UF researcher: Florida agriculture took economic hit in 2008, but remains strong

March 2, 2010

GAINESVILLE, Fla. — Florida agriculture survived the first part of the economic downturn fairly well but decreased demand for exports has been a concern, a University of Florida expert says in an annual report.

In the report that looks at 2008 economic data, agriculture and related industries contributed $76.5 billion to the state’s economy, said Alan Hodges, an extension scientist with UF’s Institute of Food and Agricultural Sciences.

“Every single sector of the economy has been affected in the recession, there’s just no getting away from that. And agriculture is no exception,” Hodges said. “However, it looks like agriculture has taken less of a hit than some other segments.”

Hodges has been involved in the annual report’s production since 2000.

Economic data compiled by the federal government lags about two years behind, and 2008 is the most recent year for which data available, he said. Economists peg December 2007 as the start of the country’s recession.

The report tracks more than 90 industry sectors – such as farming, ranching, pest control, fertilizer manufacturing, mining, food and beverage manufacturing, paper and lumber production, golf courses, recreational fishing and commercial hunting and trapping.

Agriculture’s $76.5 billion value-added impact from the 2008 report is down from the 2007 figure of $93 billion — but that’s similar to the economic hit suffered by other industries during the same time period, he said.

The value-added impact includes what economists call multiplier effects, which Hodges explains like this: A farmer buys things like seeds, fertilizer, machinery and equipment from suppliers. That spending creates revenue for suppliers and their employees, who spend their wages on things like food, housing and transportation.

The researchers rely on a model called IMPLAN that tracks a vast array of economic transactions between business sectors.

Agriculture’s value-added impact is down, and Hodges said he believes lower demand for the state’s agricultural exports is to blame. For example, citrus fruit is exported from Florida to Europe and Asia, and those exports were down by nearly 20 percent in 2008.

Still, agriculture and natural resource industries accounted in 2008 for about 8 percent of Florida’s gross state product.

Accounting for nearly 1.3 million full- and part-time jobs, or 14 percent of the state’s total employment in 2008, agriculture ranks second in jobs among the state’s economic sectors, though Hodges notes that UF’s report reclassified some jobs from the North American Industry Classification System’s designations.

Among industry groups, average annual growth in value-added impacts from 2001 through 2007 was highest for mining (19 percent) and crop, livestock, forestry and fishery production (10 percent), followed by food and kindred products distribution (5 percent) and forest product manufacturing (3 percent).

For more data, please see the full report: http://edis.ifas.ufl.edu/fe829.