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News Blog

Study Shows Monterey County Ag Has $8 Billion Impact

There's more to local agriculture than lettuce and broccoli. A study released April 11 shows the county's biggest industry pumps $8.2 billion a year into the local economy and provides more than 73,000 jobs—more than one in five jobs in the county.

Commissioned by Agricultural Commissioner Eric Lauritzen for $21,000, the study expands on the annual crop report compiled by Lauritzen's office. That raw data showed more than $4 billion in sales of agricultural products in 2010, led by strawberries (more than $750 million) and lettuce (over $1 billion).

"For 80-some years, we've just been doing the crop report. For the first time we've used state-of-the-art economic modeling techniques," said Jeff Langholz, a co-author of the study. Langholz and his colleague Fernando DePaolis are economists at the Monterey Institute of International Studies, and for DePaolis, it was an opportunity to learn about is own backyard. "This is not just another paper," he said. "This is examining our own house."

They relied on conservative figures. "We wanted a very low key, defensible approach," DePaolis said.

Lauritzen and representatives of the ag industry say they've long talked about "the multiplier effect," or impacts beyond product sales like irrigation piping suppliers and salad processing. This $8.2 billion figure was on the low end of what they'd anticipated this study, the first of its kind, would find.

"If anything, I think it's a conservative view," Lauritzen says.

He added that the study didn't account for leakage of Monterey County production to other locations. For example, some 3,000 new acres of strawberries planted in Mexico this year represent restrictions that add cost to production locally. "The debate around fumigants, quite frankly, that's part of it," Lauritzen said.

Methyl iodide, for instance, was approved for use in California in December 2010; before any of the controversial fumigant was ever applied in Monterey County, it was voluntarily pulled from the U.S. market by manufacturer Arysta LifeScience last month.

"We need to consider [economic impact] when we look at public policy that impacts farmers, ranchers, food producers," said Monterey County Farm Bureau Executive Director Norm Groot. "I think we're on the precipice here of a number of public policies that will really impact how agriculture moves forward."

Even through the recession, the study found the value of Monterey County ag grew by 7.3 percent in the past decade.

Because much of the additional value is generated by processing—like washing lettuce or making wine from grapes—future analysis could look at economic opportunity from building up industries complementary to agriculture.

Making more wine, rather than exporting most of the county's grapes to other regions, is high on that priority list. How to effectively grow that business? Lauritzen joked it's all in school lunch menus: "Get rid of tater tots and add wine," he said.