The Impact of Made In Oklahoma Coalition
Member Companies on Oklahoma's Economy: 2014
Legislative Reception
March 31, 2015
OSU Department of Agricultural Economic
Paper # AE-15001
Division of Agricultural Sciences and Natural Resources
The Impact of Made In Oklahoma Coalition
Member Companies on Oklahoma's Economy: 2014
Executive Summary
This study reports measures of the direct, indirect and induced, and total economic
impacts that member companies of the Made In Oklahoma Coalition generated for Oklahoma in
2014. Additionally, aggregate sales data for the year 2014, including sales outside Oklahoma
were provided by the firms.
To date, the Made In Oklahoma Coalition (MIO) consists of forty-five companies that
process various food products: meat and dairy, baking and confectionary goods, processed
horticultural foods, beverages, etc. The data represent the activities of all forty-five of these
MIO companies for 2014 and show that the firms conducted processing activities in seventy-five
facilities, employing 9,554 Oklahomans. Estimated annual payroll for these forty-five
companies is $332 million. Sales reported by thirty-four companies totaled approximately $4.1
billion, with $2.3 billion in Oklahoma-made products being exported to other states and/or other
countries.
For this study, the economic impacts associated with the MIO companies were
categorized as direct impacts (the activities associated with the firms’ processing operations),
indirect impacts (economic activity associated with purchasing goods/services from supporting
industries), and induced impacts (the results of employees from direct and supporting industries
purchasing goods and services for themselves and their families). The total impacts are the
summation of the direct, indirect, and induced economic impacts. All of these impacts were
determined using data provided by the firms and a computer-based, input-output model known as
IMPLAN (Impact Analysis for Planning).
The IMPLAN analyses indicate that the business activities of the MIO companies directly
resulted in 9,554 jobs and more than $332 million in payroll to employees. The indirect and
induced impacts added another 39,169 jobs and nearly $771 million in payroll. Thus, the total
economic impacts of these MIO firms were 48,723 jobs for Oklahomans and nearly $1,104
million in payroll.
All this is not only important to the economy as a whole, but to local and state
government as well. Tax dollars generated from these activities help provide services to citizens
such as education, law enforcement and fire protection.
The Impact of Made In Oklahoma Coalition
Member Companies on Oklahoma's Economy: 2014
Chuck Willoughby – Manager, Business & Marketing Relations,
Robert M. Kerr Food & Agricultural Products Center,
Oklahoma State University, Stillwater
Rodney Holcomb – Agribusiness Economist,
Robert M. Kerr Food & Agricultural Products Center,
Oklahoma State University, Stillwater
Jim Brooks – Manager, Business & Marketing Services,
Robert M. Kerr Food & Agricultural Products Center,
Oklahoma State University, Stillwater
Andrea Graves – Business Planning & Marketing Specialist,
Robert M. Kerr Food & Agricultural Products Center,
Oklahoma State University, Stillwater
Erin Johnson – Business Planning & Marketing Client Coordinator,
Robert M. Kerr Food & Agricultural Products Center,
Oklahoma State University, Stillwater
ROBERT M. KERR FOOD & AGRICULTURAL PRODUCTS CENTER
OKLAHOMA STATE UNIVERSITY
Prepared for the Made In Oklahoma Coalition
Legislative Reception
March 31, 2015
The Impact of Made In Oklahoma Coalition
Member Companies on Oklahoma's Economy: 2014
The food processing sector plays an important role in Oklahoma's economy. In 2000,
agricultural processing (food and nonfood) impacted the state's economy by contributing nearly
$3.3 billion to Oklahoma's Gross State Product (GSP). Of that, agricultural processing industries
directly added $1.7 billion to Oklahoma’s income while supporting industries generated $1.6
billion. As well, agricultural processing impacted the state’s employment by attributing to
73,688 jobs; 39,609 directly in agricultural industries and 34,079 generated in supporting
industries (Piewthongngam, et. al.).
The purpose of this report is to measure the economic impact member companies of the
Made In Oklahoma Coalition have on Oklahoma’s economy. Specifically, the report will focus
on direct, indirect and induced, and total impacts these companies have on employment and
income. Additionally, sales data, anticipated employment growth and future investment will be
reported. All data is aggregated to protect the privacy of the individual companies.
Background & Data Collected
In March 2001, several Oklahoma food manufacturers began discussing ways they could
collectively promote their products to the Oklahoma consumer. The direct economic impact of
the food processing industry is significant and generates additional jobs and income throughout
the rest of the State’s economy as a result of its activity. Realizing this importance, these
companies joined to form the Made In Oklahoma (MIO) Coalition. Their mission is two-fold:
1. To collectively promote food brand awareness, trade and consumer loyalty for Oklahoma
food products;
2. To achieve this through cooperative marketing activities which will enhance sales to
retail and foodservice outlets and promote business retention and expansion in Oklahoma.
2
To date, membership includes forty-five companies that process various food products:
meat and dairy, baking and confectionary goods, processed horticultural foods, beverages, etc.
Companies participating in this study have reported data confidentially to the Robert M. Kerr
Food & Agricultural Products Center which designed the survey and provided to the Oklahoma
Department of Agriculture Food & Forestry (ODAFF) for email distribution to MIO Coalition
member companies. Data for this study include information reported by thirty-seven companies
for 2014. Secondary data from the Oklahoma Employment Security Commission and from
Manta Media Inc. have been utilized to include estimates so that all forty-five member
companies’ impacts may be reflected. It is anticipated that as the MIO Coalition grows, updates
of this study will be necessary.
Data reported for these forty-five MIO companies shows that in 2014 processing
activities were conducted in seventy-five facilities in Oklahoma. These forty-five companies
provided employment to 9,554 people. Payroll by these companies totals $332 million. Sales
reported by thirty-four companies totaled approximately $4.1 billion. These companies also
reported that sales to customers outside Oklahoma totaled approximately $2.3 billion.
Measuring Economy-wide Impacts
The impact of value-added activities on the state’s economy can be assessed through
analysis of the food processing sector. The activities associated with food processing are defined
as the direct impacts. Additional impacts are created when these processing industries purchase
goods and services from other sectors to produce their final product and/or maintain the
operations of the firm. These input purchases are called indirect impacts. During the process of
supplying goods and services to food processing industries, the support industries pay wages to
3
employees. When employees of direct industries and supporting industries purchase goods and
services, they create induced impacts on the economy. Therefore, the total impacts of food
processing on the economy are the summation of the direct, indirect and induced impacts.
The measurement of direct, indirect, and induced economy-wide impacts of food
processing is accomplished using input-output analysis. This analysis can be used to explain
flows from producers to intermediate and final consumers. To analyze the input-output model, a
computer-based system, called Impact Analysis for Planning (IMPLAN), was used. The impacts
of food processing in 2014 were calculated based on the industrial relationships of IMPLAN and
using 2014 data provided by MIO Coalition companies.
The IMPLAN program then generates Type III multipliers. Using these multipliers, one
can differentiate the direct impacts from the indirect and induced impacts. For example, if a
Type III multiplier for employment is calculated to be 1.5, then for every 1 job (direct impacts)
in the industry being analyzed, an additional 0.5 jobs are created throughout the economy
(indirect and induced impacts). Likewise, if a Type III multiplier for income is calculated to be
1.75, then for every $1 of income (direct impacts) in the industry being analyzed, an additional
$0.75 of income is created throughout the economy (indirect and induced impacts).
Results
As reported earlier, the seventy-five facilities of the forty-five MIO companies employed
9,554 people (direct impacts). Total payroll was reported to be $332 million (direct impacts).
Table 1 provides a detailed look at these direct impacts as well as the indirect and
induced impacts and total impacts. The Type III multipliers generated for this study were 5.10
for employment and 3.32 for income. Thus for every 1 job provided by a MIO company, an
4
additional 4.10 jobs are created throughout Oklahoma’s economy as a result of the MIO
companies’ expenditures on inputs and services as well as employee spending in the Oklahoma
economy. Likewise, for every $1 of income paid by a MIO company, an additional $2.32 of
income is created throughout Oklahoma’s economy.
Table 1. Direct, Indirect and Induced, and Total Impacts
of MIO Companies on Employment and Payroll, 2014
Employment
Payroll
Direct
Indirect & Induced
Total
9,554
39,169
48,723
332,481,880
771,357,961
1,103,839,841
Type III Employment Multiplier of 5.10
Type III Income Multiplier of 3.32
Using these multipliers, the indirect and induced impacts MIO companies have on
employment are estimated to be an additional 39,169 jobs created throughout Oklahoma’s
economy. Thus the total impact on Oklahoma’s employment attributed to the activities of these
forty-two MIO companies is estimated to be 48,723 jobs.
Likewise, the indirect and induced impacts MIO companies have on payroll are estimated
to be an additional $771 million in income throughout Oklahoma’s economy. Thus the total
impact on Oklahoma’s income attributed to the activities of these forty-five MIO companies is
estimated to be $1,104 million.
5
Conclusion
The food processing sector plays an important role in Oklahoma's economy. These fortyfive companies alone have a total (direct, indirect and induced) impact on the state’s employment
of 48,723 jobs. As well, they impact state income in total by approximately $1,104 million
dollars in payroll. It is important to reiterate that thirty-four companies reported sales of the $4.1
billion of which about $2.3 billion was from out-of-state – a significant exportation of products
and importation of dollars.
All this is not only important to the economy as a whole, but to local and state
government as well. Tax dollars generated from these activities help provide services to citizens
such as education, law enforcement and fire protection.
While this study has examined the impacts of only forty-five MIO Coalition companies,
the impacts estimated are significant. It is assumed that impact analysis of the remainder of the
food processing industry will yield generally similar multiplier effects. It is anticipated that as
the MIO Coalition grows, future studies of the impacts the MIO Coalition companies have on
Oklahoma’s economy will be necessary.
6
References
Allen, C.W., Woods, M.D., and Doeksen, G.A., A Methodology for Assessing the Impacts of
Business Activity, Stillwater: Oklahoma State University, Agricultural Experiment
Station, B-793, November 1990.
Alward, G., et.al., Micro IMPLAN Software Manual, Judy Olson, ed (St. Paul: Regents
of the University of Minnesota, 1958.)
Manta Media Inc. “Rediscover America’s Small Business.” http://www.manta.com/, March 20,
2015.
Oklahoma Employment Security Commission. “Oklahoma Wage Report 2009.”
http://www.ok.gov/oesc_web/documents/lmiwagereport2013.pdf, April 2014, revised
March 30, 2011.
Piewthongngam, K., et.al., “Impact of Agriculture on Oklahoma’s Economy: 2000,” Oklahoma
Food and Agricultural Products Research and Technology Center, Department of
Agricultural Economics, Oklahoma State University, Oklahoma Department of
Agriculture, January 2002.
Woods, Mike, et.al., “The Economic Impact of Major Manufacturing Firms on the Economy of
Pottawatomie County, Oklahoma,” Rural Development Cooperative Extension Service,
Oklahoma State University. AE-01068, July 2001.
McConaghy, J., et.al., “10-Year Economic Impact,” Robert M. Kerr Food & Agricultural
Products Center, Oklahoma State University, August 2007.
7