Employment Security Department

Labor Market & Economic Analysis Branch

Agricultural Services
Overview
The job recovery following the 1990-91 recession was fueled by growth in the service-producing
industries. Among these service-producing industries is agricultural services, one of the fastest growing
sectors in the nited !tates. "etween 19#9 and 199$, agricultural services employment increased by
11.# percent annually. %nly the business services &average annual growth of 1'.$ percent( and
museums, botanical and )oological gardens &average annual growth of 1'.1 percent( industries grew at a
faster pace during this time period.
*hile employment in agricultural services has increased dramatically over the years, its growth has been
a mirror image of declining farm employment. +ate of production growth, however, has been robust in
both sectors.
Figure 1
.!. ,mployment in -arms and Agricultural !ervices, 19#9-199$
Source: U.S. Bureau of Economic Analysis
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1,500
2,000
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3,000
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4,000
4,500
1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997
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Agricultural services Farm
Agricultural services sector is comprised of a wide array of services sold to farm-oriented enterprises and
to non-farm final consumers. Those farm-oriented services are essentially intermediate activities,
providing inputs for agricultural production. These service activities ta.e on various forms/ for e0ample,
an agricultural service occurs when a firm provides soil preparation services for a farming enterprise,
when a company performs crop planting, cultivating and harvesting services, when a veterinary provides
services for livestoc., or when a firm provides temporary labor on a contract basis to farms during
production or harvesting, or even providing management e0pertise for farming enterprises. Although
these e0amples hint at the variety of services captured by the industry, they do not convey the sheer
number of activities performed by 1non-farm2 agricultural services. !uch services include veterinary
services for pets and other animal specialties &e.g., non-livestoc.(, landscape architectural and planning
services, lawn and garden services, and ornamental shrub and tree services.

Definition of Agricultural services
This industry report uses industry definitions and concepts that underlie the .!. government3s !tandard
4ndustrial 5lassification &!45( system. 4n the !45 system, agricultural services &!45 0$( is a major industry,
one of five such industries that form the agriculture, forestry, and fishing sector. According to the
!tandard 4ndustrial 5lassification, there are si0 separate agricultural services subsectors and 16 mar.et
segments defined by broad service categories. ,ach of the 111,670 agricultural services establishments
operating in the nited !tates in 199$ was placed in one of these si0 industry subsectors8
!oil preparation services &!45 0$1(, including plowing, application of fertili)er, seed bed
preparation and other services for improving the soil for crop planting/
5rop services &!45 0$9(, including crop planting, cultivating and protecting &e.g., aerial dusting
and spraying, cultivation services, disease control of crops, entomological services, irrigation
system operation systems, orchard cultivation services, seeding crops, pruning of orchard trees
and vines, and weed control(/ crop harvesting by machine/ crop preparation services for mar.et
&e.g., sorting, grading and pac.ing of fruits and vegetables, grain cleaning and fumigation, drying
of corn, fruits and vegetables(/ and cotton ginning/
:eterinary services &!45 0$6(, including animal hospitals, veterinarians and veterinary services
for livestoc., and animal hospitals, veterinarians and veterinary services for pets/
Animal services, e0cept veterinary &!45 0$'(, including livestoc. services &e.g., artificial
insemination services, livestoc. breeding, mil. testing, cattle spraying, vaccinating livestoc.,
sheep dipping and shearing, and custom slaughtering( and animal specialty services &e.g., animal
shelters, boarding horses, .ennels, dog pounds, breeding of non-livestoc. animals, showing of
pets, horse training(/
-arm labor and management services &!45 0$#(, including farm labor contractors and crew
leaders, and farm management services/ and
;andscape and horticultural services &!45 0$<(, including landscape counseling and planning
&e.g., landscape architects, horticultural advisory services(, lawn and garden services &e.g.,
garden planting, lawn care and mowing services, sod laying, turf installation(, and ornamental
shrub and tree services &e.g., arborist services, ornamental tree planting and pruning, tree
planting and pruning, utility line tree trimming services(.
Agricultural services have a growing presence in both the national and *ashington !tate economies. 4n
19#9, 0.' percent of the nation=s total employment were employed in agricultural services industries. -or
*ashington, agricultural services only 0.6 percent of the state=s 19#9 total employment. "y 199$,
agricultural services= share of total national employment had grown to 1.9 percent/ while in *ashington,
its share of total employment had tripled to 1.' percent.
Current Status
4n 199<, the *ashington agricultural services industry employed 96,1#' wor.ers/ representing about one-
fourth of the state=s wor.force in natural resources. >rowth in the number of agricultural services
establishments in *ashington has been steady/ between 19<1 and 199<, the average annual growth in
establishments has been #.< percent, with 1non-farm2 agricultural services capturing the lion=s share &9$
percent( of the industry=s growth.
Figure 2
?umber of ,stablishments in *ashington Agricultural !ervices, 19<1-199<
Source: Washinton Employment Security Department
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1,000
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2,000
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3,000
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4,000
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
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Non-farm related Farm-related
The current employment picture of agricultural services is nearly three-fold larger than it was in the early
19<0s. "etween 19<1 and 199<, farm-related agricultural services added over ',$00 wor.ers, an
average annual growth rate of <.$ percent/ non-farm related agricultural services added nearly 10,000
wor.ers for an average annual growth rate of 19.< percent.
@ey factors that affect the demand for agricultural services include the strength of the .!. agriculture
sector and the general economy. -arm-related agricultural services are tied directly to the economic well-
being to the farm sector. The economic well-being of the farm sector can be measured by any number of
factors including farm income, cash receipts, asset values &real estate and non-real estate(, debt and
debt-to-asset ratios. %ther factors have played an important role in the robust growth of farm-related
agricultural services. !imilar to the vigorous growth in business services, 1outsourcing2 has become
increasingly commonplace from soil preparation and planting to cultivating and harvesting. Technological
advances within and outside agriculture have facilitated demand for agricultural services. -urthermore,
the mode of operations for agricultural firms has dramatically changed in recent decades. The drive for
improved productivity and increased competitiveness has resulted in the dramatic growth in the use of
temporary and contract wor.ers.
*ith respect to non-farm agricultural services, personal disposable income and general economic
performance are the .ey demand factors. *ith rising disposable incomes and technological advances,
consumers have increased their demand for lawn and garden services, ornamental shrub and tree
services, and veterinary and animal services.
Figure 3
,mployment in *ashington Agricultural !ervices 4ndustry, 19<1-199<
!ource8 *ashington ,mployment !ecurity Aepartment
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10,000
15,000
20,000
25,000
30,000
1981 19821983 19841985 19861987 19881989 19901991 19921993 19941995 19961997 1998
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Farm related Non-farm related
Agricultural services in *ashington is largely composed of small companies that provide various farm-
related and non-farm related services. %ne of the subsectors &landscape and horticultural services(
accounts for over #0 percent of the total 7,'16 establishments, and average just over 6 employees per
establishment. "y contrast, the farm labor and management services subsector averages 199 employees
per establishment, while animal services &e0cept veterinary( averages around 7 employees per
establishment. %ver '6 percent of all agricultural services wor.ers are found in establishments with less
than 90 employees. Bore than three-fourths of all employees in this industry are in small businesses with
less than 100 employees.
Figure 4
!i)e of ,stablishments of *ashington Agricultural !ervices 4ndustry, 199<
!ource8 *ashington ,mployment !ecurity Aepartment
0%
10%
20%
30%
40%
50%
60%
1-19 20-49 50-99 100-249 250-499
Number of employees per establishment
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State
Agricultural services
Average covered wages for agricultural service wor.ers was C1$,9#$ in 199<, nearly '0 percent below
the statewide nonfarm average of C77,999. 4n 199<, agricultural services employees= wages and salaries
ran.ed twelve among seventeen services industries, and substantially lower than the statewide services
industry annual average at C7',99#. *ith the e0ception of crop services, all other agricultural services
subsectors lost ground in real &i.e., without inflation( wages and salaries between 19<1 and 199<. 4n
contrast, total services wor.ers in *ashington enjoyed a real increase of #0 percent in their wages and
salaries.
The distribution of hourly wages for agricultural services is dissimilar to the state, with a pronounced
disposition toward lower hourly wages. ?early two-thirds of all wor.ers in the agricultural services
industry earn C10 or less per hour, compared with 70 percent of all nonfarm wor.ers in the state. 4n
contrast, only $ percent of agricultural services wor.ers earn C90 or more, compared with 9< percent of all
state nonfarm wor.ers.
Table 1
+eal Average *ages for *ashington 5overed Agricultural !ervices *or.ers, 19<1-199< &199< dollars(
Sources: Washinton Employment Security Department! U.S. Bureau of Economic Analysis
Sector 1981 1983 1985 198 1989 1991 1993 1995 199 1998
!oil preparation services C90,<99 C1#,$$' C76,$'1 C9#,''$ C96,1'9 C97,17' C96,099 C91,1'' C97,90$ C19,9$0
5rop services C1#,#09 C1','10 C17,997 C16,#$$ C16,'91 C16,69# C16,76# C1',7'# C1$,000 C1$,996
:eterinary services C1<,001 C1#,067 C17,#69 C17,9#$ C16,9#$ C1',00# C1',#97 C1#,791 C1$,1$< C1<,019
Animal services, e0. :et. C17,9#1 C19,99' C19,090 C19,6$# C19,1$' C19,7## C19,'00 C11,<'7 C19,67$ C19,<9'
-arm labor D mgmt. srvs. C11,0<9 C','9# C',9$< C',1$$ C9,<10 C11,960 C19,$<6 C10,<90 C9,996 C<,''#
;andscape D hort.. srvs. C90,$'1 C1<,990 C1$,#17 C1$,<9# C1$,77' C1$,#1' C1<,001 C1<,'00 C19,701 C90,101
Total, agricultural srvs. C1$,<$7 C1#,917 C16,9#1 C1',71# C1',1<9 C1','<< C1',<76 C1#,99' C1$,070 C1$,9#$
!tate services &inc. ag. srvs.( C99,'9' C91,91# C90,'<7 C91,697 C91,'99 C97,96< C96,90< C9#,690 C70,#'7 C7',99#
!tatewide nonfarm C9<,$<7 C9$,$<9 C9$,717 C9$,706 C9$,1#$ C9$,99< C9<,'$' C99,06# C71,'06 C77,999
Figure 5
Eourly *ages for *ashington Agricultural !ervices *or.ers, 199$
!ource8 *ashington ,mployment !ecurity Aepartment
0%
5%
10%
15%
20%
25%
30%
35%
<$6 $6-$8 $8-$10 $10-$12 $12-$14 $14-$16 $16-$18 $18-$20 $20-$22 $22-$24 $24-$26 >$26
Hourly wage
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State
Agricultural services
The labor force in the agricultural service sector is dominated by agricultural wor.ers and laborers. About
three-fourths of all wor.ers are in these two occupation groupings. 5ommon agricultural service
occupations within this group are agricultural graders and sorters, gardeners and grounds.eepers, lawn
maintenance wor.ers, and farm wor.ers, machinists, and eFuipment operators. Grofessional and
technical and clerical occupations are also important in agricultural service. Although the majority of
agricultural service wor.ers are within the agricultural wor.ers and laborer grouping, a si)able share of
the subsector=s employees are classified as professional and technical wor.ers &e.g., veterinarians,
veterinarian technicians, landscape architects, agricultural and food technicians(.
Table 2
%ccupational Grofile of Agricultural !ervices *or.ers in *ashington, 199< and 900<
!ource8 *ashington ,mployment !ecurity Aepartment
!sti"ate# 1998 $ro%ecte# 2&&8
Agricultural services' S(C & $ercent of $ercent of
!sti"ate# Total $ro%ecte# Total
!")lo*"ent !")lo*"ent !")lo*"ent !")lo*"ent
Banagerial D Administrative 1,7$$ <.7H 1,#90 <.7H
Grofessional, Garaprofessional D
Technical
9,60# 16.'H 9,$96 16.6H
!ales D +elated %ccupations 9#7 1.#H 70$ 1.#H
5lerical D Administrative !upport 9,'76 1'.9H 9,$0$ 17.9H
!ervice %ccupations 19< 0.<H 199 0.#H
Agriculture, -orestry D -ishing ','<0 77.#H #,#1< 76.0H
Groduction, %perating D Baintenance 7$7 9.9H 669 9.7H
%perators, Eelpers D ;aborers 7,0#$ 1<.6H 7,$79 19.9H
ndefined %ccupations 906 '.6H 1,116 '.$H
T%TA; 1#,#79 100.0H 19,6'# 100.0H
Contribution of Agricultural Services (n#ustr* to t+e ,as+ington State !cono"*
Aoes the agricultural services industry merely serve local mar.ets or is there a significant proportion of
the state=s agricultural services sold in non-local mar.ets. The observation that a state=s employment
concentrates in a particular agricultural service industry &that is, that there is surplus labor employed in
producing a service(, suggests that the state produces more than it needs and therefore e0ports the
surplus. The most commonly used measure for agricultural service e0port has been a simple inde0 of
employment concentration which loo.s at an industry=s share of total employment in a state. This share is
put into inde0 form by dividing by the industry=s share of total employment in the nation. An inde0 number
greater than 1 suggests that the state produces a surplus in the business service which is e0ported
elsewhere. Accordingly, an inde0 number of 1 would indicate little or no trade while an inde0 number less
than 1 would suggest that the state imports the service.
Figure -
4nde0 of !peciali)ation8 *ashington Agricultural !ervices, 19#9-199$
Source: U.S. Bureau of Economic Analysis! "ull#$art %ime Employment Series
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1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997
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-or agricultural services, the inde0 of employment concentration indicates that this sector does play a role
in e0port trade in *ashington. nfortunately, no report has actually documented the amount of
agricultural services produced for e0port mar.ets.
Outloo.
4n recent years, agricultural services has been among the fastest growing sectors of the state=s economy,
and this growth is e0pected to continue in the future, albeit at a slower pace. Agricultural services
employment will grow by an average of 7.9 percent per year between 199' and 900'. "eyond 900',
agricultural services employment is e0pected to slow significantly to an annual rate of 1.7 percent until
9090.
Figure
*age D !alary ,mployment -orecast for *ashington Agricultural !ervices, 199'-9090
Sources: Washinton &ffice of "inancial Manaement! Washinton Employment Security Department
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15,000
20,000
25,000
30,000
35,000
1995 2000 2005 2010 2015 2020
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