The Economic Impact of Cows and Crops in Eastern OregonAugust 8, 2019 Recently released county level data from the 2017 Census of Agriculture provides an updated look at the scope of agriculture in Eastern Oregon (Baker, Grant, Harney, Malheur, Morrow, Umatilla, Union, and Wallowa counties). 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 gathers details on everything from mega farms to 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. These details help reveal changes in agricultural activity and help shed light on employment trends in the region.
Eastern Oregon Has Cattle…Lots of Cattle
Eastern Oregon’s 6,042 farms and ranches (hereafter referred to as farms) accounted for just 16 percent of all Oregon farms in 2017: 1.0 percentage point less than in 2012. This might seem like a low share of farms given that Eastern Oregon accounts for roughly 40 percent of the state’s total land mass. However, the sparsely populated region (4.5% of Oregon’s population) lends to a high share of large farms. While just 17 percent of all Oregon farms in 2017 were 180 acres or larger, 39 percent of Eastern Oregon farms were 180 acres or larger. In addition, Eastern Oregon contained one-third of Oregon’s 500 to 999 acre farms and half of farms with 1000 or more acres.
Altogether, the region’s eight counties accounted for nearly 47 percent (7.4 million acres) of Oregon’s total farmland. The region’s share of farmland rose by 1.8 percentage points since 2012 as Oregon lost 340,000 acres of farmland and Eastern Oregon gained 131,000 acres of farmland.
Livestock continues as the region’s primary focus. The majority of farms specialize in producing livestock, producing feed for livestock, or producing both. Half of Eastern Oregon farms are in cattle and calf production; 43 percent of farms are in beef cow production. Throughout the region farms also produce horses, pigs, sheep, goats, bison, llamas, and other animals. And with so many mouths to feed, feed is a primary concern. Pastureland accounted for more than 5 million farmland acres in Eastern Oregon and 40 percent of the region’s 1.3 million harvested crop acreage was hay or haylage. Total hay production was close to 1.5 million acres. Outside of hay, the bulk of crop production was concentrated in grain (primarily wheat and corn), onions, potatoes, and peas.
Market performance in 2017 saw Eastern Oregon harvest one-third ($1.6 billion) of Oregon’s $5.0 billion in agriculture sales. The region’s farms accounted for nearly half ($828 million) the total value of livestock sales, producing over half of all beef cows in the state and just over half of all cattle and calves: 287,495 beef cows and 637,624 cattle and calves. Adjusted for inflation, the value of livestock sales increased 1.9 percent in Eastern Oregon from 2012 to 2017. Sales increased 8.8 percent not adjusted for inflation.
Crop sales for the region totaled $778 million: one-fourth of the state’s total value for crop sales. Adjusted for inflation, the value of crop sales in Eastern Oregon fell by 20.1 percent from 2012 to 2017. Sales decreased 14.7 percent not adjusted for inflation. The size of the decrease is likely tied to lower grain and hay prices in 2017 along with some corresponding decreases in production.
Cows and Crops Create Employment and Wages
Although drones, robotic harvesting, and even autonomous vehicles continue to grow as a resource for the production of agriculture, Ag production is still labor intensive. Employment data from 2018 for farm workers covered by unemployment insurance reveals how raising cows and crops translates directly to employment and wages. Crop and animal production accounted for 7.4 percent of private-sector employment and 7.0 percent of private-sector wages in 2018. This share of employment dropped slightly since 2012 (-0.2 percentage point) while the share of wages inched higher (+0.1 percentage point). Rather than a loss of employment, the decrease in share was due to gains in other private-sector industries outpacing gains in agriculture. Agriculture actually continued to gain since 2012, adding 321 jobs to reach 4,150 in 2018. Wages rose $37.2 million to reach $147.3 million: a 25.3 percent gain after adjusting for inflation.
Eastern Oregon’s crop production employment continues to outweigh animal production employment by a factor of 2.6 to 1. Animal production, however, continues to close the gap. For every one job added in crop production since 2012, there were nine jobs added in animal production. Since employment in crop production remained relatively stagnant for the five-year period, adding just 32 jobs, the industry’s share of private-sector employment and wages declined. Crop production provided 5.9 percent of private-sector employment and 5.2 percent of private-sector wages for the region in 2012. That slipped to 5.3 percent of private-sector employment (3,002 jobs) and 4.9 percent of wages ($103 million) in 2018. Animal production on the other hand added 289 jobs for the period. The industry grew from 1.7 percent of both private-sector employment and wages in 2012 to 2.0 percent of private-sector employment (1,148 jobs) and 2.1 percent of wages ($44 million) in 2018.
Few private-sector industries surpassed the share of employment and wages that crop and animal production contributed to the region’s economy in 2018. Manufacturing, retail trade, and education and health services each accounted for a larger share; 15.0 percent to 16.0 percent of Eastern Oregon’s private-sector employment and 11.0 percent to 18.0 percent of private-sector wages. While leisure and hospitality accounted for 11.0 percent of private-sector employment, only 5.0 percent of private-sector wages came from the industry. In addition, construction, wholesale trade, financial activities, other services, and professional and business services each provided a smaller share of both private-sector 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
In 2017, farms in Eastern Oregon dished out roughly $1.5 billion in total operating expenses: one-third of the total for Oregon overall. Hired labor, or jobs in crop and animal production, accounted for just 11.5 percent of farm expenses. However, operating expenses also generate an abundance of jobs that are tied directly to, but not necessarily in agriculture. Ag production supports firms in several other 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 270 firms in Eastern Oregon depend on the region’s agriculture activities in order to continue operations. These firms provide sales and services for, or purchase products from local agriculture markets and operate in the following industries: agriculture support activities, wholesale trade, retail trade, transportation and warehousing, food manufacturing, and other services. They have a combined average annual employment of roughly 9,000, or 16.0 percent of the region’s total private employment. When combined with the number of jobs in crop and animal production, this means that agricultural activities directly supply nearly one-fourth of Eastern Oregon’s private-sector employment. The wages these workers earn and spend help feed the region’s economy. In turn, agriculture indirectly supports other industries such as restaurants, retail, and real estate.
Agriculture Is Symbiotic
The average annual wage for crop and animal production combined was $35,500 in 2018. This was less than the average annual wage for all private-sector industries ($37,600) and below middle of the pack when ranking the broad private sectors. Individually, crop production had an annual average wage of $34,300 and animal production had a wage of $38,600. Agriculture’s average wage was much larger than the average annual wage for retail trade ($27,500) and for leisure and hospitality ($16,600), two industries in the region with large employment numbers and high 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. These four counties had 1,915 fewer crop production jobs during the winter low point in 2018 than they did during the summer high point (based on covered employment data). Workers who fill seasonal positions often work outside of agriculture during the off-season. Many of these workers likely work in other industries where employment and income levels are also prone to seasonal fluctuations. Whether seasonal agriculture is a primary job or a side gig, wages earned can serve to pad paychecks in preparation for leaner times.
Aside from seasonal workers, a large number of principal farm operators (and/or their spouses) find primary or secondary employment off the farm in order to support or supplement their agricultural endeavors. Roughly 38 percent of principal producers in
Eastern Oregon reported working 200 or more days off the farm in 2017. This is likely because 70 percent of the region’s farms reported total sales of less than $50,000 and 64 percent reported sales of less than $25,000.
The rural lifestyle is very attractive. Open spaces and slower paces invite visitors and residents to remain. Agriculture helps to maintain the rural lifestyle by infusing the economy with employment and wages; creating a market for firms to do business in support of agriculture; and sharing 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 the economy.
Agriculture Nourishes the Region
Just under one-fourth of private-sector employment came directly from two linked sources in Eastern Oregon in 2018: firms that engage in crop and animal production, and firms either wholly or largely dependent on agricultural production. Crop and animal production supplied 7.4 percent of private-sector employment and 6.9 percent of private-sector wages. This makes agriculture a top industry. The overall impact of agriculture, however, is even more substantial due to how agriculture directly and indirectly nourishes the economy.