The Economic Impact of Cows and Crops in Eastern Oregon

by Christopher Rich

July 3, 2018

Agriculture’s role in the rural economy is a hot topic. Some folks feel agriculture plays a vital role in rural America. Others feel this is simply a myth. At first glance, this appears like a relatively straightforward topic to address. Just aggregate data from all rural economies and look at the overall impact of agriculture. This approach, however, is problematic.

In a philosophical sense, one person’s rural is another person’s urban. In a technical sense, Defining the “Rural” in Rural America is no small task. Compounding the challenge is the aspect that rural designations often change over time as populations shift and economies evolve. Moreover, data aggregation can lead to dilution. The larger the aggregation, the more likely it is that the individual impact is obscured.

Luckily, I don’t have to address the economic impact of agriculture in rural America. I can narrow the focus to a more clearly defined area, which is a little less problematic. I get to address the economic impact of agriculture in Eastern Oregon (Baker, Grant, Harney, Malheur, Morrow, Umatilla, Union, and Wallowa).

Eastern Oregon Has Cattle…Lots of Cattle

The Census of Agriculture is the most comprehensive snapshot of the nation’s agricultural activities. Required by law, the Census is produced every five years by the National Agricultural Statistics Service, a division of the U.S. Department of Agriculture. “The Census of Agriculture is a complete count of U.S. farms and ranches and the people who operate them.” The Census counts even small plots of land if products worth $1,000 or more were raised or sold, normally would have been, or potentially could have been in the year prior to when the Census was taken.

While the 2017 Census of Agriculture won’t be released until February 2019, data from the 2012 Census provides a relatively recent snapshot of Eastern Oregon. In 2012, Eastern Oregon’s 6,008 farms and ranches (hereafter referred to as farms) accounted for just 17 percent of all Oregon farms. The region, however, accounted for roughly 45 percent of all farmland in Oregon. Eastern Oregon farms produced just over half of all beef cows and half of all cattle and calves in Oregon: 261,450 beef cows and 647,431 cattle and calves. In turn, the region’s farms accounted for nearly half ($762 million) the total value of all livestock sales in the state overall. The region’s farms also captured 28 percent ($911 million) of the total value of Oregon’s crop sales. All told, Eastern Oregon accounted for 34 percent (nearly $1.7 billion) of the $4.9 billion in agricultural products sold in Oregon in 2012.
Agriculture Produces Jobs and Wages

We can look at how this translated directly to employment and wages in 2012 by examining Unemployment Insurance (UI) tax records. By comparing UI records from 2012 to those for 2017, we can look at how agriculture currently impacts employment and wages and get a feel for changes in the industry in Eastern Oregon over the previous five years. Altogether, crop and animal production accounted for 7.6 percent of private-sector employment and 6.9 percent of private wages in 2012. This was nearly unchanged in 2017 when crop and animal production accounted for a slightly lower 7.5 percent of private employment (4,116 Jobs) and a slightly higher 7.1 percent of private wages ($142 million).

While the overall share of private employment and wages from agriculture was nearly unchanged, animal production has been gaining ground in Eastern Oregon. Whereas crop production provided 5.9 percent of private employment and 5.2 percent of private wages for the region in 2012, crop production slipped to 5.4 percent of private employment (2,957 jobs) and 4.9 percent of private wages ($98 million) in 2017. Animal production on the other hand grew from 1.7 percent of both private employment and wages in 2012 to 2.1 percent of private employment (1,159 jobs) and 2.2 percent of private wages ($43 million) in 2017.

Few private industries surpassed the share of employment and wages that crop and animal production contributed to the region’s economy in 2017. Manufacturing, retail trade, and education and health services each accounted for a larger share; roughly 15.0 percent of Eastern Oregon’s private employment and between 11.0 percent and 18.0 percent of private wages. Leisure and hospitality accounted for 11.0 percent of private employment, yet only 4.8 percent of private wages came from the industry: a larger share of employment, and a smaller share of wages. In addition, construction, wholesale trade, financial activities, other services, and professional and business services each provided a smaller share of both private employment and wages than crop and animal production did. This makes agriculture a top industry in Eastern Oregon.
Agriculture’s Impact Is Direct and Indirect

Along with employment and wages from crop and animal production comes other direct and indirect impacts. The agriculture industry directly supports firms in several industries in the region through activities such as purchases of equipment and supplies; maintenance, repair, and construction of equipment and facilities; fuel sales; processing, packing, and warehousing; and transportation and shipping, just to name a few.

At least 200 separate firms in Eastern Oregon depend on the region’s agriculture in order to continue operations. These firms provide services for, or purchase products from local agriculture markets and operate in the following industries: agriculture support activities, wholesale trade, retail trade, food manufacturing, and other services. They have a combined average annual employment of 8,000 employees, or 14.5 percent of the region’s total private employment. Wages for these workers, as well as those paid to the region’s agriculture workers, help feed the region’s economy. This in turn supports things like restaurants, retail, and real estate.  

Agriculture Is Symbiotic

The average annual wage for crop and animal production combined was $34,400 in 2017. This was slightly less than the average annual wage for all private industries ($36,000) and below middle of the pack when ranking the broad private industries. Individually, crop production had an annual average wage of $33,200 and animal production had a wage of $37,500. Agriculture’s average wage was much larger than the average annual wage for retail trade ($26,400) and leisure and hospitality ($15,600), both of which are large contributors of employment in the region with seasonal employment swings.

Agriculture generally has a significant seasonal component as well. In Eastern Oregon, seasonal agriculture jobs are found mainly in crop production in Malheur, Morrow, Umatilla, and Union counties. Workers who fill seasonal positions often work outside of agriculture during the off-season, or they may primarily work in other industries and work in agriculture as a side gig during the harvest season, in order to pad their paychecks in preparation for leaner times. A majority of these workers likely also work in other industries where employment and income levels are prone to seasonal fluctuations. 

Aside from seasonal workers, a large number of farm operators (and/or their spouses) find secondary employment off the farm in order to support or supplement an agriculture lifestyle. Nearly 38 percent of principal farm operators in Eastern Oregon reported working 200 or more days off the farm in 2012. This is likely because 70 percent of the region’s farms reported total sales of less than $50,000 and 61 percent reported sales of less than $25,000.

Agriculture, then, forms a symbiotic relationship with the local economy. It provides an attractive lifestyle for residents; infuses the economy with employment and wages; creates a market for firms to do business in support of agriculture; and shares workers with other industries so that those who might otherwise leave the area due to economic instability can find income through multiple sources. This symbiotic relationship helps to stabilize the population and in turn helps to stabilize the economy.
Agriculture Nourishes the Region

At least 22 percent of private-sector employment came directly from two linked sources in 2017: firms in crop and animal production, and firms largely dependent on agriculture for business. However, the overall impact of agriculture is even more substantial than this due to how agriculture indirectly nourishes the economy. Crop and animal production supplied 7.5 percent of private-sector employment and 7.1 percent of private-sector wages in 2017, making agriculture a top industry in Eastern Oregon.

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