The Effects of Large-Scale Hog Production on Local Labor Markets
Sneeringer, Stacy, Hertz, Tom, Journal of Agricultural and Applied Economics
Although the negative externalities of large-scale hog production have been well studied, econometric estimates of its potentially positive labor markets effects are lacking. We use the geographic shifts in large-scale hog production between 1992 and 2007 to estimate such production's effects on local farm and nonfarm labor markets. We find that every additional 1000 head at large-scale facilities in a county generates 0.57 additional large-scale hog operation jobs, 0.04 fewer small-scale hog operation jobs, 0.16 fewer nonhog-related agricultural jobs, and 0.59 additional nonfarm jobs, for a total of 0.96 jobs. Our total estimate is lower than previous ones based on input-output modeling.
Key Words: employment, income, hogs
JEL Classification: Q5
Large-scale livestock operations represent a leap forward in agricultural productivity but have been met with considerable opposition in many communities. In addition to aesthetic concerns, opponents cite a growing body of research that finds negative effects of such operations on public health, the environment, and property values (Donham, 2000; Palmquist, Roka, and Vukina, 1997; Sneeringer, 2009a, 2009b, 2010; Thu et al., 1997; Wing and Wolf, 2000). On the other hand, state and local policymakers emphasize the importance of largescale hog production to regional employment, income, and tax revenues. Some communities have opposed increased environmental regulations that would discourage large-scale hog farms from operating in their jurisdictions,1 whereas others have encouraged the entry of these operations through tax breaks and welcoming legislation (North Central Regional Center for Rural Development, 1999; Pew Charitable Trusts and Johns Hopkins Bloomberg School of Public Health, undated; Sanders, 2007).
Local policymakers considering the relative merits of welcoming large-scale hog production need sound empirical estimates of its local labor market impact. Although prior studies, reviewed subsequently, have examined this issue using input-output modeling, we were not able to locate any estimates that were based on the retrospective econometric analysis of the labor market experiences of counties in which large-scale hog-farming operations have been established; in this article, we present one such set of estimates. We use U.S. Census of Agriculture data from 1992-2007 to quantify the number of hogs at large-scale2 operations located in nonmetropolitan counties and then exploit the geographic shifts in such production over time to identify its effects on county-level farm and nonfarm employment and earnings.
We find that each additional 1000 head in inventory at large operations generates 0.57 additional jobs on large hog operations, 0.04 fewer jobs on smaller hog farms, and 0.16 fewer jobs on nonhog agricultural operations. Another 0.59 jobs are estimated to be generated in that county's nonfarm economy, largely in wage and salary employment. The total employment impact of hog farming is thus on the order of 0.96 jobs per 1000 hogs in inventory. These are "same-county" estimates, which reflect only me jobs that are generated in the county in which me large-scale production is located. Our total employment estimate is lower than previous estimates based on input-output modeling.
Implications for Local Labor Markets of Structural Change in Hog Production
In the past 15 years, the number of agricultural operations witìi hogs has fallen by 61% but the average size of such operations has expanded by a factor of three. In 1992 the continental United States held just over 191,000 hog farms witfi inventories totaling 57.6 million head for an average of 301 hogs per farm. In 2007, the numbers were 63,450 farms with 65 million head, or 1032 hogs per farm. The number of hogs at facilities wim over 2500 head has increased by 16% per year, whereas the number at smaller farms decreased by 5% per year. As a result of mese offsetting trends, the total number of hogs in inventory in the United States has grown only modestly over time, on average 1. …