A recently released University of Arizona study has concluded that agriculture and its related industries contribute $9.2 billion a year to the Arizona economy.
The study, which examined statistics from 2004, found a 40 percent increase in direct and indirect economic output from a previous study by the university that used figures from the year 2000.
The university’s Department of Agricultural and Resource Economics also found that the state’s agricultural industry employed 74,500 people in 2004, compared to 73,000 in 2000.
Kevin Rogers, president of the Arizona Farm Bureau, welcomed the report.
“These new figures directly link agriculture as a major player in the prosperity of local and state economies,” he said. “We deserve respect for our efficiencies, productivity and value.”
The study states that higher prices for milk and beef, increased milk production, and the increased value of vegetables are responsible for the $2.6 billion increase between the two studies.
Don Butler, executive director of the Arizona Department of Agriculture, attributes rising milk prices to higher demand.
Supply of milk is has also increased. Arizona dairies are growing larger and out-of-state dairies are moving into the state. An increased production with stable consumer demand would usually have the effect of lowering prices, but demand remains strong, he said.
Demand and supply for beef is up, but the gains reported in the study could still be bigger, said Bas Aja, president of the Arizona Cattlemen’s Association.
The price of cattle is only starting to rebound from the effects of a drought that started during the mid-1990s. Also, Arizona is somewhat lucky because it is a niche market for the Holstein variety of cow that is typically heavier than most breeds. This has the effect of producing greater amounts of beef, he said.
Moreover, feedlots are getting larger and meat packing capacity is growing, while the beef market has become so global and large an increased production in Arizona will not have a significant effect on prices, he said.