Contribution of Beef Cattle

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LAE6731
Hello, I'm attempting to determine the contribution of the beef cattle industry and wanted to make sure that I'm on the right track. In our study we're breaking the US into 7 regions and analyzing the contribution of beef cattle production and processing in each. We are looking at 2014 and have data for all 50 states. We first compared IMPLAN's sector 11 output to 2014 values published by NASS for value of production. IMPLAN values were significantly different for most states so we modified each region to match NASS's value of production. Following your instructions for contribution analysis, I've customized commodity production to balance to one and set the local use ratio to zero for sector 11. (Let me know if this is correct.) As far as processing, I'm not really sure what to do. I assume that beef cattle processing would fall under sectors 89, 90, and 91. To begin, I suppose I'll need to determine the output attributed to beef for each of those sectors, correct? If so, what exactly am I looking for in finding a beef processing output value? For instance, I've found a way to estimate state-level values for lbs of dressed beef coming out of slaughter houses. Would I multiply that times a sales margin to estimate processing output? Then, if I can come up with processing output values for beef, what would be the best way to separate the animal processing sectors in IMPLAN? A post from several years ago said that the industry production could be modified by summing the coefficients for sectors 11 and 14, then using that value for sector 11 and zeroing out sector 14 for each processing sector. Is this still the recommended method?
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    IMPLAN Support
    Hello Ashley, Our 2014 agriculture data does utilize NASS data to estimate the value of production for certain agricultural products. However, we controlled to the BEA's estimates of cash receipts, which were estimated to be $97 Billion. We now (starting with data year 2015) use NASS gross income.   When customizing commodity production, make sure that it is the primary commodity that is balanced to 1 (the primary commodity is the sector code + 3000). It's not stated in your previous post that you are, but do note that you do not need to edit the Study Area Data in order to use your preferred Output numbers. Instead, you can simply use your Output values in the Event set-up. This is preferred to editing the Study Area Data (unless you also want to edit the employment, labor income, etc. as well) because it will maintain correct ratios (Output-per-worker, labor income-per-worker, TOPI-per-Output, etc.). If you only edit the Output, then those ratios will be off, whereas if you do not edit the Study Area Data and use your Output values in the Event setup, then the rest of the fields will be filled in using the original ratios.   Your method for determining the Output associated to beef processing is appropriate. In regards to your final paragraph, we do not suggest using the method from the older post. Instead, continue to use the [url=http://support.implan.com/index.php?option=com_content&view=article&id=366]Multi-Industry Contribution Analysis[/url] method. Since you are analyzing portions of the processing industries instead of their entirety, you have two choices in how you want to edit the model; one method will slightly understate your impact and the other option slightly overstate your impact. 1. Understate: Follow the Multi-Industry Contribution Analysis methodology and set the Local Use Ratio to 0 for the processing sectors. This prevents further purchases from the target processing industries, preventing double-counting of activity for those industries. However, this method also prevents purchases of non-beef processing from the target processing industries, and is thus a bit conservative. 2. Overstate: If you do not edit the model by setting the Local Use Ratio to 0 for the processing sectors, you allow the non-beef processing purchases to take place, but you also allow purchases of beef processing, which results in double-counting some of your activity. We recommend the more conservative approach (option 1), but neither approach is perfect. The important thing is to detail your methodology in your report. Regards, IMPLAN Staff
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