the processed foods they buy (the hamburger and the buns, ketchup, mustard, etc). Since the commodity balance sheet is showing you just what is purchased for the production of that Sector's Output and as described above the Output of the Grocery Sector is just the operational costs of the store, the value of 3111 or 3311 will be very small because it represents the amount of food production that are consumed in the operations of the store, not the food they sell. Please let us know if this addresses your concern or if you have any additional questions.
  • Thanks, Let me mull this over a bit. Steve

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