Report
Authors
Publication Date: May 2014 Download the report and summary
Cattle ranching remains an important part of Arizona agriculture, making a variety of economic contributions to Arizona county economies and to the state economy as a whole.
The beef industry extends beyond production by cow-calf ranches and feedlot operations. It also includes cattle processing in slaughter and leather and hide tanning and finishing operations. The beef industry purchases inputs from other sectors of Arizona’s economy, while earnings from the industry (profits and wages) are spent on Arizona goods and services. This means that the beef industry has impacts that extend to many different sectors of the state’s economy.
In order to determine the contribution of the beef industry to the Arizona economy, one must take a comprehensive look at the industry, incorporating the economic activities of industries directly and indirectly related to the beef industry.
Findings
- The total market value of capital assets of Arizona beef cattle operations is more than $5.2 billion. These assets include land, buildings, and machinery.
- The value of these capital assets average more than $1.2 million per ranching operation.
- In addition to these capital assets, the Arizona beef industry manages 71 per- cent of the state’s cattle and calf inventory, which is valued at more than $1 billion (with the dairy sector managing the remaining 29 percent). These inventories represent valuable assets that can be placed at risk by prolonged drought or weather extremes.
- Grazing is the dominant land use in Arizona. Grazing land makes up 73 percent of Arizona’s total land area and approximately 98 percent of Arizona’s total agricultural land, with cropland accounting for the remaining 2 percent of agricultural land.
- In 2011, Arizona cattle and calf sales surpassed $800 million.
- Direct cattle and calf sales represent only part of beef industry output. Input- output analysis was used to estimate the contribution of the entire beef industry to Arizona’s economy. The total contribution to state output of the beef industry was $1.7 billion ($1.2 billion in beef industry sales and $0.5 billion in sales stimulated in other sectors of the Arizona economy).
- The beef industry contributed $431 million to Arizona’s GDP (or value added).
- Every 100 workers hired by the beef industry create 62 additional jobs in other industries in Arizona. Beef industry proprietors’ contribution to total state employment was 8,758 hired jobs—5,411 jobs directly related to the beef industry and an additional 3,347 jobs created throughout the state in other industries.
- Approximately 21 percent of all farms in Arizona specialize in beef production. By specialize, we mean that more than half of farm sales come from the sale of beef cattle. Farms specializing in beef production are the third most numerous type of all agricultural operations in Arizona.
- Of all Arizona operations with sales in 2012 (the most recent Census of Agriculture data available), there were 3,364 operations with sales of cattle. This ranks operations with cattle sales as the second most numerous type of agricultural operation in the state. Operations with cattle sales were the most numerous agricultural operation in seven of Arizona’s 15 counties.
- In 2012, cattle and calf sales accounted for 18.8 percent of total agricultural sales in Arizona, ranking third in sales among all agricultural commodities. In five of 15 counties, however, the sale of cattle and calves ranked first in agricultural sales.
- In 2011, the total number of cattle commercially slaughtered in Arizona was 565,000 head, producing a total live weight of more than 721 million pounds.
- Economic base analysis identifies which industries are basic: industries that generate relatively more jobs than the national average and bring money from outside the region into the local area. Outside of the urbanized, metropolitan areas (Maricopa and Pima counties) and Mohave County, where specialization in mining is important, ranching remains a basic sector in Arizona county economies. Arizona’s remaining 12 counties are more specialized in cattle production than the nation as whole and employ relatively more people in ranching. Looking only at state averages can understate the continuing importance of ranching in Arizona’s rural counties.
Methods
- Using data primarily from the 2012 Census of Agriculture and 2011 Arizona Agricultural Statistics Bulletin, we conducted an overview of the beef industry in Arizona, tracing the stages of production from cow-calf and feedlot operations to processing operations (including slaughter plants and leather and hide tanning and finishing operations).
- The importance of the beef industry at the state and county levels were deter- mined by conducting an economic base analysis. This analysis allows for the identification of industries that serve as part of the economic base as well as high- lights whether the industry employs more people in the region than the national average.
- The economic contribution of the beef industry to the state of Arizona was estimated using input-output modeling and the premiere software for this type of analysis, IMPLAN. The beef industry’s contribution to total output, value added (GDP), employment, and labor income was estimated. Individual profiles were developed for each Arizona county, estimating the economic contribution of cattle ranching and the beef industry to local county economies.