Agriculture in Marion, Polk, and Yamhill Counties

by Pat O'Connor

February 12, 2020

Agriculture is the longest-standing industry to exist in Oregon and in the Mid-Willamette Valley. In fact, long before America’s westward expansion of the 19th century and before Lewis and Clark’s famous expedition that led them to the Oregon territory, Native Americans in the area already had an agriculture industry at work that included hunting, trapping, harvesting, and preserving food. On Lewis and Clark’s expedition, they documented the plants growing in the region and also wrote about the agricultural practices of the Native Americans in the area.

The way the industry appeared in the early 1800s would have been almost unrecognizable compared with what the industry has evolved to more than 200 years later in what is now the state of Oregon.

As Oregon grew as a territory and later became the 33rd state to join the Union, agriculture has always been a vital part of the economy. Nowhere is that more apparent than in the Mid-Willamette Valley, where it continues to be the largest traded sector of the economy.

Acreage and Sales

In 2017, Marion, Polk, and Yamhill counties comprised less than 4 percent of Oregon’s total harvested acreage. However, the three counties comprised 23 percent of the state’s total commodity sales in 2017. The fact that the three counties generated 23 percent of the state’s gross commodity sales on only 4 percent of the state agricultural acres helps illustrate just how productive the Willamette Valley’s agriculture land is.

The table below shows the top five commodities ranked by gross sales for each county. Nursery crops were the top commodity in both Marion and Yamhill counties for 2017. Oregon’s nursery industry was very hard-hit during the Great Recession due to the dramatic downturn in the nation’s housing market. As housing starts plummeted in the
U.S., gross sales for Oregon’s nursery industry followed suit. In Marion County, nursery sales hit a high point of nearly $244 million in 2007. By 2012, sales had dropped to $202 million, a 17 percent decline from 2007. Marion County’s nursery crop sales have rebounded since 2012, reaching sales of $277 million in 2017.

In Yamhill County, nursery crops experienced a decline in sales similar to Marion County. Nursery sales reached a high of nearly $121 million for 2007 in Yamhill County. In 2012, nursery sales in Yamhill County were $99 million, an 18 percent decline from the high of 2007. It has also rebounded since 2012, reaching sales of nearly $134 million in 2017.

Yamhill County was fortunate that another large commodity, wine grapes, weathered the recession better than the nursery industry. A 2011 and 2018 report from Full Glass Research, commissioned by the Oregon Wine Commission, estimated that Yamhill County had $348 million in wine-related revenue in 2010. By 2016, that figure nearly doubled with the county showing $687 million in wine-related revenue.  

Nursery crops are not as large of an industry in Polk County, compared with Marion and Yamhill counties. Polk County’s top commodity in 2017 was field crops with nearly $35 million in sales. The field crops commodity is dominated by grass seed production in all three counties. Fruit and tree nuts were not far behind with more than $32 million in sales. That group is dominated by hazelnuts in Polk County. Although not as large as Yamhill County’s wine industry, Polk County’s wine sector has also shown healthy growth in recent years. Polk County had $98 million in wine-related revenue in 2010. That figure grew to $180 million in wine-related revenue in 2016.

Acreage Reduction

According to the Census of Agriculture, from 1954 to 2007 the number of acres actively used for agriculture contracted 16.3 percent in both Marion County and Yamhill County, losing 60,107 and 91,726 acres, respectively. Over the same period of time, Polk County’s acreage dropped 33.6 percent, or 70,658 acres.

Oregon’s agricultural acreage from 1954 to 2007 shrunk 22.1 percent, or more than 4.6 million acres.

The reduction in acreage has continued since 2007. Statewide from 2007 to 2017, Oregon’s agricultural acreage declined nearly 3 percent, shedding more than 400,000 acres. Marion County’s acreage was reduced 6 percent over that time period, losing nearly 19,000 acres. Yamhill County experienced a similar loss, losing more than 11,000 acres, or 6 percent, of its agricultural acres. Polk County had the most dramatic decline in acreage from 2007 to 2017. Polk County shed nearly 18,000 agricultural acres over that time period, an 11 percent reduction.  

There are a number of factors that have played into the reduction in the number of acres being used in agriculture. Urban growth expanding out and converting agricultural land into housing is certainly one reason.

Another big factor in the post-World War II era has been the increased productivity farmers have achieved through improved farming methods and technological innovation. During World War II, nitrogen was one of the main components for the explosives used in bombs. The U.S. government built 10 new plants to supply nitrogen for bombs during the war. Following the war, those plants produced ammonia for fertilizer. The increased availability of fertilizers as well as farmers and scientists having a better understanding of how important nutrients were to crops allowed agriculture’s “green revolution” to continue at a fast pace with significantly higher yields per acre.     

Agriculture as a Share of GDP

The Bureau of Economic Analysis (BEA) provides us with estimates of gross domestic product (GDP) for metropolitan areas in the United States. Yamhill County is included in the estimates for the Portland Primary Metropolitan Statistical Area (PMSA), but we are not able to look at Yamhill County separately from the Portland PMSA. Fortunately, Marion and Polk counties are published together as the Salem Metropolitan Statistical Area (MSA). This should give a good idea of how big of a part agriculture plays in the Mid-Willamette Valley economy.

Gross domestic product, or GDP, is simply measuring the market value of all officially recognized final goods and services within an area. The most recent year GDP data available for the Salem MSA is from 2016. In 2016, Salem’s total GDP across all industries was $16.68 billion. Agriculture comprised $441 million, or 2.6 percent, of Salem’s GDP. This only includes farms in the Salem MSA and does not include forestry. GDP for Salem’s forestry sector is not disclosed due to confidentiality. Accounting for 2.6 percent of Salem’s GDP may not sound like that much, but when compared with the national average it reveals just how large the industry is. Salem’s agriculture sector contributed more than six times more to our local GDP compared with the national average in 2016.
 
A complimentary industry closely tied to agriculture is food processing. Food and beverage and tobacco product manufacturing in the Salem MSA accounted for $445 million, or 2.7 percent, of Salem’s total GDP. The majority of that industry is comprised of food manufacturers in the Salem MSA. Wine and beer makers are included under beverage manufacturing, but Salem has no tobacco manufacturing to speak of. Food and beverage manufacturing in the Salem MSA contributes about two times the national average in terms of its local share of GDP.         

If we look at agriculture and the food and beverage manufacturing sector together, they combined to make up 5.3 percent of the Salem MSA’s GDP.

Even though we don’t have GDP data specifically for Yamhill County, the next section where employment data is covered will show that Yamhill County is quite similar to the Salem MSA. It is safe to assume that a similar share of Yamhill County’s GDP would come from the county’s agriculture sector.

Agriculture Employment

Marion, Polk, and Yamhill counties’ annual average agriculture employment in 2018 was just over 14,500, with a total payroll of more than $508 million. The majority of those jobs were within crop production, which accounted for 8,500 jobs and $302 million in payroll. A little less than 600 jobs and $22 million in payroll were in animal production. Agriculture and forestry support activities employed nearly 4,500 in 2018 and had $143 million in payroll. Marion, Polk, and Yamhill counties’ food manufacturing employment for 2018 was 5,280, and nearly $191 million in payroll. Beverage manufacturing employment in 2018 was 2,030 with $82 million in payroll.

As a group, agriculture, food manufacturing, and beverage manufacturing had a total of 22,270 jobs in 2018 with payroll of $807 million. That represented 13 percent of all the private-sector jobs in the three counties and more than 11 percent of the region’s private-sector payroll.

In order to compare our local area with the nation, we need to look back to 2010 employment data. Comparing data for Marion, Polk, and Yamhill counties with the nation shows that a high concentration of employment in the Mid-Willamette Valley was in agriculture and food and beverage manufacturing.

Marion and Polk counties both have more than eight times the concentration of employment in crop production than is found nationwide. Yamhill County’s employment concentration in crop production is even higher, more than 19 times what is seen nationally.

Looking at food manufacturing employment, Marion County’s concentration is more than two times the national average. Polk County also has more than two times the employment concentration that is found nationwide. Yamhill County’s food manufacturing concentration is nearly twice the national average, but Yamhill County’s beverage manufacturing has 21 times the concentration found nationally; this is the industry where employment is counted for Yamhill County’s wine makers. For comparison sake, Napa County, California has 76 times the concentration of employment in beverage manufacturing than is found nationally. Polk County has a high concentration of beverage manufacturing employment as well, more than 10 times the national average.

Future Trends

In terms of employment, the agriculture industry in Oregon and the Willamette Valley is projected to grow between 2017 and 2027. Overall employment in the Mid-Valley is projected to grow 12 percent over the 10-year period. Natural resources and mining, of which agriculture comprises the lion’s share, is projected to grow 14 percent in the Mid-Valley, slightly faster than the overall economy.

Statewide, natural resources and mining is projected to grow 11 percent from 2017 to 2027, nearly as fast as Oregon’s overall projected employment growth of 12 percent over that time. 

Agriculture and its related industries played an essential role in the Mid-Willamette Valley’s economy before Oregon ever became a state. Changing markets, changes in consumer preferences, and changes in technology will continue to change the composition and appearance of the region’s agriculture sector, but agriculture will continue to play an important role in the region’s economy into the future.                    


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