Ag at Large: Packs, processing add value to California agriculture

Ag at Large: Packs, processing add value to California agriculture

The economic value of California agricultural processing and packaging industries totaled $82 billion in 2012.

California’s enormous agricultural value is remarkable in its own right, but processing and packaging pushes the figure through the roof.

Three economics researchers at the University of California (UC) have issued a report that shows the processing and packaging sector for the state’s agricultural products is in itself enormous. 

Milk and wine, both a little squishy if not packaged, led the way by adding a combined $26 billion to the value of the two commodities through packaging. When all commodities are considered, the value added by processing and packaging was $82 billion for 2012, the last year for which figures are complete.

Fruit and vegetable canning, pickling, and drying combined with the value added of baking account for more than $15 billion. Imagine what this means to the manufacturers of cans, jars, bottles, and the whole assortment of wraps and packages.

The report reveals that the value of processing and packaging is not limited to wrapping materials - it translates into jobs.

In the 27 counties most actively engaged in processing or packaging, the value added accounts for 760,000 full- or part-time jobs. The big winner is Los Angeles County with more than 100,000 jobs.

Counties that hired more than 20,000 workers each for the tasks include Alameda, Fresno, Sonoma, and Stanislaus. 

In a few counties, processing and packaging had a major impact on the total jobs picture.

In Colusa County, it accounted for 48 percent of all jobs. It supplied 33 percent of all jobs in Kings County, 22 percent in Merced County, 20 percent in Stanislaus County, and 15 percent in Sonoma County.

The 100,000 jobs in Los Angeles County were only 3 percent of the total.

Creates tax revenue 

Another important benefit of this food production sector is the tax advantage at the local, state, and federal levels. The tax benefit for Stanislaus County, for example, shows as $49,408 to the feds and $40,846 to state and local coffers.

To arrive at the total, factor in the county’s value added from packaging and processing of nearly $1.3 billion.

Looking at the packaging of dairy products - the state’s largest food processing industry at $15.6 billion - the report estimates it directly accounts for 18,000 jobs. Further, they estimated that an additional 122,000 jobs are generated from the indirect and induced impacts (a little economist’s language there), resulting in more than 139,000 California jobs.    

The UC report authors include: Professor Richard Sexton, chair of the Agricultural and Resource Economics Department; Josue Medellin-Azuara, research fellow in the Civil and Environmental Engineering Department at UC Davis; and Tina Saitone, project economist in the Agricultural and Resource Economics Department at Davis.    

Their findings were reported in the university’s bi-monthly Update, a publication of the department of Agricultural and Resource Economics.

The authors expect production and demand growth to continue in the food and beverage industries.

The report paints a very bright picture for agriculture in California generally, how ever its products are packaged, bottled, tied up, or presented – if folks can just figure out how to open the containers.

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