Economic contribution of the U.S. catfish industry

Abstract

The catfish industry is the largest U.S. aquaculture sector and a major contributor to the rural economies of the Southern states of Alabama, Arkansas, and Mississippi. Economic contributions of this industry to the tristate region were estimated using an input-output modeling approach with the IMPLAN database and software (Impact Analysis for Planning MIG, Inc.). An analysis-by-parts approach was employed as the IMPLAN database does not disaggregate the catfish sector from other livestock industries which have expenditure patterns that differ substantially from those of catfish. All major actors of the catfish industry, i.e. feed mills, hatcheries, foodfish farms, and processing plants, were surveyed to obtain their expenditure patterns and output in terms of sales. Data were obtained from 68 farms (hatcheries and foodfish combined), four feed mills, and eight processing plants in the tristate region. Sales and expenditure values were converted to coefficients employing standard enterprise budgeting techniques and imported to the IMPLAN model for estimating industry contributions during 2019. The direct output from the catfish industry ($1.10 billion) generated a total economic contribution of $1.91 billion. The industry directly employed 4,298 people and created an additional 4,868 jobs in the tristate economy for a total employment effect of 9,166 jobs. Catfish industry spending created an indirect economic effect of $552 million in other secondary sectors that supplied production inputs and services. The induced economic effect generated from household spending amounted to $254 million. Some of the key sectors influenced by the catfish industry were grain farming, banking and financial institutions, truck transportation services, electricity generation, equipment, and machinery manufacturing. The industry also generated $78 million in local, state, and federal taxes. This study provides critical insights for policymakers and others into the contribution of the U.S. farm-raised catfish industry to local and regional economies as well as its diverse-industry interconnections.

Keywords:

• Catfish industry
• economic impact
• economic contribution
• IMPLAN
• input-output models

Acknowledgments

We greatly acknowledge all the catfish industry producers, processors, and feed mill owners from the states of Alabama, Arkansas, and Mississippi for providing us with their primary business data. We would like to thank the United States Department of Agriculture National Institute of Food and Agriculture (USDA-NIFA-SRAC Grant #2018-38500-28888) for funding this research along with support from the U.S. Department of Agriculture National Institute of Food and Agriculture (USDA-NIFA Hatch Project Accession Number 1013160). The graduate student was supported by the Mississippi Agriculture and Forestry Experiment Station (MAFES), Special Research Initiative (SRI) grant #371800.

Notes

1 Alternative approaches to economic impact analysis include economic simulation models, computable general equilibrium models, econometric modeling, REMI (Regional Economic Modeling, Inc.) and LM3 (Local Multiplier 3) models, etc.

2 U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. Department of Agriculture, and U.S. Geological Survey

3 Industry advisory group consists of a group of aquaculture industry leaders and farmers advising USDA-SRAC of annual research and funding priority, essentially determining the funding priority unlike conventional federal grant funding determination.

4 A forward linkage in an economy occurs when economic activity in a particular sector boosts economic activities in subsequent stages of production while a backward linkage arises when investment in one sector creates demand for goods and services that are purchased as inputs in another sector.

5 Obtained by dividing the non-participating area in that state by the number of non-participating farms in that state.

6 Keeping all other variables constant.

7 SAM multiplier = Total economic impact ÷ direct economic impact

Additional information

Funding

USDA-NIFA-SRAC Grant [#2018-38500-28888]; USDA-NIFA Hatch Project Accession [Number 1013160]; Mississippi Agriculture and Forestry Experiment Station (MAFES), Special Research Initiative (SRI) grant [#371800].