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The definitions
below clarify terms used in this data product
and related materials.
Bulk Commodities
Generally, bulk commodities are high-volume,
low-value unprocessed agricultural commodities,
which are treated as though they are homogeneous
in nature prior to processing. Grains, oilseeds,
cotton, and raw (unprocessed) tobacco are considered
bulk commodities. Contrasting agricultural categories
are high-value processed
products, semiprocessed products, and fresh horticultural
products.
Closed Model
Also known as partially
closed model.
Direct Effects
Direct effects are a measure of the impacts of
economic activity occurring within the exporting
sector (i.e., the farm or processed food sector).
See also open model.
High-Value Commodities
High-value food products are nonbulk commodities
that either require special handling, such as
fresh produce, or are processed, which adds substantial
value beyond the farm level. Processed foods are
edible foodstuffs that have been transformed from
their original post-harvest states to either semiprocessed
products (e.g., flour and meal) or final products
(e.g., bread and breakfast cereal).
I/O Analysis
Analysis that uses the information contained
in benchmark
year accounting tables to provide a snapshot
of the interrelationships between the sectors
of an economy. I/O analysis can be used to quantify
the entire impact of a given economic activity
(e.g., exporting) on a given area (e.g., the United
States).
Impacts
The effects of a given economic activity (e.g.,
exporting) reported in terms of jobs, income,
or output.
Indirect Effects
Indirect effects are a measure of the impacts
of supporting economic activity from other sectors
generated by the exporting activity (i.e., services
or trade). See also open model.
Induced Effects
Induced effects reflect the economic impacts
associated with new activity that will use previously
unused resources or production. For example, jobs
added by producers to support new higher levels
of exports increase household income, industrial
activity, and national gross domestic product.
This income generates more spending, which necessitates
more production. See also partially
closed model.
Input-Output (I/O) Accounts
Benchmark
tables published by the U.S
Department of Commerce, Bureau of Economic Analysis
show the production of goods and services and
the transaction flows of goods and services between
different producing sectors of the economy and
to different components of final use. These tables
enable ERS and other economists to perform I/O
analysis and are the basis of the ATM calculator.
The benchmark I/O tables are prepared primarily
from census data.
Labor Productivity
Labor productivity refers to the relationship
between output and the
labor time used in generating that output.
As a measure
of economic efficiency, it shows how effectively
economic inputs (labor) are converted into
output.
Productivity is measured by comparing the amount
of goods and services produced with the inputs
that were used in production.
Margins
The U.S. Department of Commerce defines margin or margin costs as "The
value of the trade services provided in delivering commodities from producers'
establishments to purchasers, where the purchaser pays for the services," which
reflects the value of transportation and wholesale-and-retail-trade services.
In an I/O framework, margins are
expressed as a percentage of the export value at
the port level. For this data product, margins are national averages of
the costs
associated with shipping, handling, and distributing commodities for export.
One can more accurately measure the multiplier impact of exporting commodities
or products by applying the correct margins to the appropriate producer, transportation,
and wholesale-and-retail-trade sectors’ employment and/or output.
Multiplier
An output multiplier is a summation of the effects
of $1 of demand for a particular commodity from
a particular industry. In this data product,
demand is for agricultural exports. The employment
multipliers
in this data product are expressed
in terms of jobs per billion dollars of agricultural
exports. The multipliers
correspond with a particular commodity, the use
of an open or partially closed I/O
model, and the stage of the export process (i.e., producer or port).
Open Model
An open model measures the direct
and indirect effects
of an economic activity (exports); that is,
the impacts
of sales and purchases between all goods and
service sectors of the economy; sales to final
demand
(consumption, investment, government, and net
exports); and purchases of land, labor, and
capital
services. Open model multipliers are
best suited to describe what has already happened
in an economy or the interrelatedness of sectors
in a base period.
Output
For an industry
or nation, output is the value or cost of all
the intermediate inputs and costs of production
to an industry or nation plus the value of the
income or gross domestic product generated in
that industry or nation. See the definitions used
by the U.S Department of Commerce, Bureau of
Economic Analysis for gross domestic product
and gross
output.
Partially Closed Model
A partially closed model, sometimes called a
Miyazawa model, measures the direct,
indirect, and induced
effects of an economic activity (exports); that
is, the impacts of sales and purchases between
all goods and service sectors of the economy;
sales to final demand (investment, government,
and net exports); purchases of land, labor, and
capital services; and the income that
is generated by industry to households and
the consumption
demanded by households because of that income.
It is appropriate to use partially
closed I/O models only when estimating impacts
associated with new economic activity that uses
unused resources or production.
The model is "partially closed" because
household income and personal consumption expenditures
are endogenous, or inside of the modeling system.
Some economic activities, such as investment,
government purchases, and net exports remain exogenous,
or outside of the system. In an open
model, which measures only direct and
indirect economic activities, all economic final
demands, including consumption, are exogenous.
In a fully closed model, all final demands, including
net exports, are endogenous.
Port-Value Multiplier
Port-value multipliers include the farm or manufacturing
sector's value, in addition to the shipping,
handling,
and storage charges associated with moving the
product from the producer or manufacturer to
the
port. The portions of the multiplier that apply
to the producer (farm, food processing,
or other manufacturing sector) value are calculated
separately. To this, the jobs or value related
to wholesale
and retail trade is added, as well as the value
or jobs associated with shipping the commodity
from the farm or producing sector to the port.
These pieces combined constitute one multiplier.
Price Index
A price index is an average of several prices
representative of the commodity group for which
an adjustment for changing prices is being made.
The weight given each representative commodity
is fixed at a given base-year level. See methodology
for how the model handles yearly price changes.
Producer-Value Multiplier
A producer-value multiplier includes just the
activity embodied in the commodity as it leaves
the farm gate or manufacturer's door. It would
be proper to apply this type of multiplier at
the finished product stage of production but before
shipping and handling charges have been added
at the port to the value of an export.
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