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The Value Chain of Colorado Agriculture Gregory Graff, Dawn Thilmany, Becca Jablonski, Allie Gunter, Libby Christensen, Chad Chriestenson
The Value Chain of Colorado Agriculture
Gregory Graff,Dawn Thilmany,Becca Jablonski,Allie Gunter,Libby Christensen,Chad Chriestenson
What is a Value Chain?
The series of economic steps or
linkages that turn raw materials
and other inputs into final products
or services delivered to end users.
Capital and purchased
inputs
Farms and ranches
ENVIRONMENT
COMMUNITY
Wholesalers &
distributors
Restaurants, institutions,
& food retailers
Natural resources Consumers Post-
consumer
Processors &
manufactures
VALUE CHAIN
The Agricultural Value Chain
OEDIT
2011
CSU, with CDA
2011-2013 Feb 2013
Ag & Food Key Industry Network
Mandate from Governor
Some background
Achieved several things:• Gave the industry focus• Helped recognize opportunities,
esp. in food manufacturing
Nov 2014
• Put discussions of water in context• Highlighted new nature of workforce• Focused on ag innovation
Adding Community Context to a Sector-Wide Conversation
2017 updateThe Value Chain of
Colorado Agriculture
2017Public Attitudes of the Role of Food
and Agriculture in Colorado
2017 Regional Community Food and Ag Town Halls
Today, introducing…
2017 update of The Value Chain of Colorado Agriculture
A comprehensive foundation of data on the size and structure of Colorado’s ag and food industries, in order to:• Identify areas where businesses share a common fate • Bring Colorado’s regions together around shared economic strengths• Provide an integrated perspective to inform policy and regulatory
decision making across all sectors of the value chain
• Highlight connections, allow for a deeper understanding of agriculture and its impact
• Advance new conversations about Colorado agriculture.
More than 200 distinct economic activities, sub-sectors, or specific industry classes (NAICS)
Updating data from 2011 through 2015.
AND
Adding new analyses of additional ag and food related activities.
SOME OBSERVATIONS FROM THE UPDATE OF THE VALUE CHAIN
What we found:
The Reality of Retail in 2015
Total Food & Beverage Retail Sales in Colorado = $31.5 billion
Food at home = $13.1 billion Food away from home = $12.6 billion
The big five = $ 5.4 billion
Full service restaurants = $6.7 billion
Alcoholic bev.= $5.8 billion
Garden center, landscaping = $1.9 billion
Pet food = $190 million
Fuel ethanol = $391 million
Total Ag Product Retail Sales in Colorado = $34 billion
(Walmart = $3.2 billion)
From Survey of CO Public Attitudes
0%10%20%30%40%50%60%70%80%90%
100%
2011
2016
Consumers’ food purchases still motivated by freshness, then safety
The Quiet Link in the Value Chain: Wholesale
Over 2,000 companies and almost 35,000 jobs in Colorado.
Highest average earning among major segments of the ag value chain:
$57,000
Annual Average Job Growth from 2010 to 2015: 4.6%
2015 Estimated Sales = $3.3 billion
Feeding the World
Combined sales of Colorado’smanufactured foods and beverages are estimated at $16.0 billion.
Of that, an estimated$1.6 billion (10%) is exported from the US, $ 8.3 billion (51%) is sold out of state, $ 6.2 billion (38%) is sold within CO.
A State of Beef & BeerValue of production of beef cattle = $2.4 billion
All animal slaughter and meat packing = $3.2 billion
Beer brewing = $3.5 billion
Marketingsof Cattle & Calves =
$4.0 billion
Value of production of Cattle & Calves =
$2.5 billion
Marketingsof hogs =
$193 million
Revenues from Livestockin Colorado
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
$1,600,000,000
$1,800,000,000
$2,000,000,000
$2,200,000,000
$2,400,000,000
$2,600,000,000
$2,800,000,000
$3,000,000,000
$3,200,000,000
$3,400,000,000
$3,600,000,000
$3,800,000,000
$4,000,000,000
$4,200,000,00020
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
15
Cattle and Calves - Total MarketingsCattle & Calves - Value of ProductionHogs
Cattle and calves in Colorado, 2015 (1 dot=10,000 head)
Dairy: Up & ComingOn farm milk production = $668 million
Dairy manufacturing = $2.8 billion(of which, cheese = $2.1 billion)
Dairy manufacturing annual Average Sale Growth
from 2010 to 2015: 9.9%$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Dairy production
The Livestock Feed (Im)balance
Feed purchases are way up. Feed expenditures in 2015 are 214% of
their 2005 level.
Colorado’s feed deficit was-$400 million in 2015,
but up from over -$600 million in 2014.
Between demand for cattle feeding and for ethanol production, an estimated
100 million bushels of grain corn need to be shipped into the state each year.
-$700,000,000
-$500,000,000
-$300,000,000
-$100,000,000
$100,000,000
$300,000,000
$500,000,000
$700,000,000
$900,000,000
$1,100,000,000
$1,300,000,000
$1,500,000,000
$1,700,000,000
$1,900,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Feed purchased
Feed crops produced
Feed surplus or deficit
The Milling and Baking BoomMilling = $717 million
340% increase in estimated sales,110% increase in jobs,
and 235% increase in payroll.
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
$1,600,000,000
2011 2015
Baking = $1.4 billion25% increase in estimated sales.
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
2011 2015
TotalFlour millingStarch and vegetable fats and oils manufacturing
Revenues from Crop Production in Colorado
On farm production = $2.2 billion
OilseedsGrains and fodder Fruits and vegetables
Sugar crops
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
$900,000,000
$1,000,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
CornWheatHayBarleyOatsSorghumMillet
$0
$100,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
SunflowerOther Oil Crops
$0
$100,000,000
$200,000,000
$300,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
FruitsPotatoesAll Other Vegetables
$0
$100,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sugar beets
Greenhouse & Nursery Crops:Farming the Urban Landscape
On farm production = $250 million
Retail sales of nursery, greenhouse, and florist products
= $289 million
Landscaping services = $1.5 billion
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
2005
2006
2007
2008
2009
2010
2011
2012
Greenhouse/Nursery crops
Input Costs of FarmingFertilizer and pesticide expenses forfarms and ranches have increased
93 percent over the last decade.
Fuel prices have come back downafter peaking in 2008 and 2011.
$0
$100,000,000
$200,000,000
$300,000,000
$400,000,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
ElectricityFertilizer, Lime & Soil ConditionersPesticidesFuel & Oils
Colorado Ag Inputs Industry
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
2011 2015
Fertilizer manufacturingPesticide and other ag. chemical mfgFarm supplies merchant wholesalersTotal
Combined manufacturing and wholesale of farm supplies: over $800 million
Strongest growth in farm supply wholesalers: 72% increase in est. sales, 32% growth in jobs, and 79% growth in payroll.
The Ups and Downs of Farming(but generally up over the decade)
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
$1,600,000,000
$1,800,000,000
20052006200720082009201020112012201320142015
Net returns to Colorado farm and ranch operators, over the last decade, with fitted trend line, 2005-2015
THE COLORADO BLUEPRINT’S EIGHT CROSS-CUTTING THEMES
1. Create a business friendly and consumer friendly regulatory environment.
2. Address how scale impacts market performance, access and opportunities.
3. Develop workforce and youth to support agricultural sector.
4. Spur innovation and technology for food and agriculture.
5. Create and retain food and agricultural firms in Colorado.
6. Enhance access to capital for agricultural and food firms.
7. Support a Colorado brand that reflects the unique qualities of its agriculture, food, and beverages.
8. Foster the interface of food and agriculture with key support resources to contribute to vibrant communities.
An offer / invitation• Presentation and discussion of value chain data
and report for – Industry groups– Growers’ associations– Individual companies– Board meetings
• To brief your members, employees, leadership• To provide feedback to the CSU Value Chain team
Thank you, Colorado agriculture!
