Modifying 2014 Agriculture Sector Data

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dduval

• May 27, 2016 19:45

Hello, My colleague and I are working on making modifications to the 2014 agricultural sector data (farming and livestock) for Arizona (state-level data) to ensure that the IMPLAN data reflects what is reported by ERS. In comparing the two sources, we noticed a few differences and were hoping you might be able to clarify a few questions for us. Output Discrepancies between ERS and IMPLAN In some cases, the ERS cash receipts by commodity are not matching up to IMPLAN agricultural sectors. We understand that IMPLAN’s output value for each agricultural industry includes the production of the primary commodity as well as some other commodities (for example, support activities for ag and other amusement and recreation). So cash receipt figures may not be the same… but there are several instances in the 2014 data for Arizona where IMPLAN output figures are significantly lower than reported ERS cash receipts. A good example of this is fruit farming. ERS cash receipt data suggests that this sector has output of at least $148 million, whereas IMPLAN output figures are $88 million. Why would this be occurring? Contract Labor and Employee Compensation We were also wondering where expenses for contract labor are included in IMPLAN. Are they considered part of employee compensation (and, therefore, value added) in each individual agricultural sector? Or are they considered a production expense and mapped to IMPLAN sector 19- support activities for ag production? OPTI calculations Lastly, how is OPTI calculated for agricultural sectors? The reason we ask is that OPTI’s share of output at the state-level for all agricultural sectors (IMPLAN sectors 1-14) has increased significantly compared to 2011 data. In 2011, OPTI was 17% of output and in 2014 it is 40% of output. We think that much of this is likely due to price changes in the beef cattle industry, but we aren’t quite sure. Furthermore, if this is case, we’re not sure that the profits should be categorized as OPTI. According to the 2012 Census of Agriculture, even though corporations account for a large percent of sales in the beef cattle industry, more than 90% of them are family-owned and are likely to be local. Thanks so much for your help.

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  IMPLAN Support

  • May 31, 2016 19:08

  Hi Dari! Thank you for your forum post. 1. Output The raw ERS data available at the time of the creation of the 2014 data lists output of $105 million for Fruits and Nuts, nearly half of which is Pecans (please see attached). In IMPLAN, nuts are a distinct sector from fruits, so the fruits value can be expected to be lower than $105 million given these raw data. It appears that the ERS has revised their lemons number upward significantly from their first estimate. In any case, we rely more heavily on NASS data, where available, because they attempt to report value of production as opposed to value of sales, and therefore capture on-farm consumption and changes in inventory. The 2014 NASS value for citrus at the time we used it was $55.6 million, very close to the initial ERS value. We suspect that NASS has also revised this figure upward since then. You can edit your IMPLAN model to reflect the revised number if you would like, but keep in mind that the trade flow values are fixed and will not adjust to the new output value (i.e., RPCs will change because supplies and demands have changed but trade flow have not changed). 2. Contract Labor For every sector other than the new construction sectors, contract labor will be a part of the spending pattern. In the case of agriculture and forestry, these contractors show up in sector 19, as you've stated. 3. OPI a. Even if the farm is local, if it is a corporation rather than a proprietorship or partnership, the profits will still show up as OPI rather than PI, with the assumption that those profits are more likely to be saved or spent on investments (on the farm or elsewhere) as opposed to annual operations. You can change this assumption in your model or your event by increasing PI accordingly, thereby reducing OPI. b. Regarding differences from 2011, please be aware that both a new BEA Benchmark (at present our only source of sector-specific OPI and TOPI data for the farm sectors) and a new Census of Agriculture were released and incorporated into the 2013 (and later) IMPLAN data sets. We also began incorporating NASS data as an augment to the ERS data at this time. So a somewhat larger jump in numbers is to be expected. c. Regarding our sources, please see the attached document. Please note that starting with the 2015 IMPLAN data we will be incorporating some ARMS data as a more current source than the BEA Benchmark for sector-specific farm OPI and TOPI. [attachment=701]h9a6b286.pdf[/attachment] [attachment=702]h285e2a6.xlsx[/attachment] Thanks!

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