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Charles M. Adams Economic Information
David Mulkey Report 251
An Economic Overview of Commercial
Fisheries Production and Marketing
in Lee County, Florida
Food & Resource Economics Department
College of Agriculture
Institute of Food and Agricultural Sciences December 1988
University of Florida, Gainesville 32611
ABSTRACT
The purpose of this study is to estimate the economic impacts
associated with commercial seafood harvesting and wholesaling activities
in Lee County, Florida. Lee County landed 13.2 million pounds of
shellfish and finfish valued at $18.2 million dockside in 1985. The
wholesale value of seafood landed in Lee County is estimated to be
$20.4 million. This includes very little value added processing
due to the lack of processing facilities in the county. Based on 1985
wholesale value estimates of total finfish and shellfish landings ($20.4
million) and 1986 economic impact multipliers, commercial fishing
activity in Lee County generates between $26.4 million and $27.7 million
in economic activity, between $7 and $9 million in local earnings,
and between 504 and 615 full time jobs.
KEY WORDS: Economic impact, commercial fisheries, market channels.
Table of Contents
Page
Executive Summary ............................................... 1
Introduction .......... .......................................... 2
Harvesting Sector ............................................. 2
Wholesaling and Processing Sector ............................. 8
Wholesale Market Value and Product Destination ................ 15
Economic Impacts .............................................. 17
Basic Industries and Regional Econmic Regional Activity .... 17
Commercial Fishing Impacts ................................. 20
Multipliers .............................. .. ............... 21
Estimated Impacts .......................................... 21
Summary ....................................................... 23
AN ECONOMIC OVERVIEW OF CCIERCIAL FISHERIES PRODUCTION
AND MARBKsING IN LE COrTY, FIARIDA
by
Chuck Adams and David Mulkey1
Executive Stiary
The purpose of this study is to estimate the economic impacts
associated with commercial seafood harvesting and wholesaling activities in
Lee County, Florida. Published and unpublished data for the study were
obtained from the National Marine Fisheries Service2 and the Lee County
Division of Planning. The analysis focuses on seafood harvesting and
wholesaling activities for 1985. Key findings of the study include:
"* Lee County landed 13.2 million pounds of shellfish and finfish
valued at $18.2 million dockside in 1985.
"* Lee County ranks third among all Florida counties in terms of
commercial fisheries landings and dockside value.
"* San Carlos Island and Pine Island are the two major areas of
commercial seafood landings and wholesaling activity in Lee
County. San Carlos Island accounts for approximately 52 percent
of the landings and 82 percent of the dockside value.
The wholesale value of seafood landed in Lee County is estimated
to be $20.4 million. This includes very little value added
processing due to the lack of processing facilities in the
county.
Commercial fishing represents a "basic" industry in the local
economy in that it produces a product for sale outside the
county. Dollars generated through these out-of-county sales,
when respent in the county, produce additional county-wide
economic impacts. Therefore, the sale of fish outside the county
1Authors are Assistant Professor and Professor, respectively, Food and
Resource Economics Department, IFAS, University of Florida, Gainesville.
2State and county commercial landings data ;-*re obtained from the
National Marine Fisheries Service, Southeast Center, Miami, Florida.
1
2
triggers a chain of local spending which generates income and
leads to additional local spending.
"Based on 1985 wholesale value estimates of total finfish and
shellfish landings ($20.4 million) and 1986 economic impact
multipliers, commercial fishing activity in Lee County generates
between $26.4 and $27.7 million in economic activity, between $7
and $9 million in local earnings, and between 504 and 615 full
time jobs.
"* Further studies could focus on better identifying local seafood
markups and market channels, as well as assessing the need for
and commercial feasibility of value-added seafood processing in
Lee County.
Introduction
The commercial fishing industry in Lee County, Florida is an important
component of the total seafood production industry in Florida. In 1985,
commercial fishermen in Lee County landed 13.2 million pounds of finfish
and shellfish with a dockside value of $18.2 million (National Marine
Fisheries Service, 1986). This production accounted for approximately 8
percent of the total state landings of finfish and shellfish in 1985 (Table
1). Lee County ranked as the third most important county in the state in
terms of both seafood landings and dockside value (Table 2). The wholesale
value of seafood landed in Lee County is estimated to be $20.4 million.
This study provides an estimation of the economic impact associated with
seafood harvesting and wholesaling eccivities in Lee County Florida.
Harvesting Sector
Fisheries landings in Lee County have been somewhat erratic over the
past fifteen years (Table 3). An overall trend in finfish landings is
3
Table 1. Percent of Total Florida Commercial Landings* and Dockside Value*
Represented by Lee County, Florida: 1985.
Finfish Finfish Shellfish Shellfish
pounds value pounds value
(Ibs) ($) (lbs) ($)
Lee County 7,324 4,951 5,888 13,219
Florida 95,530 63,058 77,824 112,016
Lee County %
of Florida 8% 8% 8% 12%
Data Source: National Marine Fisheries Service.
*Units of one thousand.
4
Table 2. Top Ten Florida Counties Producing Commercial Fisheries Landings:
1985.
Pounds Dockside
County Landed* Value*
Ibs Rank $ Rank
Monroe 24,976 1 38,978 1
Brevard 18,400 2 22,335 2
Lee 13,206 3 18,170 3
Pinellas 9,742 6 14,180 4
Franklin 10,342 5 12,992 5
Bay 11,484 4 9,083 6
Broward/Dade 3,123 10 6,977 7
St. Lucie 5,486 7 5,091 8
Duval 4,351 9 5,058 9
Dixie/Taylor 4,815 8 4,815 10
Data Source: National Marine Fisheries Service.
*Units of one thousand.
Table 3. Finfish and Shellfish Landings* and Dockside Value* for Lee County, Florida, 1971-85.
"Shell- Shell- Shell- Total
Finfish Finfish Finfish Shell- fish fish fish Total county
Finfish dockside percent percent fish dockside percent percent county dockside
Year pounds value total lbs. total val. pounds value total lbs. total val. pounds value
1971 10,006 1,932 0.66 0.37 5,241 3,249 0.34 0.63 15,307 5,181
1972 11,697 2,453 0.69 0.36 5,162 4,343 0.31 0.64 16,859 6,796
1973 12,233 2,630 0.68 0.32 5,692 5,687 0.32 0.68 17,925 8,317
1974 13,053 3,373 0.68 0.38 6,027 5,603 0.32 0.62 19,080 8,976
1975 11,859 3,256 0.69 0.34 5,272 6,236 0.31 0.66 17,131 9,492
1976 10,260 3,434 0.66 0.27 5,348 9,284 0.34 0.73 15,608 12,718
1977 9,018 3,289 0.59 0.25 6,354 9,796 0.41 0.75 15,372 13,085
1978 10,358 3,965 0.66 0.32 5,335 8,339 0.34 0.68 15,693 12,304
1979 10,021 4,079 0.56 0.20 7,835 16,588 0.44 0.80 17,856 20,667
1980 11,592 4,964 0.71 0.36 4,699 8,919 0.29 0.64 16,291 13,883
1981 11,419 5,468 0.67 0.36 5,603 9,904 0.33 0.64 17,022 15,372
1982 10,383 6,068 0.73 0.39 3,867 9,511 0.27 0.61 14,250 15,579
1983 10,249 6,739 0.70 0.39 4,322 10,642 0.30 0.61 14,571 17,381
1984 7,238 4,842 0.59 0.30 5,100 11,455 0.41 0.70 12,428 16,297
1985 7,324 4,951 0.55 0.27 5,880 13,219 0.45 0.73 13,204 18,170
Data Source: National Marine Fisheries Service.
Units of one thousand.
6
difficult to assess due to inadvertent data collection problems for a
number of years. Therefore, the dramatic "decline" in finfish landings for
1984 and 1985 is more apparent than real. Some species, such as spotted
sea trout, however, have reportedly been experiencing long-term gradual
declines in catch (Florida Department of Natural Resources). Shellfish
landings, on the other hand, have remained relatively stable since 1971.
The variation in finfish and shellfish catch are most likely associated
with year to year fluctuations in biological and environmental conditions,
as well as market conditions which may affect effort.
Several species are of commercial importance to seafood producers in
Lee County (Table 4). The most important commercial species is shrimp--
in particular, pink shrimp. Pink shrimp represent over 95 percent of the
shrimp landed in Lee County. In 1985, 5.5 million pounds (heads-on) of all
species of shrimp were landed and generated $12.8 million dockside.
Black mullet is the most important finfish species landed. A total of
4.7 million pounds of black mullet, valued at $1.4 million dockside, were
landed in 1985. Other species of commercial importance include grouper,
scamp, swordfish, sea trout, pompano, and various snapper species.
Lee County is a leader in the landings of certain species (Table 4).
For example, one-fourth of the state's black mullet and spotted sea trout
are landed in Lee County. In addition, Lee County accounts for
approximately 16 percent and 17 percent of the total Florida landings of
shrimp and pompano, respectively., Prior to a state mandated moratorium on
catching red drum, Lee County landings accounted for over 20 percent of
Florida's red drum.
7
Table 4. Top Ten Commercial Species for Lee County, Florida: 1985.
Pounds Percent of Dockside
Species Landed3 State Value3
bs - - $-
Shrimpi 5,486 17 12,823
Black Mullet 4,703 24 '1,423
Grouper/Scampl 902 8 1,397
Swordfish 213 6 655
Spotted Sea Trout1 397 26 393
Pompano 102 16 304
Tunal 155 4 301
Stone Crab2 40 2 170
Snapperl 175 1 151
Blue Crab 92 2 74
Other Species 941 479
Total 13,206 8 18,170
Data Source: National Marine Fisheries Service.
1All species included.
20nly claw landings given.
3Units of one thousand.
8
There are two major port areas in Lee County where local commercial
fishery landings are offloaded and prepared for the wholesale market (Table
5). Pine Island accounted for 6.4 million pounds of landings and $3.3
million dockside value in 1985. The remaining production was offloaded to
facilities on San Carlos Island (landings in other areas of the county are
negligible). San Carlos Island accounts for approximately 52 percent of
the finfish and shell fish landings and 82 percent of the dockside value.
Pine Island primarily produces nearshore species such as mullet, sea trout,
and pompano. The species offloaded primarily at San Carlos Island include
grouper, snapper, swordfish, and shrimp.
There were 1716 licensed commercial vessels in Lee County in 1985
(Table 6). This includes both commercial fishing vessels and vessels used
in other commercial applications. The majority of the registered
commercial fishing vessels were used in finfish, shrimp, and blue crab
production (Table 7). There are approximately 1100 full and part-time
commercial fishermen registered in Lee County (i.e. saltwater products
licenses) (Table 8).
Wholesaling and Processing Sector
Although a considerable volume of seafood is landed in Lee Coun-y,
little seafood processing occurs in the county. For example, zhe vast
majority of the shrimp -- the most important commercial species in bhe
county -- is off-loaded from vessels, washed, graded, boxed, and iced for
shipment to processing facilities in other areas of the state. Virtually
no further processing, such as peeling, deveining, or breading of shrimp is
Table 5. Commercial Fisheries Landings* and Dockside Values* for the Major Port
Areas in Lee County, Florida in 1985.
Dockside
Landings Value
Finfish Shellfish Total Finfish Shellfish Total
Pounds (Dollars)
Pine Island 5,868 489 6,357 2,533 791 3,324
San Carlos
Island 1,452 5,392 6,844 2,417 12,428 14,845
Other 4 -- 4 2 -- 2
Total 7,324 5,881 13,205 4,952 13,219 18,171
Data Source: NMFS; Lee County Division of Planning, Department of Growth Management
and Capital Improvements.
*Units of one thousand.
10
Table 6. -- Recreational and Commercial Vessel Registration by Florida
County, 1986.
% of % of
Recreational Number of Commercial
Number of Boats in Commercial Boats in
County Recreational Florida Boats Florida
Escambia 14,542 2.5 555 1.8
Santa Rosa 5,933 1.0 309 1.0
Okaloosa 9,828 1.7 622 2.0
Walton 2,176 .4 148 .5
Bay 11,602 2.0 1,167 3.8
Gulf 1,672 .3 292 1.0
Franklin 1,033 .2 1,106 3.6
Wakulla 1,785 .3 471 1.5
Jefferson 569 .1 8 .0
Taylor 1,810 .3 214 .7
Dixie 1,233 .2 479 1.6
Levy 1,715 .3 357 1.2
Citrus 9,157 1.6 959 3.1
Hernando 3,958 .7 162 .5
Pasco 10,097 1.7 310 1.0
Pinellas 36,240 6.2 1,504 4.9
Manatee 12,392 2.1 589 1.9
Sarasota 15,102 2.6 478 1.6
Hillsborough 34,967 6.0 1,056 3.5
Collier 12,378 2.1 1,062 3.5
Charlotte 10,076 1.7 500 1.6
Lee 23,027 3.9 1,716 5.6
Monroe 12,167 2.1 3,881 12.7
Dade 44,767 7.7 1,230 4.0
Broward 34,739 6.0 1,146 3.8
Indian River 5,893 1.0 488 1.6
St. Lucie 5,588 1.0 384 1.3
Martin 8,287 1.4 477 1.6
Palm Beach 24,322 4.2 677 2.2
Brevard 20,651 3.5 1,572 5.2
Nassau 2,347 .4 263 .9
Duval 28,062 4.8 934 3.1
Putnam 5,443 .9 381 1.2
St. Johns 3,180 .5 229 .8
Volusia 16,343 2.8 826 2.7
Flagler 1,831 .3 35 .1
Florida 583,035 100.0 30,496 100.0
Source: Florida Department of Natural Resources, unpublished vessel
registration data.
Table 7. -- Intended-Use Designation for Commercially Registered Vessels.
County Fish Shrimp Oyster Sponge Charter Crawfish Live Bait Mackerel Hire Blue Crab
Escambia 380 48 3 0 18 1 0 3 36 1
Santa Rosa 162 4 1 0 2 71 0 0 8 0
Okaloosa 262 28 0 0 63 50 1 1 63 1
"Walton 113 7 3 0 1 1 0 0 11 0
"Bay 556 87 55 0 39 8 0 2 141 2
Gulf 149 20 6 0 3 37 0 0 36 1
Franklin 398 86 278 0 1 193 0 0 7 0
Wakulla 278 11 13 1 0 106 0 1 7 9
Jefferson 10 1 0 0 0 0 0 0 0 0
Taylor 144 8 0 0 1 0 0 2 5 20
Dixie 293 9 10 0 2 73 1 0 38 9
Levy 192 2 2 0 0 92 0 1 13 0
Citrus 347 20 5 0 10 342 0 1 81 13
Bernando 71 3 2 0 2 26 0 0 29 6
Pasco 181 28 1 0 11 3 1 6 4 4
Pinellas 650 60 2 3 93 11 6 9 248 16
Manatee 332 14 0 0 27 3 1 1 108 6
Sarasota 275 2 0 0 37 2 0 0 45 2
Billsborough 346 44 1 0 184 5 2 1 342 0
Collier 594 2 0 0 129 9 1 4 168 0
Charlotte 251 11 0 0 29 93 3 0 38 8
Lee 817 94 6 0 107 14 12 2 337 47
Monroe 2,291 84 1 14 173 244 6 6 387 1
Dade 645 19 0 8 77 200 2 2 127 0
Broward 215 1 0 0 308 34 1 3 340 1
Indian River 281 2 1 0 4 134 0 0 2 1
St. Lucie 273 1 2 0 6 6 0 2 6 0
Martin 157 0 1 0 18 107 0 1 95 0
Palm Beach 366 0 1 0 49 14 0 2 105 2
Brevard 1,022 10 30 0 17 256 0 3 47 10
"Nassau 101 99 3 0 7 0 2 0 14 2
Duval 327 39 2 1 12 231 1 1 138 5
Putnam 236 3 0 0 3 0 1 0 84 2
St. Johns 88 11 5 0 6 44 0 1 23 8
Volusia 427 35 3 1 7 124 6 2 141 6
Flagler 16 1 0 0 1 0 0 1 15 0
Florida 15,382 918 440 30 1,490 3,133 54 81 4,000 187
Source: Florida Department of Natural Resources Vessel Titling and Registration system unpublished data.
12
Table 8. Seafood Producer Licenses and Permits in Florida: 1985.
Total % State
producer Saltwater saltwater
licenses & products products
County permits licenses licenses
Escambia 127 401 2.2
Santa Rosa 97 281 1.5
Okaloosa 78 275 1.5
Walton 51 77 .4
Bay 215 617 3.3
Gulf 68 94 .5
Franklin 242 730 3.9
Wakulla 168 162 .9
Jefferson 2 7 .0
Taylor 179 170 .9
Dixie 141 197 1.1
Levy 187 153 .8
Citrus 335 306 1.6
Hernando 106 70 .4
Pasco 280 343 1.8
Pinellas 726 1,034 5.6
Manatee 269 326 1.8
Sarasota 280 308 1.7
Hillsborough 442 508 2.7
Collier 286 429 2.3
Charlotte 283 274 1.5
Lee 670 1,130 5.9
Monroe 3,533 2,937 15.8
Dade 1,507 1,012 5.4
Broward 355 540 2.9
Indian River 66 318 1.7
St. Lucie 87 357 1.9
Martin 85 273 1.5
Palm Beach 447 822 4.4
Brevard 442 1,455 7.8
Nassau 127 144 .8
Duval 310 627 3.4
Putnam 122 64 .3
St. Johns 139 176 .9
Volusia 274 647 3.5
Flagler 7 26 .1
Florida 13,673 18,592
Source: Florida Department of Natural Resources, Bureau of Marine
Research, unpublished data.
13
done in Lee County due to the lack of major processing facilities in the
county. The same is true for finfish. Most of the finfish, such as
grouper and mullet, is simply washed, packaged, and shipped fresh (i.e.
whole and not frozen) by truck to other areas of the state or out-of-state
for further processing. Therefore, the value added to seafood from
processing by Lee County fish-houses and primary handlers is relatively
small compared to other areas of the state, such as the Tampa area, where a
variety of seafood processing activities occur. As a result, most seafood
that leaves Lee County is sold into the wholesale (i.e. wholesalers or
retail buyers) market as fresh product. Lee County issued approximately 50
seafood wholesale dealer licenses in 1985. In addition, about 95 licenses
were issued for the retail sale of seafood (Table 9).
Although little value-added processing facilities exist locally, Lee
County does possess a significant freight service facility that is unique
to the south Florida region. The facility, a 73,500 square foot cold
storage freezer warehouse and food distribution center, is owned by Florida
Freezer Corporation and was primarily funded by a $3.3 million industrial
revenue bond approved in 1985 by the Lee County Industrial Development
Authority and the County Commission. The facility should serve as a major
center for local and regional seafood collection and storage, as well as
regional and national seafood distribution.
The mark-up associated with moving Lee County seafood products from
dockside into the wholesale market varies by species. For example, black
mullet, marketed in the whole/fresh form, are accorded a 10-20 cent per
pound wholesale mark-up from the dockside per pound price. The actual mark-
up will depend on whether the fish is produced in the roe or non-roe season
14
Table 9. -- Wholesale and Retail Dealers Licenses by Florida County, 1985.
Wholesale % State Retail Retail % State
County dealer wholesale central other retail
licenses licenses licenses licenses licenses
Escambia 20 1.8 61 40 2.2
Santa Rosa 9 .8 31 5 .8
Okaloosa 19 1.7 68 5 1.6
Walton 6 .5 33 0 .7
Bay 56 4.9 142 187 7.1
Gulf 9 .8 38 2 .9
Franklin 50 4.4 39 0 .8
Wakulla 27 2.4 36 4 .9
Jefferson 0 .0 7 0 .2
Taylor 18 1.6 43 1 1.0
Dixie 13 1.1 27 0 .6
Levy 18 1.6 39 17 1.2
Citrus 19 1.7 71 17 1.9
Hernando 3 .3 25 3 .6
Pasco 21 1.8 67 12 1.7
Pinellas 56 4.9 85 100 4.0
Manatee 19 1.7 39 6 1.0
Sarasota 13 1.1 36 11 1.0
Hillsborough 34 3.0 95 287 8.3
Collier 19 1.7 35 3 .8
Charlotte 12 1.1 40 18 1.3
Lee 51 4.5 84 11 2.1
Monroe 66 5.88 165 4 3.7
Dade 175 15.3 340 15 7.6
Broward 63 5.5 161 218 8.2
Indian River 13 1.1 26 4 .6
St. Lucie 16 1.4 23 1 .5
Martin 13 1.1 22 3 .5
Palm Beach 51 4.5 113 14 2.7
Brevard 48 4.2 88 22 2.4
Nassau 9 .8 21 2 .5
Duval 49 ..3 104 88 4.2
Putnam 4 .4 30 12 .9
St. Johns 22 1.9 37 3 .9
Volusia 45 3.9 70 14 1.8
Flagler 0 .0 10 0 .4
Florida 1,142 100.0 2,694 1,930 100.0
Source: Florida Department of Natural Resources, Bureau of Marine
Research unpublished dealer license data.
15
(i.e. high value mullet roe has a market of its own). In addition, the
mark-up on shrimp will depend on the count size of the shrimp in question.
For example, 16-20 count headless shrimp may have a wholesale mark-up of
30-40 cents per pound. Other shrimp, such as 21-30 count and smaller, may
have a mark-up of only 5-25 cents per pound heads-off. Grouper and snapper
commonly have a wholesale mark-up of 25-30 cents per pound over dockside
value. The mark-up on other species is variable. Therefore, the value
added to seafood landed in Lee County will depend on species and season, as
well as the specific handling tasks associated with preparing the product
for the wholesale market. The markups also will obviously vary depending
on market destination.
Wholesale Market Value and Product Destination
The wholesale value of seafood landed in Lee County was estimated to
be approximately $20.4 million in 1985 (Table 10). This represents a value
added estimate of $2.2 million over dockside value. The wholesale value of
all finfish products is estimated to have been $6.6 million. The wholesale
value for shellfish is estimated to have been approximately $13.9 million.
San Carlos Island accounts for approximately 78 percent of the wholesale
value, while Pine Island accounts for the remaining 22 percent.
The majority of the seafood landed in Lee County leaves the county as
it moves into the wholesale market. In general, 60 percent of the locally
caught seafood reportedly leaves Lee County when sold wholesale. This
estimate, however, varies by species and may be somewhat conservative. For
example, an estimated 70 percent of the shrimp landed in Lee County leaves
the county after being prepared for the wholesale market. Other locally
produced, high-value species, such as roe mullet and stone crab, may also
16
Table 10. Estimated Dockside and Wholesale Seafood Valuel for Seafood
Landed in Lee County, Florida.
Dockside2,3 Wholesale2,3
Finfish $ 4,951 $ 6,572
Shellfish $13.219 Shrimp Other
$13,419 $ 446
Total $18,170 $20,437
Port Area
Pine Island $ 3,324 $ 4,583
San Carlos Island $14,845 $15,854
Data Source: National Marine Fisheries Service.
1 Mullet are assumed to have a 10 per pound markup from dockside value
during the non-roe season and 20g during the roe season. Grouper and
snapper have a 25-30g markup. All the other finfish are assumed to have
a 10-15g markup. Shrimp are assumed to have a 30-40g markup for 16-20
ct. and 5-25g markup for smaller shrimp.
2 Data represents 1985.
3 Units of one thousand.
17
have a high percentage of total county landings being exported out of Lee
County. It was assumed that the amount of seafood imported into Lee County
from other regions for preparation for wholesale was negligible.
Economic Impacts
Basic Industries and Regional Economic Activity: Previous sections
presented information on the dockside and wholesale value of the commercial
fishery catch in Lee County. Dockside value (i.e. sales by fishermen) of
all species exceeds $18 million and wholesale value exceeds $20 million.
However, these data do not fully reflect the total economic impact of the
commercial fishing industry in Lee County. Commercial fishing represents a
"basic" industry in the local economy in that it produces a product for
sale outside the county. Dollars generated through these out-of-county
sales, when respent in the county, produce additional county-wide economic
impacts. Prior to discussing specific impact estimates for commercial
fishing, discussing the relationship between basic industries and regional
economic activity will clarify terminology and provide a basis for the
discussion of impact estimates.
The idea of a basic industry is grounded in the concepts of "export
base" theory. Using this approach, local economy of a region, Lee County
in this study, consists of two types of businesses, those that produce for
markets located outside the county and those that produce products to
satisfy local demands. Businesses that sell their products outside the
local area are designated "basic industries", and collectively, these
businesses comprise the export sector of the local economy. Businesses
18
which serve local needs are designated as "non-basic" industries. In a
functional sense export industries bring outside dollars into the local
area through sales in markets located elsewhere, and then the non-basic
businesses recirculate those dollars in the local economy.
Thus, the total economic activity in a local area is a function of the
size of the area's export sector. The larger the export sector, the larger
the local labor force, and the larger the demand for locally originated
goods and services. Further, the total economic activity in a local area
changes as changes occur in the amounts of goods and services sold outside
the local area by basic industries. For example, when basic industries
expand sales, they increase their labor force and their orders for other
local goods and services used to produce the export product. The result is
a "multiplier" or "ripple" effect throughout the local economy. Growth (or
decline) in a local area results from the expansion (contraction) of sales
outside the area by the basic sector of the economy.
A "basic" industry directly affects economic activity in the county
when its product is sold outside the local area. For commercial fishing in
Lee County, this would include sales, jobs, and earnings generated in
commercial fishing and other activities related to the preparation of the
catch for shipping. These direct activities produce additional indirect
effects in the local economy as dollars earned through the sale of fish are
rejpent locally. Indirect effects represent purchases of local products by
fishermen such as ice, fuel, boat parts and repair services, etc.. All the
indirect effects are additional economic activity in the county and are
indicative of additional jobs and income generated by the sale of fish
outside the local area.
19
Direct and indirect activities associated with commercial fishing and
the sale of the catch outside the county then produce additional (induced)
local impacts. These impacts are associated with the spending of income
earned in the direct and indirect activities. This spending translates
into local retail sales, local bank accounts, and purchases of a wide
variety of consumer goods.
The total impact of a basic industry such as commercial fishing must
consider the sum of direct, indirect and induced activities. In essence,
the sale of fish outside the county triggers a chain of local spending
which generates income and leads to additional spending. This process,
however, is not infinite in nature, and at each round of spending, some
dollars are lost to the local economy. Leakages are in the form of savings
in non-local institutions, taxes and other fees paid to the state and
federal governments, and payments for goods and services which are
purchased outside the local area.
The total responding associated with one dollar of sales outside the
area by a particular industry is designated the "multiplier" effect. For a
particular sector the multiplier is a measure of the total economic
activity associated with the external sales of that sector. Multiplier
effects may be measured and expressed in terms of output, income
(earnings), or employment. The size of the multiplier varies with the size
of the local area and with the industry in question. In general, the
larger and more diverse the localleconomy and the more complex the industry
in terms of local economic linkages, the larger the multiplier.
Multipliers may be used to assess the total economic impact of a
particular industry once out-of-county sales are known. They may also be
used to assess increases/decreases in local economic activity associated
20
with the expansion or contraction of a local industry. It is important to
note that multipliers consider only expenses (purchases) associated with
the current production of a product. They do not include investment
activity. For example, in commercial fishing, multipliers presented later
will include boat repair and maintenance but do not consider the purchase
of new boats.
Commercial Fishing Imoacts: Multipliers which measure the regional
impact of particular industries are based on regional input-output models
which reflect the distribution of sales and purchases for each industry in
the regional economy.3 For each industry, the model shows the dollar value
of sales and purchases from every other local industry, thereby providing a
picture of interactions within the local economy and allowing dollars to be
traced through the economy. Multipliers for commercial fishing in Lee
County were estimated by the Bureau of Economic Analysis of the U.S.
Department of Commerce using their Regional Input-Output Modeling System
(RIMS II).4 Multipliers are measured in terms of output (sales),
employment, and earnings and capture the total impact of additional sales
for each industry sector in Lee County.
Multipliers: Table 11 presents output, earnings, and employment
multipliers for commercial fishing in Lee County. The output multiplier of
3For a More detailed description of input-output models, see: W.H.
Miernyk, The Elements of Input-Otutu Analysis, Random House, New York,
1965.
4For a more detailed explanation of multiplier estimation techniques,
see: Bureau of Economic Analysis, Regional Multipliers: A User Handbook
for the Regional Input-Output Modeling System (RIMS II), U.S. Government
Printing Office, Washington, D.C., 1986 and Joseph V. Cartwright, Richard
M. Beemiller, and Richard D. Gustely, RIMS II Regional Input-Output
Modeling System, National Technical Information Service, Washington, D.C.,
1981.
21
1.49 means that one dollar of fishery sales outside Lee County results in a
total impact of $1.49 in the local economy. This includes the $1.00 of
direct out-of-county sales plus an additional 49 cents in indirect and
induced impacts. Earnings and employment multipliers, respectively,
measure the total income and employment impacts of each one million dollars
in external sales. A sale of one million in fishery products outside the
county generates $594,000.00 in local earnings and 41 fulltime equivalent
jobs.
Estimated Impacts: Table 12 presents impact estimates for commercial
fishing in Lee County. Preparation of these estimates uses the impact
multipliers and estimates of the value of fishery sales outside the county.
Since precise estimates of external sales are unavailable, four different
possibilities were considered to prepare a range of estimates. Scenarios
were based on conversations with individuals familiar with the local
fishing industry. The first set of estimates assume that 60 percent of the
wholesale value of fish landed in Lee County represent sales outside the
county; the second assumes that 70 percent of the shrimp and 60 percent of
all other species represent out-of-county sales; the third assumes that 70
percent of all species are sold outside the county; and the fourth assumes
that 70 percent of the shrimp and 80 percent of all other species are sold
outside the local area.
Using the assumptions above, Table 12 presents the value of out-of-
county sales and resulting impact estimates. Total sales impacts range
from slightly over $26.4 million under the most conservative set of
assumptions regardii< out-of-county sales to almost $28 million under the
fourth set of assumptions. Earnings impacts under the various assumptions
range from $7.306 million up to $8.914 million, and employment ranges from
22
Table 11. Lee County Economic Impact Multipliers for Output, Earnings, and
Employment in Commercial Fishing, 1986.
Sector Output Earnings Employment
Commercial fishing 1.4856/$1.00* 0.5940/Million $* 41.0/Million $*
Source: Estimated by the Bureau of Economic Analysis, U.S. Department of
Commerce, using the Regional Input-Output Modeling System (RIMS
II).
*Sales outside of county.
23
Table 12. Estimates of the Economic Impacts of Out-of-County Sales of
Seafood From Lee County, Florida, Under Four Distribution
Scenarios.
WHOLESALE VALUE OF COMMERCIAL FISH*
Wholesale to
Total Wholesale Wholesale to out-of-county
Distribution Scenarios value (1985) local market markets
Scenario 1 $20,437 $8,175 $12,262
60% of all species sold
out of county
Scenario 2 $20,437 $6,834 $13,603
70% of shrimp and
60% of all other species
sold out of county
Scenario 3 $20,437 $6,131 $14,306
70% of all pieces sold
out of county
Scenario 4 $20,437 $5,430 $15,007
70% of shrimp and
80% of all other species
sold out of county
*Includes all species of fin fish and shellfish landed in Lee County.
Units of one thousand.
24
Table 12. continued
ESTIMATED IMPACT OF WHOLESALES TO OUT OF COUNTY MARKETS IN 1985
Estimated Wholesale Economic
Distribution to out-of-county Activity Earnings Employment
Scenario markets (1985) Generated Generated Generated
Scenario 1 $12,262 $26,391* $7,306 504
60% of all
species sold
out of county
Scenario 2 $13,603 $27,043* $8,080 558
70% of shrimp
and 60% of all
other species
sold out of
county
Scenario 3 $14,306 $27,384* $8,498 587
70% of all
species sold
out of county
Scenario 4 $15,007 $27,724* $8,914 615
70% of shrimp
and 80% of all
other species sold
out of county
*Includes sales to local markets
25
504 fulltime equivalent (FTE) jobs up to 615 jobs. Given that the
multipliers used in this study relate to the entire county (i.e. not
regions or areas within the county), the only alternative is to assume that
the distribution of economic impacts between port areas is consistent with
the distribution of wholesale value. Under this assumption, San Carlos
Island accounts for approximately 78 percent of the estimated economic
impacts, while Pine Island accounts for the remainder.
Summary
Based on 1985, Lee County commercial fisheries landings data and 1986
economic impact multipliers, commercial fishing in Lee County generates
between 26.4 and 27.7 million dollars in economic activity, between 7 and 9
million dollars in local earnings, and provides the equivalent of between
504 and 615 fulltime jobs. Again these are estimates based on the
assumptions outlined above regarding out-of-county sales and on the
assumptions inherent in estimating multipliers for local areas. Thus.
numbers presented should be interpreted only as estimates and not as
precise measures of impacts. Importantly, estimates of total impact are
conservative since investment purchases of the industry are not considered
in the multipliers. In addition, the economic impact of tourist
consumption of locally landed seafood has not been included.
The findings of this study suggest topics of further analysis
concerning the commercial fishing industry in Tee County. A more thorough
accounting of wholesale markup and market channels could provide a better
assessment of the wholesale value of locally produced seafood to the Lee
26
County economy. In addition, an analysis of the potential for further
commercial value-added seafood processing and related facilities in Lee
County is needed. Such a study could identify the current need and
barriers of entry into seafood processing activities, as well as identify
the feasibility of locating the necessary facilities in Lee County.
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