While citrus continues to be Florida’s signature agricultural crop, the environmental horticulture industry — which includes landscape plants, flowers, foliage, turfgrass, and related landscape services — is now the fastest growing segment of industry, according to a new University of Florida economic study.
“Much of this growth can be attributed to the state’s rapid urban development that creates a huge demand for nursery and landscape plants,” said Alan Hodges, an associate in UF’s Institute of Food and Agricultural Sciences.
“The state’s fruit and vegetable industry, which includes the $9 billion citrus industry, is still the largest, and the $8.6 billion forestry products industry is the second largest, but the $6.9 billion environmental horticulture industry is the fastest growing segment, and could become the largest if trends continue,” Hodges said.
In addition, the environmental horticulture industry is associated with a very large lawn and garden retailing business, estimated at $1.3 billion in annual output in Florida, he said.
The total impact of agriculture and natural resources on the state’s economy exceeds $62 billion annually, and these industries also provide wildlife habitat, aquifer recharge areas and the amenities of open space, the study says.
Hodges, who conducted the study with David Mulkey, a professor of food and resource economics, said agriculture and natural resource industries showed “remarkable strength” through the recent economic downturn.
“In fact, the agriculture and natural resource sectors performed better over the past two years than any other major sector of Florida’s $484 billion economy,” said Mulkey, co-author of the economic impact study that covers eight separate regions of the state.
“Make no mistake about it, the agriculture and natural resource industries are big in Florida, and their economic impact is statewide,” he said. “Agriculture — considered the state’s most basic industry — did not get hit as hard as tourism and other major economic sectors.”
According to the latest data from the U.S. Department of Commerce, personal income in Florida increased by 26 percent in the farm sector, while income in the non-farm sector increased by only 8 percent during the past two years, since the first quarter of 2001, before the recent recession.
Mulkey said output, employment and value-added impacts are the three principal measures of economic activity. Industry output represents total income or sales plus inventory change. Employment includes both full-time and part-time or seasonal positions. And value-added represents the value of output less the value of purchased inputs used in the production of goods or services for final consumption.
He said the agriculture and natural resource industries include a wide range of enterprises associated with the production, processing and service activities for food, fiber and mineral products. The state’s sub-tropical climate and abundant water resources provide a comparative advantage for the production of high-value crops such as citrus, vegetables, ornamental plants and sugar.
The state is also a leading producer of forest products, livestock and animal products, seafood and phosphatic fertilizers.
“Florida’s total land area is nearly 54,000 square miles, and the state has more than 42,000 square miles, or 72 percednt of the total area, in agricultural and forestry land producting fruits, vegetables, ornamental plants, dairy and meat products, forest products and seafood — plus an array of industries that provide supporting inputs and services,” Mulkey said.
Overall, these industries generated nearly $62 billion in output impacts, including $31 billion in value-added impacts. These industries supported 648,55 jobs that generated $19 billion in labor income. State and local governments received almost $3 billion in indirect business taxes for state and local governments.
For the economic analysis, the state was divided into eight regions that included a core metropolitan area and surrounding counties defined by employee commuting patterns. The value of each region’s impact is influenced by the number of counties included, population levels, size of metro areas, and the size and scope of its economic activity.
In the first tier, the regional economic impacts were greatest in the Orlando area with $16.9 billion, followed by the Miami/Fort Lauderdale area with $15.8 billion. In a second tier of regions were the Tampa/Saint Petersburg area with $9,5 billion and the Jacksonville area with $7.6 billion in total output impacts.
A third tier of regions included the Sarasota-Bradenton area with $3.7 billion, the Tallahassee area with $2.6 billion, the Pensacola area with $2.4 billion and southwest Florida with $2.1 billion in total output impacts.
The 14 largest counties contain 67 percent of the state’s population and account for most of the agricultural production.
“The total value-added impact of agriculture and natural resources in Florida was $1,929 per capita, and the total employment impact was 40 jobs per 1,000 residents,” Hodges said. “Economic impacts on a per-capita basis and share of gross regional product indicated that the agriculture and natural resource industries were relatively more important in the Orlando, Jacksonville, Sarasota-Bradenton and Tallahassee regions than for the state as a whole.”
In addition to measuring the economic impact in eight different regions, the study also looked at the total economic impact of various commodity categories statewide.
“The fruit, vegetable and ornamental plant industries are concentrated in the southern half of the state, where mostly frost-free winters provide a comparative advantage for production of cold-sensitive crops,” Hodges said.
“The northern part of the state is dominated by industrial forestry plantations and traditional agronomic crops that can provide a reasonable return for lands that have very low native fertility,” he added. “The interior portion of the peninsula has extensive beef and dairy cattle herds, and large phosphate mining operations. The coastal areas have important natural fisheries and aquaculture businesses.”
The impacts of 12 different industry groups range from $13 billion for fruits and vegetables to $800 million for field crops.
Fruit and vegetable production, which accounted for 21 percent of the total output impacts, generated more than 133,000 jobs and contributed more than $450 million in indirect business taxes.
Forest products, with a total economic impact of $8.6 billion statewide, comprised 14 percent of the total. The forestry industry employed 67,000 people and generated $277 million in taxes.
“Other food and fiber manufacturing contributed $8.2 billion to the Florida economy, supporting 53,000 jobs and contributing more than $400 million in indirect taxes.
Agricultural inputs, which include items such as farm chemicals and fertilizers, have a total economic value of $7 billion, or 11 percent of the total. The category supported 107,000 jobs and indirectly generated $216 million in taxes.
Environmental horticulture produced $6.9 billion in output impacts, employing 132,000 people and generating $214 million in taxes.
Smaller industry groups, those below $6 billion, accounted for nearly one-third of agriculture’s total economic impact on the Florida economy. These industries included mining, sugar and confectionary products, tobacco, livestock and meat products, dairy, seafood and field crops such as peanuts, corn and soybeans, which generated a total of 152,000 jobs and yielded $1.2 million in business taxes.
For the study, Mulkey and Hodges created economic models for each region and estimated total economic impacts of more than 100 industry sectors in agriculture, natural resources and associated value-added manufacturing.
“We used the Implan Pro system, which consists of a database and software components that provide economic and socio-demographic profiles for all U.S. counties across 528 economic sectors,” Hodges said.
“Multipliers from Implan measure output, total value added, employment, employee compensation, personal income, other proprietary income and indirect business taxes.”
The system was developed by the U.S. Department of Agriculture’s Forest Service in 1979 and commercialized by the Minnesota Implan Group (MIG, Inc.) in 1993.