Agriculture means big business in Weld and Larimer counties.
Weld County is the fourth-largest-producing agricultural county in the United States, following three counties in California where high-value irrigated fruit and vegetable production dominates sales.
Weld County is important not only because of its size but also because of its concentration of livestock and high-value crop production, much of it irrigated. Agribusiness includes more than just the production of crops and livestock. It also includes processing (Monfort of Colorado Inc. and Anheuser-Busch Co. Inc.) and retailing (grocery stores and restaurants).
How large is the agribusiness industry? It accounts for one out of every three dollars earned in the Larimer and Weld economy, 33 percent of the value that is added to all products produced in the region. Agribusiness is more important in Weld County, accounting for 46 percent of value added, whereas in the smaller, more mountainous and urban Larimer County, it accounts for only 20 percent.
How large is agribusiness measured by the number of jobs? Four out of every 10 jobs are directly or indirectly dependent on agribusiness, 41 percent of total employment. These jobs are about equally divided between the crop and livestock production (36 percent), processing (31 percent), and retailing (33 percent).
Agribusiness also dominates total sales of products in the region, contributing 40 percent of total business sales. Most of these sales are in processing (58 percent). Crop and livestock production accounts for 24 percent of agribusiness sales, and retailing accounts for 19 percent, including restaurant sales to visitors from Wyoming and other areas.The agribusiness industry imports more than $3.3 billion of inputs, 39 percent of total imports into the Weld/Larimer region. Eighty-two percent of these imports are by processing firms.
Remember, Monfort imports a large number of animals from outside the region.
The agribusiness industry exports almost $5 billion of products, 37 percent of total exports from the Larimer/Weld region. Ninety-six percent of agribusiness exports are by processing firms, that is, Monfort and Budweiser exporting meat and beer to the rest of the United States and world.
Weld County has the largest meat-packing industry of any county in the nation, followed closely in size by the malt-beverage industry in Larimer County. About 110 different sectors in the region supply the meat-packing industry; 43 have sales to this industry exceeding $100,000 annually. These include not only cattle, sheep and hog producers but also advertising, packaging materials, and transportation. The meat-packing industry exports about $1 billion annually.
Locally, restaurants are the single largest buyer of processed meat products.
Personal income and employment multipliers for production, processing and retailing vary significantly.
The personal-income multiplier describes how income earned by employees affects incomes earned in other businesses in the region. For example, every $1 of personal income earned by employees in the production sector generates another $2.30 of personal income in other sectors of the local economy. The personal-income multiplier in the retailing sectors is low. This is because the retailing sector is labor-intensive and wages are low.
Employment multipliers describe how many secondary jobs are supported by each primary job.
The employment multipliers range from 1.8 to 4.9, indicating that for every primary job in the processing sectors, 3.9 jobs are supported in other local sectors.
These multipliers are relatively high, indicating that most production purchases are made locally.Industries of this type are very valuable to a local economy because they purchase most of their basic and other inputs from local suppliers, thus creating many jobs and much income in other local businesses.
The production end of agribusiness is not labor-intensive. Only 30 percent of value added is paid as wages and salaries. Labor is a larger part of value added in processing firms (50 percent) and agriretailing firms (67 percent).John Green is a consultant and professor of economics at the University of Northern Colorado in Greeley. He can be reached at (970) 484-6463. Eric Siverts is president of Siverts and Associates in Fort Collins. He can be reached at (970) 493-2485.