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| Assessing the Future of Food Manufacturing in New York State |
This work is supported by a joint research and extension program funded by Cornell University Agricultural Experiment Station (Hatch funds) and Cornell Cooperative Extension (Smith Lever funds) received from Cooperative State Research, Education, and Extension Service, U.S. Department of Agriculture. |
Project Timeline: FY2007/2008 - FY2009/2010 Project Justification Understanding the economic contributions and evolving linkages between food manufacturing and other agribusiness firms along the food value chain is essential in defining appropriate firm, industry, and public policy strategies to strengthen opportunities for economic development and improve the competitiveness of local New York agribusiness industries. In addition, uncovering challenges and opportunities of processor operations will aid in assessing the ability of NYS products to compete in value added markets, and identifying market channel efficiencies and inefficiencies will help strengthen the competitiveness of NYS products. Between 1997 and 2002, ag-based manufacturing fared better than other manufacturing sectors in the state; however, its overall growth has been relatively stagnant. A 2.4% increase in nominal shipment sales from 1997 to 2002 represents less than 0.5% growth per year (U.S. Census Bureau(a)). Converting these relatively stable nominal measures to real value measures (i.e., deflating them to constant dollar bases) would likely translate into a decline in real value of output over this time period. Furthermore, relative to changes in U.S. food and beverage manufacturing, New York has fared considerably worse. As such, New York’s share of national food manufacturing activity from 1997 to 2002 decreased 7.7%, 10.3%, and 5.5% in the number of establishments, value added, and values of shipments, respectively (Schmit and Bills, 2007). Retaining a healthy processing sector is essential to a viable food industry and support to local economies. Changing consumer demands and food security issues require food manufacturers to be aware, responsive, and adaptive, and require operating in a state economy with opportunities that allow firms to effectively and economically adjust and supported by policies that facilitate firm adjustment. Improvements in technology imply more and higher-quality products can travel further distances,and leading to increased competition for local consumer markets. Without an adaptable and viable food manufacturing industry, this valuable economic activity, source of markets, and source of employment may shift to other areas. Understanding appropriate firm operational adjustments, and developing appropriate state economic development policies and business incentives to make NY more receptive to these firms appears crucial to this sector in order to improve firm competitiveness and long-term sustainability. The purpose of this study is to conduct an economic analysis of the food manufacturing industry in NYS disaggregated by important food manufacturing sectors, identify strategic advantages and barriers to growth, and develop recommendations for manufacturing firms and public policy makers to improve the competitiveness and business climate for food manufacturing in New York. The study will move beyond recent studies that have focused on either a state- or single regional-level analysis by undertaking a comprehensive regional analysis, highlighting recent economic trends, and potential barriers to and prospects for economic development in multi-county areas across the state. A closer inspection of regional variation in economic contributions to the food processing industry provides information on regional competitive advantages, provides direction for regional growth opportunities and inter-industry collaborations, and highlights areas where regional agribusiness sectors are declining or receding relative to other areas in the state or nation.
References U.S. Census Bureau(a). Economic Census. http://www.census.gov/econ/census02/, 1997 and 2002, accessed April 2007. U.S. Census Bureau(b). Nonemployer Statistics. http://www.census.gov/econ/census02/, 1997 and 2002, accessed April 2007. (top)
This study will provide a comprehensive evaluation of the status and condition of NY’s food manufacturing industry from which outreach materials and recommendations will be developed to assist firms and state development agencies in improving the economic viability of food processing in NY. Identifying reasons for recent economic trends in food manufacturing and current barriers to growth will produce strategies and policy recommendations aimed at improving competitiveness. Identification of competitive advantages and opportunities for growth will be useful to economic development agencies in marketing NY as a preferred location to do business in. Firm-level strategic recommendations will be presented to improve firm business structures and product marketing opportunities, as well as in identifying useful collaboration opportunities among manufacturers and others within the food value chain, and in improving the ability to understand and adapt to changing consumer preferences and issues. This project aims to address these questions directly by conducting an economic analysis of the food manufacturing industry in NYS, assessing current conditions, and evaluating prospects for future growth. The project will use secondary data to examine the overall importance of the food manufacturing industry to the state economy, ranking and categorizing the important food manufacturing sectors in the state, and evaluating recent trends. In addition, we will survey food and beverage processing firms and conduct regional focus groups to identify the current strengths and strategic advantages, as well as the problems, weaknesses, and barriers to growth faced by the industry. Educational and outreach materials will be developed and communicated to industry stakeholders. Firm-level strategies will be developed to aide firms in identifying and designing appropriate business structures to improve coordination and collaboration of market activities, and state-level economic development recommendations will be communicated to aid policymakers in designing effective policy initiatives. (top)
An advisory council has been established to guide work plan development, and evaluate and review of research results. We have recruited a talented group of industry and agency representatives that have been advising us on this project. The full list of Council members is shown below.
James P. Finkle, Constellation Brands Council Meeting 2008
Council Meeting 2009
Todd M. Schmit | ||||||
