Study: Arizona veggies grow $2 billion for economy

November 8, 2017

 

A study commissioned by a produce industry association has found that Arizona's leafy green vegetable industry, dominated by Yuma County growers, generates about $2 billion of economic impact every year, twice the amount most often used to estimate its contribution.

 

The results, based on 2015 data, come as more of a surprise to some local industry figures than others.

"It was kind of eye-opening," said Jerry Muldoon, chairman of the Arizona Leafy Greens Food Safety Committee board, the association which funded the study.

 

"It was more than we'd ever estimated before, just because it was just the direct sales we were looking at. But now, taking all the other factors, the jobs and on and on and on, it's a pretty huge number."

 

On the other hand Bruce Gwynn, executive director of the Yuma Fresh Vegetable Association, said "a lot of us were thinking it was more like $2 billion or $3 billion, but we didn't have anything to back that up."

 

Ashley Kerna Bickel, an economic impact analyst at the University of Arizona's Department of Agriculture and Resource Economics in Tucson, is the lead researcher on the study, which took about a year to complete.

She said she worked to go beyond on-farm activity and capture the revenue and jobs created by coolers, processors, transporters and other associated businesses throughout Arizona, which had been largely missed until now.

 

"Part of the reason they wanted the study is they had informal estimates, or kind of an idea of what the industry's contribution to the state's economy was, but there really are no reliable and credible numbers out there," she said.

So she started with the commodity cash receipts for the three largest leafy green crops, which are lettuce (including romaine, head and leaf), spinach and cabbage. Then all the post-harvest businesses of cooling, cutting, washing, packing, processing, storage and shipping were added in, based on estimated acreage and the spending required to produce and transport those crops.

 

The analysis used statewide numbers, not just Yuma County's, and while she couldn't get a breakdown of sales by county from the Arizona Department of Agriculture, there were a couple of figures indicating how the large agribusinesses here dominate the total output.

 

Yuma County has 96.7 percent of the state's acreage of harvested lettuce, but only 30 percent of the number of operations. "It kind of suggests there's a lot of small-scale producers in the rest of the state, 70 percent are elsewhere in the state, but they're not producing a lot," Bickel said.

 

So the southwest corner does make up most of Arizona's leafy greens industry, but the state and Yuma County do rank second to California and Monterey County (Salinas) for annual production. From late November to the middle of March, Arizona produces 82 percent of the nation's lettuce, and in 2015 went over 90 percent for one period.

 

Average monthly shipments from Arizona total 1 billion pounds in the winter, and those from California during the rest of the year also hover around a billion pounds. "Within these two regions you have a remarkably stable supply for the nation," Bickel said.

 

Direct revenue from on-farm sales from Arizona leafy green producers totaled $931 million during the study period, with the rest of the impact to the state economy coming from the associated industries, plus the money employees spend in seemingly unrelated sectors like health care and finance

 

"They're not agricultural industries, but they wouldn't be operating at that high level of economic activity if it were not for the leafy green industry demanding those inputs," she said.

 

Muldoon said the new data should be helpful in showing state leaders just how integral farming is to the state's economy and help discourage any funding cuts affecting the Department of Agriculture or otherwise hurting growers.

For example, the food safety committee has an agreement with the U.S. Department of Agriculture to ensure the industry meets minimum food safety standards, through audits. The growers pay a fraction of a cent per box of produce to pay for the association's costs.

 

This money is kept at the state level, and legally could be "swept" by the Legislature during the budget process, he said.

 

"We're diligent in making sure, you have to have enough money for three years to cover your costs. You gotta have that, so we make sure we don't have hardly anything above that," Muldoon said.

 

 

 

 

 

 

 

 

 

 

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