AnEvaluationofDirectandIndirectEconomicLossesIncurredbyGeorgiaFruitandVegetable ProducersinSpring2011APreliminaryDataAnalysisandSummaryWorkingPaper JohnC.McKissickandSharonP.Kane DistinguishedProfessorofAgriculturalMarketingEmeritusandPublicServiceAssociate TheUniversityofGeorgiaCenterforAgribusinessandEconomicDevelopment Introduction Duringthespringof2011,numerousagriculturalbusinessesinGeorgiareportedlaborshortages.A surveyconductedbytheGeorgiaDepartmentofAgriculturereportedashortageofmorethan11,000 jobsduringthistimeperiod.Thesituationappearedmostacuteinthoseperishablefreshfruitand vegetablecropsjustreachingharvestinspringtoearlysummer.Thesecropsaremostdependenton timelyseasonalharvestandpackinglaborinordertomarketperishable,highvaluedproducts.This reportprovidesapreliminarysummaryandanalysisofthemagnitudeandeconomicimpactactually reportedbyproducersofsevenprimaryGeorgiaberryandvegetablecrops.TheGeorgiaBlueberry, Blackberry,Vidaliaonion,BellPepper,Squash,CucumberandWatermeloncropsaccountedformore than$578milliondollarsofproductionvaluein2009.

.Thisreportsummarizesacomprehensivesurvey conductedbytheGeorgiaFruitandVegetableGrowersAssociation(GFVGA)inthesummerof2011to ascertainthemagnitudeandeconomicconsequenceactuallyexperiencedduringthespringcrop growingseason.Theauthorsutilizethedataandprovideanalysisofthereportedlossesincurred directlybygrowersandtheresultingimpactsinthecommunityandstateasaresultofthespringlabor situation. SurveyResponse AsurveyinstrumentwasdevelopedbytheGFVGAinconsultationwithmajoragriculturalorganizations, commodityleadershipandUGAAgriculturaleconomists.TheGFVGAsurveywasmadeavailablevia electronicandhardcopysurveyinstrumenttoGeorgiagrowersofthesevenprimarycropsduringAugust 2011.FollowupinterviewswereconductedforincompletesurveysbyGFVGAstaff.Allrawdata collectedabsentanyrespondentidentificationwasprovidedtoeconomistsattheUGACenterfor AgribusinessandEconomicdevelopmentforanalysisandsummary.Asthefollowingtableshows, significantamountsofthetotalestimatedacreageasreportedintheUGA2009FarmGateValueReport ofthe7cropswererepresentedinthesurveyresponse.189respondentsrepresentinganaggregateof 31,311acresofthe67,513acresor46.4%ofthetotalGeorgiaproductionacreagecompletedand submittedsurveys.Ofthetotalresponses,41oftherespondents,representing19.7%ofthesurvey productionacreageand9.1%ofGeorgias2009acreage,respondedtheydidnotexperience harvest/packinglaborshortages.148surveyrespondentsreportedtheyhadexperiencedlabor shortage,representing80.3%ofthesurveyproductionacreageand37.3%ofGeorgias2009acreage.It isapparentthatasignificantnumberofGeorgiasspringBerryandVegetableproducersexperienced laborshortagesinthespringof2011.

Table1.SummarySurveyTablewithEstimatedAcreagebyEachCropandTotals
Total CROP Blueberries Blackberry VidaliaOnion BellPepper Squash Cucumber Watermelon GRANDTOTAL SurveyCompleted Totalacres(2009) TotalAcresinsurvey %oftotalacresinsurvey SurveyCompleted Totalacres(2009) TotalAcresinsurvey %oftotalacresinsurvey SurveyCompleted Totalacres(2009) TotalAcresinsurvey %oftotalacresinsurvey SurveyCompleted Totalacres(2009)* TotalAcresinsurvey %oftotalacresinsurvey Spr5,130A Fall3,420A SurveyCompleted Totalacres(2009)* TotalAcresinsurvey %oftotalacresinsurvey Spr2,922A Fall1,948A SurveyCompleted Totalacres(2009)* TotalAcresinsurvey %oftotalacresinsurvey Spr5,254A Fall3,502A SurveyCompleted Totalacres(2009) TotalAcresinsurvey %oftotalacresinsurvey SurveyCompleted Totalacres(2009) TotalAcresinsurvey Percentsurveyoftotal acres Percentofsurveyacres Percentofsurvey responses #/Acres/% 92 16,346 7,659 46.9% 13 630 502 79.7% 18 12,993 9,033 69.5% 20 5,130 2,552 49.7% 14 2,922 1,515 51.8% 12 5,254 2,510 47.8% 20 24,238 7,540 31.1% 189 67,513 31,311 46.4% 100.00% 100.00% Nolaborproblem #/Acres/% 27 1950 11.9% 4 120 19.0% * 1985 15.3% * 50 1.0% * 190 6.5% 0 0 0.0% 6 1860 7.7% 41 6155 9.1% 19.66% 21.69% Yeslaborproblem #/Acres/% 65 5709 34.9% 9 382 60.6% * 7048 54.2% * 2502 48.8% * 1325 45.3% 12 2510 47.8% 14 5680 23.4% 148 25156 37.3% 80.34% 78.31% AnsweredLabor Production Question #/Acres/% 54 5192 31.8% 9 382 60.6% 15 6223 47.9% 17 2312 45.1% 10 970 33.2% 9 2100 40.0% 12 5645 23.3% 126 22824 33.8% 72.89% 66.67%

*Undisclosedcategorydueto2orfewerresponses.

EconomicConsequences Utilizingthedetailedhistoricaland2011productionandcostdatasuppliedbythesurveyrespondents, theauthorscalculatedproductionlossesorgainsincurredbythesurveyrespondentsandthose attributedtolaborforthesevenspringcrops.Multiplequestionsallowedforconsistencychecksacross thedataasdidthehistoricalyieldandpricedata.Losscalculationswerederivedfromexpectedyield andpricequestionsandcomparedtoactualproductionrealizedfromtheacreageavailableforharvest. Questionspertainingtotheamountofproductionunharvestedoracreagethatwentunharvested allowedforcalculatedlossesattributeddirectlytoharvest/packinglaborshortfalls.Inaddition,thetotal numberofharvesterand/orpackingjobsduringpeakharvestascomparedtonormalpeakharvest employmentallowedforcalculationoftotalemploymentshortfalls.Thefollowingtablesummarizesthe calculatedlossesbycrop. Table2.CalculatedSurveyLossSummarybyCrop Blueberries Blackberries TotalforBerries Watermelon Cucumbers BellPeppers Squash Onions TotalforVegetables OverallTotal CalculatedProductionLosses RelatedtoLaborShortage $ 29,051,947 4,027,125 33,079,072 2,592,230 5,932,600 15,115,645 1,948,629 16,312,345 41,901,449 74,980,521 PeakHarvestLaborShortage Reported #jobs 1,932 300 2,232 305 806 948 118 835 3,012 5,244

Accordingtotheinformationderivedonlyfromthesurveyrespondents,producerswhocompleted productionorlaborlossestimatesdirectlyattributabletoharvestandpackinglaborshortageshada totalcalculatedvegetablelossof$41.9millionandberrylossof$33.1millionforatotalof$75millionin thesevenspringcrops.IFthesurveyrespondentsarerepresentativeofnonrespondents,thetotalloss attributedtolaborinthesevencropswouldbeabout$140millionbasedonlossperacrepercropas thetotalresponserepresents46.4percentageofthetotalestimatedcropacreageinthesevencrops. Thesurveyrespondentsreportedashortageof5,244workersatpeakharvestseasonor40.5%oftheir normalpeakharvestemploymentof12,930workers.

EconomicImpactonGeorgiaandLocalCommunities Lostfruitandvegetableproductioninthestatein2011resultedinlossesnotonlytotheproducers involvedbuttoinputsupplierstotheproducersaswellasthosewhobenefitindirectlyfromthe expendituresthatwouldhavebeencreatedinthestateandlocalcommunities.Amulticountyand statemodelofallthebusinessandinteractionsofconsumersandbusinesswasformulatedtoestimate theimpactsofthereportedlossesexperiencedbythesevenspringcropsinGeorgia.Resultsindicated thatonanannualbasisthe$41.9millioninlostvegetableproductionduetolaborshortagesresultedin another$56.1milliondollarslostinothergoodsandservicesinGeorgiaseconomyforatotaleconomic impactofabout$98million.Thetotalof$33.1millioninberryproductionlostduetoinadequatelabor resultedinanother$50.4millionforatotalimpactof$83.5million.ThetotalGeorgiavegetableand berryeconomicimpactscalculatedfromthelaborrelatedlostproductionreportedinthesurveywere estimatedtobeover$181millionlessintotalgoodsandservicesproduced. Thesocalledmultiplierimpactsoccurasthemoneynormallygeneratedfromthefruitandvegetable productionwasnotspentonpurchasingothergoodsandservices.Forinstance,notonlywouldthe inputsupplierssufferlostsales,butsowouldalltheretailbusinessesthatwouldhavehadcustomers fromthoseemployedbythefruitandvegetableproducersandsuppliers.Theimpactsreachfurther intotheeconomyastheretailersthenultimatelypurchaselessfromothers.Onandontheimpactsspin throughthestateandregionseconomy,resultinginfewergoodsandservicesorstateoutputproduced inamultitudeofindustriesandbusinessnotdirectlyassociatedwithfruitandvegetableproduction. Thelostoutputresultsinfewerjobsinproducingnotonlythefruitandvegetables,butinthose supplyingotherinputsthatarenolongerneededandthebusinessessellingproductstotheworkers. Thetotaljoblossinafulltimeannualequivalentjobbasiswasfoundtobe572jobslostdirectlyinthe productionandanother940inrelatedbusinesses.Thus,thetotalimpactresultingfromthelabor relatedlostproductionasreportedfromthesurveyrespondentswouldbethelossof1,512fulltime jobsinGeorgiaperyear.Theseresultsshouldbeinterpretedtomeanthatoverafullproductionyear, theimpactsofthereportedlostproductioninthesurveywouldhavethecalculatedimpactson Georgiaseconomy. Table3.EstimatedFullYearEconomicImpactsofLostLaborRelatedBerryandVegetableProduction, SurveyResponseOnly,Spring2011
ImpactandArea ValueofOutputperYear ($) FulltimeJobsPerYear(#) Direct Indirect Total Direct Indirect Total BerriesStatewide $33,079,072 $50,425,012 $83,504,084 270 452 722 VegetablesStatewide $41,901,449 $56,099,859 $98,001,308 302 488 790 TotalBerry&VegStatewide $74,980,521 $106,524,871 $181,505,392 572 940 1,512 BerryProductionCounties $33,079,072 $34,802,037 $67,881,109 243.3 374.9 618 VegetableProd.Counties $41,901,449 $35,502,846 $77,404,295 284.4 379.4 664 TotalBerry&VegProd.Area $74,980,521 $70,304,883 $145,285,404 528 754 1,282 BerrycountiesSEGa.,4VegetableCropsSWGa.PlusOnionsSEGa.=Veg.CountyArea LostProductionRelatedtoLabor,GFVGASurveyof7SpringFruitandVegetableCrops

Themultiplierimpactsarealsokeenlyfeltonthelocallevel.Theproductioncountiesforallthe vegetablescrops,withtheexceptionofonions,areintheSouthwestcountiesofthestate.Berryand OnionproductionareintheSoutheastpartofthestate.Inordertoillustratetheimpactsonthelocal countiesofproduction,regionalmodelsofSouthwestandSoutheastGeorgiacountieswereestimated toillustratethecommunityimpacts.Ascanbeseenfromthetable,thelocalcommunitiessuffermost oftheimpactwithallthedirectimpactoccurringlocallywithanadditional$70.3millionoccurringin indirecteffectsforatotalcommunityimpactofover$145million.Infulltimeannualequivalentjob units,thedirectimpacttothelocalcommunityisareductionof528fulltimejobsperyear.An additional754inrelatedjobsarelostduetoreducedoutputandthusfewerjobsgenerated.Thetotal impactinjoblossisfoundtobeabout1,282fewerjobsinthelocalproductionareaasaresultofthe lostoutputreportedbyproducersinspring2011duetothelaborsituation. Theresultsinalltheimpacttablesarebasedonlyontheresultsfounddirectlyfromthesurvey.IFthe surveywererepresentativeofallofGeorgiassevencropsacreagestudied,thentheresultsfromthe impactanalysiscouldbescaledtoreflecttheoverallimpactoftheapproximately53.6%ofGeorgia acreagenotaccountedforinthesurvey.Theimpacttablesshowthatforeach$1millionlostinberry productionthereisanadditional$1.4millionoflostoutputandabout20lossjobs.Each$1millionin vegetablesresultsinanadditionalindirectimpactof$1.34millionandthelossofabout19totalfulltime jobs.Forexample,IFthesurveyresultswererepresentativeofallacreage,thetotalyearlyimpact wouldbeabout$391millionandthejoblosswouldbeabout3,260onastatewidebasis.However,no dataexisttodeterminehowrepresentativethesurveyedacreageisofthetotalacreage.Thesurvey doesrepresentadetailedanalysisofaverylargepercentageofthesevenberryandvegetablecrops. Sincethelaborshortagebecameapparenttoproducersafterproductionplansandpreharvestinputs werepurchasedandused,asecondmodelwasestimatedtoaccountforthespinoffimpactsofthepost harvest/packinginputsalone.Thelossoutputreportedfromthesurveywasreducedbytheratioofpre harvesttopostharvestexpensesandresultedinthefollowingimpacts.Thetableresultscanbe interpretedtorepresentanapproximationoftheeconomicimpactsoccurringinthepartialproduction yearof2011.However,iftheresultsarerepeatedinfollowingfullyears,theimpactsofthefull productionyearmodelwouldbefelt. Table4..EstimatedPartialProductionYearEconomicImpactsofLostLaborRelatedBerryand VegetableProduction,SurveyResponseOnlySpring2011
ImpactandArea ValueofOutputperYear ($) FulltimeJobsPerYear(#) Direct Indirect Total Direct Indirect Total BerriesStatewide $22,861,808 $34,850,038 $57,711,846 187 312 499 VegetablesStatewide $19,625,942 $26,276,243 $45,902,185 142 228 370 TotalBerry&VegStatewide $42,487,750 $61,126,281 $103,614,031 328 541 869 BerryProductionCounties $22,861,808 $24,052,595 $46,914,403 168.2 259.1 427 VegetableProd.Counties $19,625,942 $16,663,650 $36,289,593 133.6 177.9 312 TotalBerry&VegProd.Area $42,487,750 $40,716,245 $83,203,996 302 437 739 BerrycountiesSEGa.,4VegetableCropsSWGa.PlusOnionsSEGa.=Veg.CountyArea PartialYearOutputassumedfromthereportedLaborRelatedProductionLossAdjustedbyCropsPreHarvestto PostHarvestExpenseRatio

 Inanefforttodeterminewhatthelongertermorfullyearimpactsmaybe,thesurveyaskedhow producers2012productionmaybeimpactedbythelaborsituationexperiencedin2011.Thetable belowshowsthatwhilemostrespondentstothequestionindicatedtheywouldtrytomaintain production,asignificantnumberofvegetableproducersplannedcuts.Yearlyplantedannualcrops suchasvegetablescanmoreeasilybealteredthancanperennial,multiyearcropssuchasthose producedfromberrybushes.However,evenberryproducersindicatedplannedchangesinproduction andharvest/packingmethodsifthelaborexperienceof2011islikelyrepeatedin2012. Table5.Summaryof2012IntentionsbyCrop CROP Blueberries Blackberries Total Berries Percent of Growers Total Number 65 9 74 55% Response to Q 36 5 41 15% Plans for spring 2012 Acres Increase Maintain Decrease 6 0 6 65% 26 1 27 20% 4 4 8 Avg % decrease 35% 57%

Bell Pepper Cucumbers Squash Vidalia Onions Watermelons Total Vegetables Percent of Growers

10 12 12 17 14 65 72%

13 8 8 13 5 47 2%

1 0 0 0 0 1 45%

7 4 5 5 0 21 53%

5 4 3 8 5 25

55% 35% 30% 40% 35% 39%