Wednesday, November 4, 2015

Reviewing the 2012 Agricultural Census for Castle Country


Scott Smith, Regional Economist

The 2012 Census of Agriculture is just that — a census. It is an attempt to count an entire population and generally does not use sampling or statistical techniques to make conclusions. It is conducted every five years and includes all farm operators regardless of whether farming is their primary or secondary occupation. Operators and hired laborers are combined for a total count. There can be a maximum of three operators per farm, but labor hired on a contract basis is not covered.

Castle Country agriculture is focused on the production of livestock and associated feedstock. Almost 90 percent of Carbon County agricultural land is classified as pasture and rangeland. Emery County is a bit different. It is just over 50 percent pasture and rangeland, and 26 percent cropland. The remainder is woodland and other. 2012 net cash income per farm for the two counties was $1.4 million and $140,000 respectively. The bulk of the region’s farms have total annual sales of less than $250,000.

Castle Country farm employment in the 2012 census was 1,944. As noted above, the census counts workers whose primary and secondary source of income is agriculture. Additional data sources reveal that the vast majority of the Castle Country farm workforce has primary jobs outside of agriculture. The size and composition of the agricultural workforce has changed markedly over time. In 2002, the total labor force was 1,732 of which 37 percent was hired labor. The total agricultural workforce increased by 11 percent by 2007 to 1,914, but the number of hired laborers actually declined to 29 percent. The analogous figures for 2012 are 2 percent and 24 percent.

There is an obvious trend away from hired employment. The reason for this can be gleaned from expense data. In 2002, the labor cost per worker (as defined by dividing annual labor expense by the hired workforce) was $2,690. In 2007, the cost had risen 27 percent to $3,320. In 2012, this number had increased by 21 percent to $4,140. In contrast, inflation increased by 15 percent and 9 percent respectively, as of the 2007 and 2012 censuses. Faced with higher real (inflation adjusted) labor costs, operators appear to have substituted to their own labor or made investments in capital goods.

The number and character of Castle Country operators has displayed an interesting combination of volatility and adherence to the trend. There were 724 principal operators in the Castle Country in 2002 (the statistics refer to “principal” operator and therefore will not agree with other totals). The number of operators increased by 23 percent to 887 operators in 2007, and then remained essentially unchanged as of the 2012 count. Similarly, in 2007, the proportion of operators who rely on other sources of income shot up to 68 percent from 55 percent in 2002. The share returned to 55 percent in the 2012 census.

Analysts speculate that the changes are in response to fluctuations in farm income. In 2002, net cash income per operator was $2,887. Operators suffered a loss of $484 in 2007, and generated a gain of only $345 in 2012. Farming takes some capital investment, and the proprietorship of an ongoing enterprise is somewhat “sticky” — operators are loath to walk away from their investments. Presumably, the large gains generated in 2002 attracted market participants who stayed around to experience a loss in 2007. That loss and the rather meager gain generated in 2012 were insufficient to attract any more participants into the industry. Similarly, the losses generated in 2007 made it necessary for some operators to seek other sources of income. The small gain of 2012 was sufficient to reduce the share of “full time” operators back to its historic norm.