Helping Industry Members Help Themselves

We’ve been hearing a lot about the Economic Stimulus Plan and various bailouts recently, which lend new fuel to the age-old debate of helping yourself versus asking the government to help you. Lucky for us, our industry was built on hard work and entrepreneurship — a labor of love if you will — to bring high-quality, healthy products to consumers. Could any of you imagine our industry lining up on Capitol Hill demanding we need a handout? And where should we rank compared to those industries that already have gone to the trough, in terms of our economic impact?

Well, now we have an answer to that latter question. Produce Marketing Association’s (PMA) recently released economic impact study gives us — for the first time ever — a good sense of our place on the national economic scale. We now know we contribute $554 billion annually in total economic impact and the 2.7 percent of all jobs within the United States. The results of this unprecedented industry-wide study will help all of us on a wide range of initiatives, from federal policymaking to individual business pursuits. From field to fork, our industry now has some accredited, hard numbers to back us up both on a macro and micro level.

The study demonstrates the role our industry plays in stimulating the U.S. economy. From an economic perspective, the study found we are a significant income-generator, providing $36 billion in direct wages and $71.8 billion of total wages each year. These figures account for 1.7 million direct, full-time equivalent (FTE) jobs, an additional 1 million ripple-effect jobs and 1.9 percent of all U.S. employment. Our total impact is 4.23 percent of U.S. Gross Domestic Product (GDP). Within the agricultural sector, produce and floral production is one-third of total U.S. animal and crop production.

The numbers also reflect the significant and real value our industry adds to our products. The study reports $1 of production value ultimately generates $16.75 of total economic value, as produce and floral products move up the supply chain. A general economic rule of thumb is that as added value approaches 20 percent, it shows the industry is doing something valuable with the raw material, rather than marking it up for handling.

These big numbers will help PMA and our partner organizations in our mission to advance the industry’s interests at the federal level, while the granular detail also provides tools and information for our members to help themselves at the regional and local level. As opposed to lobbying for a bailout package, our industry can use this information to support self-help efforts, by providing backup for loan applications, grant proposals, and business development or expansion plans. Additionally, the employment information at the local level can help maintain existing jobs, develop future jobs and prevent further job loss.

The study shows how the industry touches every state and congressional district in the country. While California, not surprisingly, is a leader in many areas of the study, the noted impact of other states and districts not traditionally considered to be major produce players may be a new revelation. Florida, Texas, New York and Pennsylvania round out the top five states, each accounting for more than 100,000 direct and ripple-effect employment, or total impact employment, while 15 states exceed 50,000 total impact employment. Every congressional district benefits from at least 1,500 direct fresh produce and mass-market floral industry jobs, and at least 2,200 total jobs with more than half of congressional districts attaining an impact level of $1 billion or more.

The credibility of the study’s non-profit research firm, Battelle, and the standards used to develop the study give us high confidence in the data’s value. A team of economic researchers and industry experts alike tested the study model, and results were validated against other established data. Its field-to-fork perspective incorporates all levels of production, distribution, marketing, and foodservice. This inclusive modeling will allow all members of the industry to benefit from this study.

The beauty of this study is that it shows an industry rich with economic value and success. Left to our own invention, our industry has grown nationally while still providing a crucial comprehensive local component. In an increasingly analytical business environment, the produce industry now has real-world numbers to use with federal, state and local government, banks and even zoning boards to validate that we must be highly-valued economic contributors and that we’re not waiting for the next bailout.