Agriculture generates $5.7 billion for SJ County economy

STOCKTON – Agriculture in San Joaquin County represented 7.1 percent of the county’s total economic output in 2018, generating $5.732 billion when production, processing, multiplier effects and employment are taken into account, according to a recent report.

That’s a new way of looking at the importance of what farmers and ranchers add to San Joaquin County’s economy, county Agricultural Commissioner Tim Pelican said at Tuesday’s County Board of Supervisors meeting.

“This study goes beyond our annual agricultural crop report. It captures not just the direct effects of farm production but also local food processing, employment and their ripple effects. During these uncertain economic times, it’s important to better understand how and where agriculture contributes to our economy and to local employment,” Pelican said.

The latest findings of ag’s economic contributions go beyond just its traditional production value, which for the same year was initially reported as $2.594 billion.

By including the other factors, agriculture’s direct economic output was listed as $3.979 billion. Add to that the multiplier effects – the ripples in the economy that have to do with purchasing ag supplies and spending by employees – and you generate another $1.753 billion, according to the report.

Looking at it another way, agriculture generated more than $15.7 million per day into the county’s economy or more than $654,000 per hour, according to the report entitled “Economic Contributions of San Joaquin County Agriculture” prepared by Agricultural Impact Associates, a consulting firm that focuses on economic analysis of agriculture in California.

“There is a California requirement that every county for the last century has to report to Sacramento the value of its agricultural products every single year. San Joaquin and the others have been doing since at least the 1920s,” said Jeff Langholz, a senior researcher at Agricultural Impact Associates and one of the new report’s authors.

“But we have some new economic tools that allow us to fulfill that mandate better and we can report the value of agriculture beyond what is in the annual crop report – for example, the 2018 one which shows the production values of walnuts and almonds and livestock and so much more. Now we can do that in this report with not just production but also with locally sourced value-added food processing, the multiplier effects of agriculture and also employment,” Langholz told the Board of Supervisors.

He also noted that this new, more robust reporting on the value of agriculture to its local economy is a growing trend among counties throughout the state.

A key finding of the report has to do with the employment effects of the ag industry. Countywide in 2018, there were 29,986 direct employees working in ag. Another 3,751 additional jobs were attributable to the multiplier effects from expenditures by agricultural companies and their employees, such as purchases of vehicles, fuel, seeds, insurance and other items.

Another finding shows that with a diversification index of 0.63 – considered “exceptionally high” on a scale from 0 to 1 – San Joaquin County agriculture is quite well situated to withstand the economic shocks of price drops, disease outbreaks, new regulations, new competitors or price spikes for key inputs, according to Langholz.

Compared to the rest of California, this provides critical economic stability to the ag industry and the county, the report concludes.

“When you drive around the county, you get the idea when you see all the fields that agriculture is important here to the county economy. This study shows that it is probably more important than we thought,” Langholz said.

Contact reporter Joe Goldeen at (209) 546-8278 or jgoldeen@recordnet.com. Follow him on Twiter @JoeGoldeen.