Oregon’s Food Manufacturing Industry – Adding Value

by Dallas Fridley

July 18, 2022

Food manufacturers process livestock and agricultural inputs into products for intermediate or final consumption. The industry adds value to raw agricultural products, selling its output to wholesalers or retailers for distribution to consumers. Although wholesalers and retailers are an important cog bringing products to market, much like agricultural producers, they are not part of the food manufacturing industry.

The industry groups found in food manufacturing are categorized by the raw agricultural input processed. Food manufacturing consists of these industry groups, listed by their 2021 employment total:

  • Fruit and Vegetable Preserving and Specialty Food Manufacturing (9,981)
  • Bakeries and Tortilla Manufacturing (5,853)
  • Other Food Manufacturing (4,492)
  • Dairy Product Manufacturing (2,504)
  • Animal Slaughtering and Processing (2,107)
  • Grain and Oilseed Milling (1,312)
  • Seafood Product Preparation and Packaging (1,083)
  • Sugar and Confectionery Product Manufacturing (796)
  • Animal Food Manufacturing (297)
Nationally, the food manufacturing industry provided more than 1.6 million jobs in 2021 with a payroll of $90.2 billion. Oregon’s food manufacturing industry produced a location quotient (LQ) of 1.33 in 2021, showing a higher concentration of employment relative to the nation. Arkansas produced an LQ of 3.6 to lead the states and Oregon’s food manufacturing industry ranked 16th. California ranked highest for employment in 2021, with close to 157,000 jobs, while Oregon ranked in the middle of the pack in the 25th position.

Oregon Food Manufacturing in 2021

Oregon’s food manufacturing industry provided just over 28,400 jobs in 2021.The industry reached peak employment in 2019 with nearly 29,900 jobs. At the onset of the COVID-19 pandemic in April 2020, food manufacturing cut about 2,100 jobs, a one-month drop of 7.6%, falling to 25,900. Food manufacturing typically reaches its seasonal employment high in the month of July – but its 2020 peak trailed July 2019 by nearly 2,800 jobs (-8.6%). Employment growth returned in 2021, with close to 600 jobs gained on an annual basis, but the industry remained about 1,500 jobs below its 2019 high.
Food manufacturing’s payroll exceeded $1.4 billion in 2021, an increase of $82 million or 6.1% over 2020. In spite of its COVID job losses, food manufacturing increased its payroll by 3.7% in 2020 – pushing its two-year gain (2019-2021) to $129.5 million or 10.0%.

Food manufacturing’s annual pay averaged $50,063 in 2021 – a one-year increase of 4.4% or about $2,100. Annual pay rose by 10.8% in 2020 alone as the industry adjusted to COVID protocols with fewer workers. Oregon’s private industry pay averaged $63,095 in 2021 or about 21% higher than in food manufacturing. Private industry’s average pay rose by 16.9% (+$9,102) from 2019 to 2021, just ahead of food manufacturing’s 15.7% (+$6,790).

Food manufacturing included 903 business units in 2021, setting a new peak for the industry, just ahead of 2019’s 890 units. Food manufacturing business units (with employment) averaged 31.5 jobs in 2021 – down somewhat from 2019’s 33.6 jobs.

The Subsectors

Fruit and vegetable preserving and specialty food manufacturing represented better than one out of three (35%) food manufacturing industry jobs in 2021, averaging about 10,000. Its payroll reached $508 million, representing about 36% of food manufacturing’s total. Annual pay in fruit and vegetable preserving and specialty foods reached $50,863 in 2021, just above (+1.5%) the food manufacturing industry average. The subsector included 115 business units (with employment) in 2021, an increase of 31 units over 2011. The average business unit provided 87 jobs in 2021, a drop of 25 jobs compared with 2011.

Bakeries and tortilla manufacturing averaged close to 5,900 jobs or 20% of food manufacturing’s 2021 total. Payrolls in bakeries and tortilla manufacturing rose to $265 million in 2021 to represent 19% of the industry’s total pay. Annual pay averaged $45,468, lagging the food manufacturing industry average by about 9% or $4,600. Bakeries and tortilla manufacturing included 217 business units in 2021 or about one out of three food manufacturing units. The number of business units in bakeries and tortilla manufacturing increased by 62 or about 30% over 2011. Each unit provided an average of 22 jobs in 2021, little changed from 2011’s 23 jobs.
Other food manufacturing covers an entire range of miscellaneous food products, including snack foods, coffee and tea, concentrates, syrups, condiments, and spices. The subsector provided nearly 4,500 jobs in 2021 or close to 16% of the food manufacturing industry total. Other food manufacturing boasted a payroll of $216 million, representing about 15% of the industry total. Annual pay in other food manufacturing surpassed $48,400 but lagged behind the industry average by close to $1,700 or 3%. The other food manufacturing subsector included 192 business units (with employment) or about 23% of the industry’s units. Since 2011, other food manufacturing gained 85 business units, an increase of about 79%. The average unit provided 23 jobs in 2021, a drop of 10 jobs since 2011.

The dairy product manufacturing subsector processes dairy products from raw milk, processed milk, and dairy substitutes. Dairy product manufacturing averaged close to 2,500 jobs in 2021 or 9% of the food manufacturing industry total. Payrolls in dairy product manufacturing reached nearly $149 million and its average wage topped $59,700, exceeding the industry’s average by about 19% or $9,600. The subsector included 115 business units in 2021 or about 14% of the food manufacturing industry total, an increase of 31 units over 2011. The average unit size fell substantially since 2011, dropping from 112 jobs to 87.

The animal slaughtering and processing industry provided around 2,100 jobs in 2021 or more than 7% of food manufacturing’s total. The subsector’s payroll rose to $105.5 million in 2021 and its average wage reached about $50,000. The number of business units (with employment) rose from 53 in 2011 to 62 in 2021. Animal slaughtering and processing averaged 62 jobs in 2021 – an increase of nine jobs per unit since 2011.

The four remaining food manufacturing subsectors together provided close to 3,500 jobs in 2021 and a payroll reaching $177 million. Animal food manufacturing paid the highest average wage in the food manufacturing industry, at about $67,000 and with just 29 business units, the subsector averaged about 10 jobs per unit in 2021. Sugar and confectionery product manufacturing paid around $38,000 per job in 2021, lagging the food manufacturing industry average by about $12,000. Sugar and confectionery product manufacturing maintained its average size from 2011 to 2021 while adding 26 additional units. Grain and oilseed milling grew by 5 business units from 2011 to 2021 and increased its size per unit by about 18 jobs to average 73. Grain and oilseed milling paid an average $60,100 in 2021, exceeding the food manufacturing industry average by about $10,000 or 20%. Seafood product preparation and packaging included 34 business units (with employment) in 2021, increasing its unit count by 10 to reach a new peak. The subsector averaged about 32 jobs per unit in 2021, a drop of around 15 jobs since 2011. Seafood product preparation and packaging paid an average $45,300 in 2021, lagging the food manufacturing average by about $4,800 jobs or 10%.

Geographic Profile

Food manufacturers produced products and jobs in 34 of Oregon’s 36 counties in 2021. Multnomah County led the state with about 6,500 jobs or 23% of food manufacturing’s total. Marion County ranked second in 2021 with around 3,400 jobs (12%), followed by Washington County’s 2,500 (9%), Clackamas County’s 2,300 (8%), and Lane County’s 2,200 (8%). Rural Oregon was led by Morrow County’s 1,700 jobs (6%), good enough to rank sixth statewide, followed by Umatilla County’s 1,400 jobs (5%), ranking seventh.

Bakeries and tortilla manufacturing produced products and jobs in 28 of Oregon’s 36 counties, capturing the broadest geographic representation of any subsector, while grain and oilseed milling operated in just eight counties. Multnomah County led five subsectors, including: animal food; sugar and confectionary products; dairy products; bakeries and tortillas; and other food manufacturing. Large firms limited the disclosure of geographic details for grain and oilseed milling (eight counties), animal slaughtering and processing (22 counties) and seafood product preparation and packaging (13 counties). Marion County led fruit and vegetable preserving and specialty food manufacturing with 41% of the industry’s jobs.

Recent Past and 10-Year Forecast

Oregon’s food manufacturing industry is expected to add 3,800 jobs between 2020 and 2030 to reach 31,800, an increase of 14% or close to 400 jobs annually. Oregon’s manufacturing industry has a slightly lower growth projection, at 11%, while the overall rate for private industry climbs to 18%.

Over the most recent 10-year stretch, 2011 to 2021, Oregon’s food manufacturing industry rose by 4,180 jobs or 17%. The grain and oilseed milling subsector led growth on a percentage basis, rising by 84% or 600 jobs. Bakeries and tortilla manufacturing led employment growth, rising by nearly 1,000 jobs or 20%. Both seafood product preparation and packaging (-4%) and dairy products (-1%) lost jobs between 2011 and 2021. Food manufacturing has yet to recover all the jobs it lost during the pandemic – but one trend that did carry through the downturn was growth in business units, and in particular the transition to smaller-sized firms.

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