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Texas Agriculture Archive

July 2, 2004

Texas Agriculture:
A short-term forecast

Region

Agriculture
RGP
2003
Agriculture
RGP
2008
Agriculture
CAGR
2003-2008
Agriculture
% of Region
Total RGP
in 2008
Texas
$11,834.07 mln
$13,621.36 mln
2.85%
1.54%
High Plains
$4,483.73 mln
$5,164.19 mln
2.87%
19.27%
Northwest Texas
$149.90 mln
$172.07 mln
2.80%
1.28%
Metroplex
$1,232.94 mln
$1,422.12 mln
2.90%
0.47%
Upper East Texas
$1,302.60 mln
$1,499.78 mln
2.86%
5.62%
Southeast Texas
$457.89 mln
$527.35 mln
2.86%
2.90%
Gulf Coast
$1,444.65 mln
$1,656.14 mln
2.77%
0.65%
Capital
$279.20 mln
$322.51 mln
2.93%
0.47%
Central Texas
$399.70 mln
$459.54 mln
2.83%
1.82%
Alamo
$436.68 mln
$503.04 mln
2.87%
0.77%
Coastal Bend
$742.49 mln
$854.54 mln
2.85%
4.29%
South Texas
$700.72 mln
$805.87 mln
2.84%
3.51%
West Texas
$125.74 mln
$144.94 mln
2.88%
0.93%
Upper Rio Grande
$77.83 mln
$89.29 mln
2.78%
0.48%
         
Table 2

Metro area

Ag Jobs 2003
Ag Jobs 2008
Ag % of
Jobs 2003
Ag % of
Jobs 2008
Austin-San Marcos
6,550
6,975
0.94%
0.90%
Dallas
19,075
20,350
0.94%
0.90%
El Paso
1,900
2,025
0.68%
0.90%
Fort Worth-Arlington
7,650
8,125
0.94%
0.65%
Houston
20,125
21,275
0.91%
0.88%
San Antonio
6,700
7,125
0.82%
0.79%
Abilene
1,000
1,050
1.62%
1.57%
Amarillo
1,200
1,250
1.17%
1.13%
Beaumont-
Port Arthur
1,250
1,325
0.75%
0.73%
Brazoria
1,275
1,350
1.51%
1.46%

Brownsville-Harlingen-
San Benito

2,150
2,275
1.69%
1.61%
Bryan-
College Station
775
825
0.94%
0.90%
Corpus Christi
2,100
2,250
1.18%
1.14%
Galveston-
Texas City
700
750
0.76%
0.74%
Killeen-Temple
900
950
0.58%
0.56%
Laredo
400
450
0.52%
0.50%
Longview-Marshall
950
1,025
0.97%
0.94%
Lubbock
1,650
1,750
1.33%
1.28%
McAllen-Edinburg-Mission
6,100
6,525
3.24%
3.13%
Odessa-Midland
750
775
0.66%
0.64%
San Angelo
825
875
1.62%
1.57%
Sherman-Denison
500
525
1.10%
1.07%
Texarkana
450
475
1.07%
1.03%
Tyler
1,500
1,575
1.64%
1.59%
Victoria
375
400
0.94%
0.91%
Waco
1,125
1,200
1.08%
1.05%
Wichita Falls 650 675 0.93% 0.90%
650
675
0.93%
0.90%
         

Agriculture

Agriculture Agriculture Agriculture % of Region

RGP RGP CAGR Total RGP

Region 2003 2008 2003-2008 in 2008

Texas $11,834.07 mln $13,621.36 mln 2.85% 1.54%

High Plains $4,483.73 mln $5,164.19 mln 2.87% 19.27%

Northwest Texas $149.90 mln $172.07 mln 2.80% 1.28%

Metroplex $1,232.94 mln $1,422.12 mln 2.90% 0.47%

Upper East Texas $1,302.60 mln $1,499.78 mln 2.86% 5.62%

Southeast Texas $457.89 mln $527.35 mln 2.86% 2.90%

Gulf Coast $1,444.65 mln $1,656.14 mln 2.77% 0.65%

Capital $279.20 mln $322.51 mln 2.93% 0.47%

Central Texas $399.70 mln $459.54 mln 2.83% 1.82%

Alamo $436.68 mln $503.04 mln 2.87% 0.77%

Coastal Bend $742.49 mln $854.54 mln 2.85% 4.29%

South Texas Border $700.72 mln $805.87 mln 2.84% 3.51%

West Texas 125.74 mln $144.94 mln 2.88% 0.93%

Upper Rio Grande $77.83 mln $89.29 mln 2.78% 0.48%

By
Dr. M. Ray Perryman

Historically, the agriculture industry has been an important element in the growth and development of the Texas economy. The number of people engaged in farming, ranching, commercial fishing, forestry, hunting and trapping, and related services across the Lone Star State is currently about 150,000, which is some 25,000 more than were involved 20 years ago. About 39.87 percent or 58,700 of these workers are in non-metropolitan statistical areas.

Recently released data indicates that Texas is the nation's leader in sales of cattle and calves, poultry, sheep and wool, and goats and mohair. The state also ranks second in the total market value of agricultural products sold. The growing demand for agricultural products around the world as reflected by the significantly increasing role they are playing in U.S. exports suggests the potential for the expansion of the Texas agriculture industry. The agriculture real gross product (RGP or output) of $11.83 billion in 2003 is expected to experience a 2.85 percent compound annual growth rate over the 2003-2008 timeframe and exceed $13.62 billion in 2008. Even so, the percentage of RGP contributed to the state's total output will likely decrease from 1.65 percent in 2003 to 1.54 percent in 2008.

The agricultural RGP expansion and annual growth rates forecast for Texas' 13 economic regions, which cover the entire state, from 2003 to 2008 are noted in Table 1 as are forecast percentages of each region's total RGP to be provided by agriculture in 2008. Pertinent Texas data is also provided in Table 1.

The number of agriculture-related jobs across the state is approximately 1.47 percent of all Texas employment. Although a gain of nearly 9,300 agricultural workers is projected from 2003 to 2008, the percentage of jobs in the agricultural industry compared to total Texas employment will likely drop to about 1.42 percent. In 2008, the number of Texans involved in agriculture-associated activities is predicted to be around 156,600. Some 60.12 percent, or 94,100, of these people will be employed in Texas' 27 metro areas, which encompass 48 counties and represent about 20 percent of the area of the state.

The predicted agriculture-related employment for the metropolitan statistical areas for 2003 and 2008 and the percentage that agriculture will account for in 2003 and 2008 are noted in Table 2.

There are approximately 230,000 farms and ranches across the state occupying 131 million acres. Over 3,900 of them have been in continuous agricultural operation by the same family for more than a century. More than half of the owners consider farming or ranching as their principal occupation.

The average farm size is about 570 acres with a third of the state's farmers and ranchers operating on less than 50 acres. Only about 10 percent have 1,000 or more acres. Over two-thirds of all farm operations have gross sales of less than $10,000 a year.

These farms, incorporating 17 percent of the total farm acreage in Texas, account for 3 percent of aggregate sales. The 7,000 operations with over $250,000 in sales, some 3 percent of all farms, occupy 30 percent of the farmland.

To accommodate new landowners, many of the larger farms and ranches in Texas have been splintered into smaller pieces over the past three decades. During this timeframe, the amount of land devoted to agricultural uses in Texas declined by almost 3 million acres. These "ranchettes" are normally too small for traditional farming, ranching, or forestry operations. As their popularity grows, particularly in the central and eastern parts of the state, significant disruption in the habitats of grassland-dependent wildlife species has occurred. Indications are that this trend will continue as diverse income alternatives for the land increases and the recreational value of the property rises.

The agriculture industry is predicted to face myriad economic challenges in the future. Among them are water availability, production costs, trade restrictions, and fluctuating commodity prices. Numerous opportunities will also abound over the next few years and will likely range from the ongoing development of new technologies and advancements in transportation and equipment to the growing availability of global markets and increasing interest in investment.

Thus, over the short term, the traditional contributions of agriculture are expected to be sustained and remain highly important to the state's overall economy.

Dr. Perryman is Founder and President of The Perryman Group (TPG), an economic financial analysis firm headquartered in Waco. He is widely regarded as one of the world's most influential and innovative economists. His complex modeling systems form a basis for corporate and governmental planning around the globe. His thousands of academic and trade articles and presentations span a wide variety of topics, gaining him international respect and acclaim. A popular speaker, he addresses hundreds of audiences throughout the world every year.

Table 1