Economic Contribution of the Ontario Chicken Industry - Study prepared October 2013
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Economic Contribution of
the Ontario Chicken Industry
Study prepared October 2013
Farming and food, stronger together.
A new era of industry collaboration for profitable
growth, competitiveness and sustainability.
Ontario Farm Products
Marketing Commission
Table of Contents
Executive Summary............................................................................................. 1
1.0 Introduction........................................................................................................... 2
2.0 Chicken Farming in the Province of Ontario.................................................... 4
3.0 Chicken – An Integral Part of the Farm Economy........................................... 8
4.0 Economic Contribution of Chicken Farming in Ontario.................................. 10
5.0 Contribution of Primary Processing of Ontario Chicken................................ 18
6.0 Summary of Findings........................................................................................... 24
Annex I – Background on the Study Authors.................................................. 28
Annex II – An Overview of the Model............................................................... 28
Executive Summary
Ontario’s chicken industry is an important contributor to the sales by Ontario chicken farmers generates $2.29 of economic
economic health and growth of the province. activity. When combined with the economic activity of
chicken processors, every dollar spent results in $2.34
Ontario boasts the largest chicken producer, processor and in broader economic activity.
consumer base in Canada, with more than 200 million chickens
grown every year by more than 1,000 independent, successful Increases or decreases in chicken output will have a
chicken farms and processed by some 18 primary processors. corresponding impact on the economy. For example, if
Ontario can increase chicken production by 10%, it will
While most of Ontario’s chicken production is concentrated in result in $272 million of additional economic activity, and
a band just west of the Greater Toronto Area that stretches 1,913 new jobs created with an overall increase in wage
from Lake Erie to the Bruce Peninsula, the benefits of chicken payments by $84 million. The increase to Ontario’s GDP
farming and processing stretch across the province. Chicken will be $138 million, and governments will collect an
farmers have a marketplace value of $760 million, with a additional $39 million in tax revenue.
Gross Domestic Product of $819 million that supports 11,409
full-time equivalent jobs.
Including the primary processing of chicken, the industry
contributes $2.72 billion to the Ontario economy, with a GDP
of $1.38 billion and supporting 19,183 full-time equivalent jobs.
Tax revenues generated by the chicken industry for the
federal, provincial and local governments total $391 million.
Ontario chicken farmers spent $342 million on feed in
2012, accounting for nearly a quarter of the sales volume
of the province’s feed manufacturers. Supplying this feed
accounted for 19% of all soybeans crushed in Ontario, and
required 14,000 truckloads of corn to be delivered to the
feed manufacturers – that’s 54 trucks on each workday of
the year. Chicken farmers and processors also support chick
hatcheries, energy suppliers, general equipment suppliers
and labour.
But the economic impact of chicken farming goes beyond
agriculture and processing plants. Every dollar of chicken
11.0 Introduction
The Ontario chicken industry generated $760 million in farm 1.1 Project Focus and Organization
cash receipts in 2012, representing 6.6% of all farm level of this Report
cash receipts received from the market by Ontario farmers.
The chicken industry is a large and valuable contributor to This report provides a perspective on the overall importance of
the Ontario farm economy, as well as to the overall provincial the chicken industry in Ontario from a few different viewpoints.
economy. When the value of processed chicken is included,
this overall market value of Ontario’s chicken industry grows Section 2.0 illustrates the importance of chicken farming
to $1.16 billion; this is valued as primary processed chicken across Ontario, which accounts for 6.6% of market cash
and does not include highly processed chicken such as receipts across the province. In counties where chicken
breaded chicken fingers or stuffed chicken products. This farming is more predominant, such as Wellington County,
report shows that the overall economic consequence of the the chicken industry can be as much as double that value,
demonstrating the significant impact of chicken production
on the farming economy in rural Ontario.
When the value of processed chicken is
In Section 3.0, we examine the linkages between chicken
included, this overall market value of Ontario’s
farming and the agri-food sector, including the chick hatching
chicken industry grows to $1.16 billion; this is sector and the corn and soybean sectors that supply the feed
valued as primary processed chicken and for Ontario chickens.
does not include highly processed chicken.
The overall contribution of chicken farming to the province of
Ontario, such as the amount of GDP (value added) contributed
by chicken production throughout the province, is explored in
Ontario chicken supply chain is rather significant, with it Section 4.0. Across the economy, chicken farming generates
contributing to more than 19,000 full-time jobs throughout more than $800 million in GDP. The approach used to
the Ontario economy. measure the economic contribution of chicken farming is a
special application of a generic regional impact model (RIM:
The overall economic impact of the Ontario chicken industry Canada) developed by Econometric Research Limited (ERL).
and its supply chain cannot be ignored. Partners in the It is a unique model that captures the economic impact of
chicken industry of Ontario engaged outside economic different activities at the provincial and national levels. The
expertise1 to provide factual information to stakeholders model is based on a novel technology that integrates input
and policy decision-makers on the economic contribution output analysis and location theory. [See Annex II for more
of the supply managed chicken industry within the province background on the model and on Input/Output analysis.]
of Ontario and its importance to the overall farm economy
across Ontario2. The model utilizes a large set of economic and technical
databases for Canada that are regularly published by
1 The JRG Consulting Group in collaboration with Econometric Research Limited (ERL), a firm that specializes in economic impact modelling and analysis. (Annex 1 provides a short background on the study authors.)
2 In the near future, CFO may collaborate with the other supply-managed commodities in Ontario to offer a broader view of the contribution of the supply-managed sector to the Ontario economy.
2Statistics Canada3. A short list of Statistics Canada data piece that is covered in Section 5.0. This analysis includes all
used in the model includes the inter-provincial input output upstream economic activities4 based on shipments of primary
tables, employment by sector, taxes by type of tax and the processed chicken. Primary processed chicken includes
level of government collecting it, prices of products, energy cut up fresh chicken as shipped by processors to retail
used in physical and energy units, etc. establishments. The analysis was conducted in this manner
for two reasons. First, data is available on the wholesale
Some of the key impact indicators generated by the model value of primary processed chicken, and this is not the case
include value added, gross output (value of transactions in for further processed chicken such as chicken kiev. Second,
the economy), employment, wages and salaries, and taxes this measure is a good indication of the overall economic
received by governments. activity that may be at risk if the regulatory features of the
supply management are no longer in force5.
The Ontario chicken economy includes more than chicken
farming; processing Ontario-grown chicken is a significant
3 Statistics Canada: Inter-provincial Input Output Tables, Catalogue No. 15F0042XDB.
4 These are backward linkages through input suppliers, such as chicken farmers and feed manufacturers.
5 Major pillars of supply management include (1) control of imports to pre-specified access levels, (2) production controls within Canada, and (3) the ability to establish a made in Canada price for the live chicken
supplied by Ontario chicken farmers to processors.
32.0 Chicken Farming in
the Province of Ontario
Ontario is the largest chicken-producing province in Bruce Peninsula to the shores of Lake Erie (see Figure 2.1–
the country, accounting for 32.2% of Canadian chicken counties with darker shading have a larger share of the
production6 in 2012. This share of national production is overall Ontario chicken production). Wellington County is the
less than Ontario’s share of the Canadian population, which provincial leader in chicken production, with $108.9 million in
stands at 38.7% with a population of 13.5 million Ontarians. sales value for 2012 accounts and 14.3% of Ontario’s chicken
Quebec is the second largest chicken-producing province and production, which is followed by Huron County at 12.3% and
accounts for 27.4% of Canada’s chicken output. Niagara Region at 11.7%.
In 2012, Ontario chicken famers shipped 447 million The map (Figure 2.1) also indicates the location of the 18
kilograms of chicken to primary processors, which generated primary chicken processing plants in Ontario that receive
$760 million in farm cash receipts, as reported by Statistics live chicken supplied by Ontario farmers. These primary
Canada. This value is: processors are located in the chicken production regions
and near the major chicken consuming region (the GTA).
• 14.4% of farm cash receipts generated by Ontario’s
livestock and poultry sector; and The three largest counties, in terms of chicken production,
account for 38% of provincial production, with the top five
• 6.6% of all market based cash receipts received by accounting for 55.4% of Ontario’s chicken production. The top
Ontario farmers in 2012. 10 chicken producing counties are highlighted in light grey in
Table 2.1, and account for 79% of Ontario’s chicken production.
Within Ontario, the importance of chicken production varies
across the province, but it is largely concentrated in a band
west of the Greater Toronto Area that stretches from the
6 It can be noted that in 1990, Ontario accounted for 34.8% of overall Canadian chicken production.
4Figure 2.1 Location of Chicken Production and Chicken Processing Plants
Lake
Sudbury Nipissing
District
Nipissing
District
Manitoulin
District Parry Sound
District
Renfrew County Ottawa
Georgian Bay Nepean Gloucester
Muskoka
District Stormont
Municipality
Haliburton Lanark County
County
Frontenac
Hastings County
Lake Huron County
Peterborough
Simcoe Victoria County
County County
Grey County
Bruce
County
Dufferin
County
Richmond Hill
Wellington Oshawa
Huron County County Brampton
Toronto Lake Ontario
Chicken Production
Perth Share by County
County Kitchener Oakville
Hamilton 15%
Oxford St. Catharines
County
Brant County
Middlesex
County
London
Lambton 8%
County Elgin County
Kent County Chicken Primary
Lake Erie Processing Plants 0%
Essex County
Table 2.1 Value of Ontario Chicken Production, by County, 2012
2012 Market County Share of 2012 Market County Share
County County
Value ($million) Ontario Value (%) Value ($million) of Ontario Value
Wellington $108.9 14.3% Gengarry & Stormont $8.0 1.1%
Huron $93.6 12.3% Prince Edward $7.9 1.0%
Niagara $88.7 11.7% Grey $6.9 0.9%
Oxford $64.7 8.5% Northumberland $5.9 0.8%
Perth $64.7 8.5% Dufferin $5.2 0.7%
Haldimand-Norfolk $59.4 7.8% Peel $5.0 0.7%
Waterloo $34.9 4.6% York $4.9 0.6%
Middlesex $33.3 4.4% Ottawa-Carleton $3.7 0.5%
Bruce $29.6 3.9% Halton $3.6 0.5%
Hamilton-Wentworth $21.3 2.8% Victoria (Kawartha Lakes) $3.0 0.4%
Kent $2.8 0.4%
Durham $19.0 2.5%
Lennox & Addington $1.2 0.2%
Lambton $16.2 2.1%
Essex $1.1 0.1%
Elgin $15.0 2.0%
Renfrew $0.9 0.1%
Prescott & Russell $14.9 2.0%
Sudbury $0.1 0.0%
Simcoe $14.8 2.0%
All Ontario $759.60 100%
Brant $11.7 1.5%
Source: Calculations based on distribution of quota units in late 2012
Peterborough $8.7 1.1%
5The table on the previous page highlights Ontario’s top Table 2.2
counties and regions in terms of overall chicken production. Counties Ranked by Share of Chicken Value to Overall
The importance of chicken production to the overall farm Farm Cash Receipts
economy within a county is illustrated in Figure 2.2, which
Chicken
shows the importance of chicken production within a county 2012 County
Share of
Market Share of
based on the chicken contribution to farm cash receipts in County
Value Ontario
County
Cash
a county7. Again Wellington County is the top county, with ($million) Value (%)
Receipts
13.3% of county farm output being chicken production; this Wellington $108.9 14.3% 13.3%
is followed by Niagara at 10.3% and then Peterborough at Niagara $88.7 11.7% 10.3%
9.6% of its output (See Table 2.2). Peterborough $8.7 1.1% 9.6%
Huron $93.6 12.3% 8.9%
Hamilton-Wentworth $21.3 2.8% 8.2%
The data indicates that the chicken industry is an important Oxford $64.7 8.5% 7.9%
part of the local agricultural economies in the counties Haldimand-Norfolk $59.4 7.8% 7.4%
that are in the southeast to northwest band on the west Perth $64.7 8.5% 6.9%
Prince Edward $7.9 1.0% 6.3%
side of the GTA. Counties where the farm value of chicken
Durham $19.0 2.5% 6.2%
production in a county exceeds the provincial average of Waterloo $34.9 4.6% 5.9%
6.6% of all farm production (based on cash receipts) are Bruce $29.6 3.9% 5.8%
highlighted in grey in Table 2.2. Brant $11.7 1.5% 5.4%
Peel $5.0 0.7% 4.7%
Middlesex $33.3 4.4% 4.3%
There is a high correlation between the counties where Prescott & Russell $14.9 2.0% 4.1%
chicken has the highest share of farm cash receipts and the Elgin $15.0 2.0% 3.4%
largest chicken producing counties8, as indicated by the last Northumberland $5.9 0.8% 3.1%
Simcoe $14.8 2.0% 3.1%
two columns in Table 2.2. In counties with chicken production
Dufferin $5.2 0.7% 3.1%
above the provincial average, we can expect that the amount Lambton $16.2 2.1% 2.9%
of valued added (or GDP) in the region due to chicken will be Grey $6.9 0.9% 2.7%
meaningful. GDP captures all of the value added by chicken Halton $3.6 0.5% 2.3%
Victoria (Kawartha Lakes) $3.0 0.4% 2.2%
producers as well as the value added by all of their suppliers
Gengarry & Stormont $8.0 1.1% 1.7%
(feed mills, hatcheries, labour, etc.). York $4.9 0.6% 1.6%
Lennox & Addington $1.2 0.2% 1.5%
Ottawa-Carleton $3.7 0.5% 1.1%
Renfrew $0.9 0.1% 0.8%
Sudbury $0.1 0.0% 0.7%
Kent $2.8 0.4% 0.5%
Essex $1.1 0.1% 0.2%
All Ontario $759.60 100% 6.6%
Source: Calculations based on distribution of quota units in late 2012 for first two columns and 2011
Census of Agriculture data and 2010 chicken production for the third column.
7 This calculation used 2011 Census data, which reports on 2010 cash receipts for a county, and compared that overall county value to the 2010 value of chicken production in that county (which is based on internal CFO data).
8 It can be noted that Middlesex is the 8th largest chicken producing County; however, its share of farm cash receipts is below the provincial average, given the importance of other agricultural production in the county.
6Figure 2.2 Importance of Chicken Production to Farm Cash Receipts Within a County
Parry Sound
District
Renfrew Ottawa
County
Stormont
Lanark
Haliburton County
County
Georgian Bay
Frontenac
Hastings
County
County
Lake Huron Peterborough
County
Victoria
Grey County
Bruce County Simcoe
County County
Huron
County Lake Ontario
Mississauga Toronto
Perth
County
Hamilton
St. Catharines Share By County
Middlesex
County London 15%
Lambton
County
8%
Kent
County
0%
The data indicates that the chicken industry is an important part
of the local agricultural economies in the counties that are in the
southeast to northwest band on the west side of the GTA.
73.0 C
hicken – An Integral Part
of the Farm Economy
While the production of chicken is a key economic driver – (valued at the farm gate of corn farmers) and $112 million
especially in parts of rural Ontario west of the GTA – the of soymeal from Ontario’s soybean crushers.
economic impact of the industry goes well beyond what
is produced on the chicken farm. This volume of soybean meal accounted for 19% of all
soybeans crushed in the province, and the purchase of
The economic importance of the Ontario chicken industry $141 million of Ontario soybeans to manufacture the
must also be considered from the perspective of its major soybean meal. The value of purchases by soybean crushers
linkages in the Ontario farm economy. Through the purchases is higher than the meal value since the value of the soy oil
of various goods and services, chicken production generates is not shown in Figure 3.1.
a positive economic impact throughout its supply chain.
Viewed another way, chicken production is adding value to The Ontario chicken industry also used an estimated 549,000
the corn and soybeans grown in the province of Ontario, as tonnes of corn in 2012, which required 14,000 truckloads
these grain and oilseed products are converted into meat of corn delivered to feed manufacturers – the equivalent of
protein on the chicken farm. 54 loads every day of the workweek in 2012. This annual
volume of corn is more than the amount of corn used by a
Figure 3.1 (on the next page) provides an illustration of typical 200-million-litre ethanol plant9 located in Ontario.
the product and financial flows associated with chicken
production. The 2012 chicken volume of production of 447 In total, chicken feed manufacturers purchased 10% of the
million kilograms by Ontario chicken farmers through its 2011/12 soybean crop and 8% of the 2011/12 corn crop10. The
forward linkage to primary processing enabled the $1.16 production of chicken in 2012 generated $282 million in farm
billion in output of primary processed chicken products. gate sales of corn and soybeans11, which accounts for 9.5%
of Ontario corn and soybean cash receipts for 2012. These
This volume of chicken production required $342 million of grain and oilseed farmers in turn purchased an estimated
prepared feed from Ontario feed manufacturers and $140 $66 million in seed, fertilizer and crop protection materials.
million of chicks from Ontario’s hatcheries. These two inputs
account for 63% of the value of the chicken supplied by These economic linkages from chicken production back
chicken farmers in 2012. through to input suppliers illustrate the interdependencies
between chicken production, the grain production sector and
The 2012 volume of chicken production required an processing (of feed and soymeal). These backward linkages
estimated 813,000 tonnes of prepared feed, with the feed for all purchases made by Ontario chicken farmers are
destined for Ontario chicken production accounting for 23% used to calculate the economic activity generated in rural
of the value of shipments from all Ontario feed mills (based Ontario by the chicken production sector. If Ontario chicken
on value of sales as measured by Statistics Canada). These production did not exist, a good portion of the level of
feed mills in turn required approximately $141 million of corn economic activity occurring in the Ontario economy linked
to chicken production would also not exist.
9 A 200 million litre ethanol plant will use between 480,000 to 500,000 tonnes of corn in a year.
10 The 2011/12 crop is used for comparison since corn and soybeans are harvested in the fall and are the major feedstock for the feed manufacturing sector in 2012.
8Figure 3.1 Overview of Financial and Product Flows in the Chicken Industry, 2012
Primary Processing
of Ontario Chicken
$1,160 M. (output)
($150 M. to labour)
3,750 jobs
Ontario Chicken Farmers
$760 M. (output)
447 M. kgs
Feed Manufacturing Chick Hatcheries
$342 M. in sales 538 jobs Required
(23% of all sales) ($25 M. to labour) $140 M. in sales
813,000 tonnes 201 M. chicks
Soymeal
$112 M. in sales
(19% of all shipments)
224,000 tonnes
Ontario Soybeans Ontario Corn
$141 M. in sales $141 M. in sales
283,000 tonnes 549,000 tonnes
233,000 acres 143,000 acres
(10% of 2011 crop) (8% of 2011 crop)
Ontario Corn and Soybeans
$282 M. in sales $35 M. in seed
376,000 acres $24 M. in fertilizer
(9% of acres) $6 M. in crop protection
550 farms with 500 acres
11 This volume also represents ~ 7% of all corn, wheat and soybean production in the province, and represents the output of 1,155 average grain and oilseed farmers.
94.0 Economic Contribution of
Chicken Farming in Ontario
As noted above, Ontario chicken production generated $760 economy, multiplying the effects of the original expenditures
million in farm gate value in 2012. Chicken production, just like on overall economic activity.
the provincial economy, is a complex of interacting sectors.
Focusing only on the direct contributions of chicken farming The following is a measurement of the direct, indirect and
results in a truncated and limited view of its entire and full induced impacts of chicken farming to the economy of
Ontario. The most recent year for which data is available
(2012) is used to give a recent estimate of these contributions.
4.1 Impact of Chicken Farmer Expenditures
on Overall Economic Activity
The economic driver of the Ontario chicken industry is the
expenditures made on inputs and household consumption
by the chicken production sector, made possible by the
$760 million total value of chicken production in 2012.
These expenditures include the purchasing of key inputs
to produce the chicken and consumption items by chicken
contributions to the provincial economy. Producing $760 million farming households and others impacted directly or indirectly
of chicken output requires inputs from several sectors, including by chicken farming. In an input/output analysis total
feed manufacturers, chick hatcheries, energy suppliers and expenditures equate to the total value of production, since
labour. These input suppliers to chicken production also require all income is expended in some manner. These expenditure
supplies purchased in the economy, such as trucks to deliver levels and the resulting linkages13 drive the economic impact
feed and chicks and energy to operate plants and equipment, and the measurement of economic contribution.
etc. The economic contribution of a sector is driven by its
purchases from other sectors in the economy and resulting Initial expenditures – This figure indicates the
economic activity throughout the economy. amount of expenditure directly made by Ontario
chicken farmers. It is these expenditures that
Through this economic activity, the overall economic typically drive the results.
contribution of Ontario chicken production can be assessed.
Such assessment is based on using a regional impact model Initial expenditures in the Ontario chicken production sector
(an input-output model) developed by Econometric Research drive associated economic activity through the indirect
Limited that estimates the economic impact of economic effects (suppliers purchasing their required supplies) and
activities12. This approach shows how expenditures by chicken the induced effect (the impact of expenditures by labour on
farmers to produce a dollar’s worth of chicken purchased by a goods and services).
processor, for example, circulates and re-circulates within the
12 An overview of the model used and the general approach are provided in Annex I.
13 There are two resulting types of linkages – upstream (backward) and downstream (forward) based on the expenditures of the farm sector. Downstream linkages of farm production are the impacts on users of farm
products such as processors. Impacts on suppliers of fertilizer, machinery, and energy, are examples of upstream linkages. Our analysis only accounts for these upstream linkages.
10A dollar spent on producing these primary agricultural Table 4.1
products – such as chicken – circulates and re-circulates I mpact of Ontario Chicken Farming on Ontario
within the economy, multiplying the effect of the original Economic Activity, 2012
expenditures on overall economic activity. This process is
referred to as the economic multiplier effect and it Initial Expenditure $760 Million
operates at several levels:
• The initial expenditures on equipment, materials and
labour, which are generally referred to as the direct
costs of operation – the initial (direct) effects;
• Subsequent purchases by suppliers of materials Gross Output
and services to sustain the original and derivative
$1,740 Million
expenditures – the indirect effects; and
• The induced effects that emerge when farm operators
and workers in the sectors stimulated by initial and indirect
expenditures spend their additional incomes on consumer
goods and services.
Direct $760 Million
The impact of these initial expenditures14 on output of the
economy is shown in Table 4.1. The $760 million of direct Indirect & Induced $980 Million
Multiplier 2.29
A dollar spent on producing these The output multiplier is 2.29, which means that for each
primary agricultural products – such as million dollars in chicken output (sales) by the farm sector,
chicken – circulates and re-circulates there are total sales (or transactions) of $2.29 million
throughout the Ontario economy.
within the economy, multiplying the
effect of the original expenditures on Source: JRG Consulting Group and Econometric Research Limited calculations
overall economic activity.
Multipliers – These are summary measures that
represent the division of the total impacts (direct,
economic output of chicken farmers generates $980 million indirect and induced) by the initial expenditures. For
in indirect and induced expenditures, resulting in total example, the gross output multiplier associated with
economic activity of $1.7 billion in transactions throughout the Ontario chicken farming business is calculated by
the economy. This figure is solely the result of chicken dividing the total gross impact by initial expenditures.
production, and accounts for the supply chain linkages for The only exception is that of the employment
chicken farmers (e.g., feed companies, professional services, multiplier where total employment is divided by direct
energy, labour, etc.). employment in order to preserve the common units.
14 The distribution of these initial expenditures across inputs and household income made by Ontario chicken farmers are calculations made which include a variety of sources, such as expenditure data supplied by
Statistics Canada, proprietary engineering costing data associated with chicken production, and other confidential sources.
114.2 V
alue Added Due to Ontario Chicken Table 4.2
Farming Production Activities Value Added by Ontario Chicken Farming, 2012
The total impact of chicken farming on economic activity Initial Expenditure $760 Million
in Ontario is distinct from the value added due to Ontario
chicken production. Value added15, which is the same as Gross
Domestic Product (GDP), is a preferred indicator of impact
and is defined to include the sum of wages, rent, interest,
Value Added
Based on Input/Output analysis, an
$839 Million
estimated $430 million in value added was
generated by the non-farm sector due to the
economic activity created within the chicken
production sector.
Direct $389 Million
depreciation on capital items and profits and is a measure of Indirect & Induced $430 Million
the net contribution of an industry or sector to the economy.
Multiplier 1.08
Table 4.2 shows that the direct value added economic impact Source: JRG Consulting Group and Econometric Research Limited calculations
of Ontario chicken production in 2012 was $389 million, with a
total direct and indirect impact of $839 million throughout the
Ontario economy after considering the indirect and induced Value Added – This figure represents net output
effects. The direct GDP includes the economic impact of generated by the initial expenditures of Ontario
chicken farmers and production and captures the value added chicken farmers in the province. It is typically the sum
by the input suppliers to the chicken production sector, which of wages, rent, interest, depreciation, and profits.
sustains the direct expenditures. Based on input–output
analysis, an estimated $430 million in value added was When all of the indirect and induced economic activity
generated by the non-farm sector due to the economic activity is considered, the value added (or GDP) due to chicken
created within the chicken production sector. production is $839 million. The multiplier is 1.08 implying that
for each $10 million in farm level sales, another $10.8 million
in GDP is created throughout the Ontario economy.
15 This is different from gross output, which represents the sales of the sector and includes the value of the output of its suppliers.
12The national average for this income multiplier is just over
1.0 across all industries.
This value added (GDP) measure captures the net
contributions added to the economy due to an activity.
The gross economic impact explained in Section 4.1 reflects
the value of transactions in the economy and not the retained
value added. As with all of these measures of economic
impact, the economic contribution reported only measures
economic impact (e.g., value added due to farm production)
based on upstream purchases (purchase from input suppliers).
The economic contribution of further downstream economic
activity, such as chicken processing, is not captured in the
above analysis, but is examined in Section 5.0 – including
the GDP associated with primary processing of Ontario-raised
chicken, including the economic impacts associated with
chicken production (as chicken production is a supplier to
chicken processors).
134.3 E mployment and Labour Income Impact of Employment – This refers to the total person years
Ontario Chicken Farming (full-time equivalent jobs) generated by farm output.
The chicken farming industry creates and sustains jobs Ontario chicken farmers directly support 5,834 FTE jobs, which
across the province – and especially in rural areas – with includes employment in direct input suppliers such as in feed
the economic activity associated with chicken production companies associated with supplying feed to chicken farmers
supporting 11,409 full-time equivalent (FTE) jobs across Ontario. (refer back to Figure 3.1), hatcheries, energy suppliers,
suppliers of other services, etc.
As seen in Table 4.3, chicken production resulted in $451
million paid in wages and salaries throughout Ontario in Another 5,575 FTE jobs are supported through the indirect
2012, with $193 million associated with direct employment and induced impacts. This impact results in an employment
and $258 million based on the indirect and induced economic multiplier of 1.96, which means that for every direct job
activity associated with chicken farming. Wages and salaries created by chicken production, another 0.96 jobs are created
are a part of value added, with this $451 million equal to through the induced and indirect activities, resulting in a total
55% of the total $819 million in value added due to chicken of 1.96 FTE jobs16.
farming and the upstream economic activity associated
with chicken production. Total employment because of Ontario’s chicken farms is
11,409 FTE jobs. By way of comparison, a large Canadian
The direct wages and salaries of $193 million are more food manufacturing company such as Saputo had a reported
than those paid by chicken farmers to employees and family 10,200 employees in 201217.
members. This labour income includes the wages and salaries
These measures indicate that for every million dollars in farm
level chicken output, this output generates 7.7 direct FTE jobs
Chicken production resulted in $451 million and a total of 15.0 FTE jobs (after considering indirect and
paid in wages and salaries throughout induced effects)18. It should also be noted that there are more
jobs generated off the chicken farm than on the chicken farm.
Ontario in 2012.
For example, a chicken farm with $1 million in output could
employ two to three individuals.
paid to workers that supply inputs to chicken producers, The distribution of employment resulting from the output
such as feed suppliers, hatcheries, suppliers of contract of Ontario chicken farmers is shown in Table 4.4 (p.16),
services, suppliers of energy, providers of professional with these employment estimates based on the input-output
services (e.g., lawyers, bankers, and accountants), etc. impact model.
16 The Canada wide average employment multiplier is somewhat higher, at 2.5 across all industries.
17 Source: Globe and Mail, Report on Business, “Ranking Canada’s Top 1,000 Public Companies by Profit”, June 28, 2012.
14The agriculture sector has an associated 5,939 FTE jobs The food and beverage manufacturing sector jobs reported
due to chicken production, which is 52% of the overall in Table 4.4 are primarily in the feed manufacturing sector,
employment impact. These agricultural jobs include those with the input model suggesting 174 FTE jobs due to chicken
on chicken farms, as well as those on corn and soybean farming. Prior estimates based on principal statistics as
farm operations, hatching egg producers, as well as others reported by Statistics Canada suggest potentially 538 FTE
that support chicken production. The second largest sector jobs in feed manufacturing19.
that benefits via employment from chicken production is
the retail trade sector, which supports 985 FTE jobs. This is
followed by services, such as business services, education
and health services, and finance, insurance & real estate. The
transportation sector accounts for 258 FTE jobs, and travel
and marketing employment is just under 200 FTE jobs.
Table 4.3
Employment Impact due to Ontario Chicken Production, 2012
Initial Expenditure $760 Million
Employment Wages & Salaries
11,409 $451 Million
Direct 5,834 Direct $193 Million
Indirect & Induced 5,575 Indirect & Induced $258 Million
Multiplier 1.96
Source: JRG Consulting Group and Econometric Research Limited calculations
18 The Canadian average (all industries) is 6.7 direct jobs and 18.0 total jobs per million dollars of output.
19 Some of these jobs can be categorized as transportation and marketing jobs within the input-output model.
15Table 4.4 4.4 Tax Revenues Resulting from Ontario
Employment Generated by Ontario Chicken Chicken Farming
Production, 2012
Besides its direct and indirect impacts on the Ontario
economy, Ontario chicken production also generates tax
FTE
Employment
revenues for governments. Table 4.5 shows the total
Industry Distribution
Due to Chicken contribution to tax revenues generated by the economic
Production
activity (direct, indirect, and induced) generated due to
Agriculture 5,939 52.1% Ontario farmers supplying $760 million in chicken to primary
Retail Trade 985 8.6% processors. The federal government receives $122 million in
Business and Computer Services 800 7.0% tax revenues, the Ontario government $77 million and local
Education and Health Services 716 6.3%
governments $23 million, mostly through property taxes.
Finance, Insurance, & Real Estate 511 4.5%
Accomodation Services 395 3.5%
Other Services 305 2.7% Taxes – The impact model generates a large number
Transportation & Storage 258 2.3% of taxes (income taxes, HST, property taxes, etc.)
Construction 224 2.0%
each of which is linked with the level of government
Travel & Marketing 194 1.7%
Food, Feed & Beverage Manufacturing 174 1.5% receiving it.
Administration & General Office 156 1.4%
Communiaction and Utilities 148 1.3% Total taxes collected by government as a result of the
Machinery and Equipment 95 0.8%
Chemicals and Chemical Products 85 0.7%
economic activity due to chicken production are 29% of the
Petroleum Products 68 0.6% value of chicken shipped by Ontario chicken famers to primary
Transportation Margins 62 0.5% chicken processors.
Transportation Equipment 50 0.4%
Primary Metals 44 0.4%
Electrical Products 40 0.4%
As reported in Table 4.6, personal income tax accounts for
Metal Fabricating 38 0.3% 56% of the taxes generated [$125/$222] based on all of the
Mining 25 0.2% direct, indirect and induced impacts of chicken production.
Paper and Allied Products 19 0.2%
Rubber and Plastics 17 0.1%
Printing and Publishing 14 0.1%
Total taxes of $222 million were generated due to
Non-Metal, Minerals 11 0.1% Ontario chicken production in 2012.
Wood Industries 8 0.1%
Other Manufacturing 8 0.1%
A summary of the overall impact of chicken farming in the
Logging 7 0.1%
Furniture 6 0.1%
province of Ontario is shown in Figure 4.1, where the initial
Clothing Industries 3 0.0% expenditures by Ontario chicken farmers of $760 million
Primary Textiles 3 0.0% generate $1.74 billion in mostly upstream transactions
Total 11,409 100%
throughout the province, which results in economy wide
16GDP of $819 million, of which $451 million are payments to Table 4.5
labour. All levels of government receive $222 million in tax Government Revenues Generated by Ontario
revenue due to this economic activity. Chicken Production, 2012
At the county level, with Wellington County accounting for
14.3% of Ontario’s chicken output, the associated $108.9
million of output has the following contributions to the overall
Ontario economy:
Government
• Provides for 1,631 jobs throughout Ontario, with associated
labour income of $64.5 million;
Revenue
$222 Million
• Adds another $249 million in overall economic activity
throughout the province;
• Increases provincial GDP by $120 million; and
• Generates $31.5 million in tax revenues to all levels Federal Taxes
of government.
Provincial Taxes
Figure 4.1 Local Taxes
Economic Impact of Ontario Chicken Farming Source: JRG Consulting Group and Econometric Research Limited calculations
$ Million
2,000
Table 4.6
1,800
1,600 Taxes by Level of Government and Type of Tax, 2012
1,400
1,200
Federal Provincial Local Total
1,000
800 Personal Income Tax $80 $45 $125
600 Corporate Profit Taxes $34 $19 $53
400 Property & Bus. Tax $23 $23
Harmonized Sales Tax $8 $13 $21
200
Total $122 $77 $23 $222
0
Initial Gross Value Wages and Taxes
Expenditure Output Added Salaries
175.0 Contribution of Primary
Processing of Ontario Chicken
The prior section highlighted the economic contribution of Table 5.1
Ontario chicken farming; with the result of this farm level Impact of Primary Processing of Ontario
output, the economy-wide GDP increases by $819 million Chicken on Economic Activity, 2012
of GDP (value added), 11,409 FTE jobs are generated, and
$222 billion in tax revenues is contributed to all levels Initial Expenditure $1,161 Million
of government.
But chicken production is only one pillar of the industry.
In this section, the economic contribution of the major
downstream partner of chicken farming – primary processing
of chicken – is highlighted using the same economic
contribution model as used for chicken farming20. Gross Output
$2,722 Million
5.1 I mpact of Expenditures by Primary
Processors on Overall Economic Activity
Overall expenditures in the chicken supply chain (which
ends with primary processed chicken products) are more
than $1.1 billion, which is also the estimated output of
primary chicken processing in Ontario for 2012. This level of Direct $1,161 Million
output is approximately 3% of the $40 billion in shipments
of Ontario’s food and beverage manufacturers for 2012. The Indirect & Induced $1,561 Million
top expenditure areas in the supply chain are feed at 30%
of this expenditure profile, labour and management at 19% Multiplier 2.34
of overall expenditures, hatchery supplied chicks at 12% The output multiplier is 2.34, which means that for each
of expenditures, which is followed by freight (both inbound million dollars in the output by primary processors of chicken,
to processors with live chicken and outbound with primary there are total sales (or transactions) of $2.34 million
processed products) accounting for 7% of overall expenditures. throughout the Ontario economy 21.
Overall economic activity due to this level of output is $2.7
billion in expenditures, or transactions in the economy, with
$1.6 billion of this associated with indirect and induced
expenditures throughout the economy.
Source: JRG Consulting Group and Econometric Research Limited calculations
20 The expenditure profile used for this analysis assumes an integrated supply chain, where input expenditures by primary processors and chicken farmers are combined. Double counting is avoided by replacing
processor expenditures on Ontario chicken by the actual expenditure profile attributed to Ontario chicken farming.
18Multipliers – These are summary measures that $10 million in output of primary processors, another $11.9
represent the division of the total impacts (direct, million in GDP is created throughout the Ontario economy.
indirect and induced) by the initial expenditures.
For example, the gross output multiplier associated This measure captures the net contributions added due to
with the Ontario chicken farming business is an activity. Gross output, while larger, reflects the value
calculated by dividing the total gross impact by of transactions in the economy and not the retained value
initial expenditures. The only exception is that of the added. As with all of these measures of economic impact,
employment multiplier, where total employment is the economic contribution reported only measures economic
divided by direct employment in order to preserve the impact of upstream activity (e.g., value added due to
common units. purchases from input suppliers). The economic contribution
of further downstream economic activity (further processed
5.2 V
alue Added Due to Primary Processing chicken, such as breaded and stuffed chicken products), or
of Ontario Chicken retail sales of chicken is not captured in the above analysis.
Only the economic activity associated with upstream activities
As noted above, the total output contribution of Ontario (suppliers to the supply chain) is accounted for.
chicken production is distinct from the value added due to
Ontario chicken production. Value added (or GDP) includes Table 5.2
the sum of wages, rent, interest, depreciation on capital items
Value Added by Primary Processing of Ontario
and profits and is a measure of the net contribution of an
Chicken, 2012
industry or sector to the economy.
Initial Expenditure $1,161 Million
Table 5.2 shows that the direct value added associated with
primary processing of Ontario-grown chicken was $677 million
in 2012, including the economic impact of chicken production
outlined in Section 4.2. Direct GDP includes the value
added of primary processing, chicken farming, and the direct
suppliers to primary chicken processing and chicken farming.
Overall GDP associated with this economic activity was Value Added
$706 million greater throughout the Ontario economy after $1,383 Million
considering the indirect and induced effects.
Value Added – This figure represents net output
generated by the initial expenditures of Ontario
chicken farmers and primary processors of chicken
in the province. It is typically the sum of wages, rent,
Direct $677 Million
interest, depreciation, and profits.
Indirect & Induced $706 Million
When all of the indirect and induced economic activity is
considered, the value added (or GDP) due to the output of Multiplier 1.19
$1.16 billion in primary processed chicken is $1.38 billion in Source: JRG Consulting Group and Econometric Research Limited calculations
value added. The multiplier is 1.19 implying that for each
21 The Canadian average sales multiplier is 2.57 across all industries.
195.3 E mployment and Labour Income Impact of salaries was paid to workers throughout the province,
Primary Processing of Chicken (after accounting for the indirect and induced effects).
These wages and salaries are 61% of total value added
Chicken farming generated an estimated employment of of nearly $1.4 billion.
11,400 FTE positions across the province. When primary
processing of chicken is included, the overall employment Employment – This refers to the total person years
level associated with chicken industry economic activity (full-time equivalent jobs) generated by the value
increases to 19,183 FTEs (see Table 5.3). By way of of primary processed chicken output.
comparison, Canada’s largest food manufacturing company
in 2011, Maple Leaf Foods, employed 19,800 employees22. The direct employment impact of this economic activity is
10,269 FTE jobs, and another 8,914 FTE jobs are created
Based on expenditures associated with businesses in the through the indirect and induced impacts. This impact results
chicken supply chain, a total of $843 million in wages and in an employment multiplier of 1.87, which means that for
Table 5.3
Employment and Labour Income Impact of Primary Processing of Chicken
Initial Expenditure $1,161 Million
Employment Wages & Salaries
19,183 $843 Million
Direct 10,269 Direct $416 Million
Indirect & Induced 8,914 Indirect & Induced $427 Million
Multiplier 1.87
Source: JRG Consulting Group and Econometric Research Limited calculations
22 Source: Globe and Mail, Report on Business, “Ranking Canada’s Top 1,000 Public Companies by Profit”, June 28, 2012,
20every direct job created by chicken production and processing, Table 5.4
another 0.87 jobs are created through the induced and Employment Generated by Primary Processing
indirect activities, resulting in a total of 1.87 FTE jobs23. of Ontario Chicken, 2012
These measures indicate that for every million dollars in FTE
processed chicken output, this output supports a total of Employment Additional
Industry Due to Distribution Jobs Due to
16.5 FTE jobs (after considering indirect and induced Chicken Processing
effects)24. Slightly more than 50% of the jobs generated Production
are outside of the agriculture and the primary processing Agriculture and Primary Processing 9,278 48.4% 3,339
of chicken sectors (See Table 5.4). Retail Trade 1,810 9.4% 825
Business and Computer Services 1,241 6.5% 441
Education and Health Services 1,324 6.9% 608
The distribution of employment resulting from the output Finance, Insurance, & Real Estate 891 4.6% 380
of Ontario chicken farmers is provided in Table 5.4, with Accomodation Services 709 3.7% 314
these employment estimates based on the input-output Other Services 523 2.7% 218
Transportation & Storage 892 4.6% 634
impact model. The agriculture sector and primary processing
Construction 331 1.7% 107
of chicken sector has an associated 9,278 FTE jobs due to Travel & Marketing 334 1.7% 140
chicken, which is 48% of the overall employment impact. Food, Feed & Beverage Manufacturing 244 1.3% 70
The last column in Table 5.4 shows the incremental Administration & General Office 433 2.3% 277
Communiaction and Utilities 217 1.1% 69
employment impact by including the primary processing of
Machinery and Equipment 134 0.7% 39
Ontario grown chicken. An additional 3,339 FTE jobs are Chemicals and Chemical Products 115 0.6% 30
generated in the agriculture and primary processing sector Petroleum Products 110 0.6% 42
due to inclusion of processing, with the vast majority of these Transportation Margins 92 0.5% 30
Transportation Equipment 98 0.5% 48
jobs occurring at the primary processing plant. In Figure 3.1,
Primary Metals 71 0.4% 27
we estimated that employment at primary chicken processing Electrical Products 66 0.3% 26
operations was 3,750 jobs. Metal Fabricating 63 0.3% 25
Mining 39 0.2% 14
Paper and Allied Products 32 0.2% 13
Areas where the addition of primary processing to the
Rubber and Plastics 34 0.2% 17
analysis created considerably more employment include: Printing and Publishing 29 0.2% 15
retail trade with an incremental 825 FTE jobs, which is Non-Metal, Minerals 17 0.1% 6
a result of consumption expenditures on consumer goods Wood Industries 11 0.1% 3
Other Manufacturing 15 0.1% 7
(based on direct, indirect, and induced expenditures), and
Logging 9 0.0% 2
transportation and storage by another 634 FTEs, which Furniture 11 0.1% 5
is expected based on the inbound live chicken deliveries Clothing Industries 6 0.0% 3
and outbound shipments of chicken parts associated Primary Textiles 4 0.0% 1
Total 19,183 100% 7,774
with primary processing.
23 The Canada wide average employment multiplier is somewhat higher, at 2.5 across all industries.
24 The Canadian average (all industries) is 6.7 direct jobs and 18.0 total jobs per million dollars of output.
215.4 T ax Revenues Resulting from Primary
Processing of Ontario Chicken
Inclusion of primary processing in the chicken supply chain
increases overall government revenues from $222 million
(See Table 4.5, p.17) to $391 million, as reported in Table 5.5.
The federal government receives $214 million, with the
majority through personal income taxes (See Table 5.6).
The provincial government receives $136 million, and the
local governments obtain $41 million through property taxes.
Taxes – The impact model generates a large number
of taxes (income taxes, HST, property taxes, etc.)
each of which is linked with the level of government
receiving it.
Total taxes collected by government as a result of the
economic activity due to chicken production and primary
processing are 34% of the value of processed chicken output. As an example, if chicken output were to decrease by 10%
in Ontario, or if policies prohibited Ontario chicken production
Total taxes of $391 million were generated due to to expand by 10% or by 45 million kilograms, and have
Ontario chicken production in 2012. production move closer to its share of the Canadian
population25, then the economic impact can be measured
Accounting for the $1.16 billion of purchases by primary as follows:
processors of Ontario chicken and Ontario chicken farmers
generates $2.7 billion of economic activity throughout the • Foregone employment in the Ontario economy of
province. This level of economic activity generates $1.4 billion 1,918 full time jobs;
of GDP across Ontario, of which $843 million is paid as wages
and salaries. Total tax revenues received by all levels of • Foregone payments to labour of $84 million;
government due to this economic activity are $391 million.
• Foregone provincial GDP of $138 million;
One can postulate that if chicken farming did not continue in
its present form, then a portion of the economic contribution • Foregone tax revenues to provincial and local
generated by chicken farmers and primary processors would governments of $18 million.
no longer be relevant.
25 Production would need to increase by 20% to have production comparable to Ontario’s share of national population.
22At the local level, Niagara accounts for 11.7% of Ontario’s Table 5.5
chicken output, which results in $135.5 million of primary Government Revenues due to Primary
processed chicken products and has the following Processing of Ontario Chicken, 2012
contributions to the overall Ontario economy:
• Provides for 2,240 jobs throughout Ontario, with associated
labour income of $99 million;
• Adds another $318 million in overall economic activity
Government
throughout the province;
Revenue
• Increases provincial GDP by $162 million; and $391 Million
• Generates $46 million in tax revenues to all levels
of government
Federal Taxes $214 Million
Figure 5.1
Provincial Taxes $136 Million
Economic Impact of Primary Processing
of Ontario Grown Chicken Local Taxes $41 Million
$ Million Source: JRG Consulting Group and Econometric Research Limited calculations
2,500
Table 5.6
2,000
Taxes by Level of Government and Type of Tax, 2012
1,500
Federal Provincial Local Total
1000
Personal Income Tax $147 $83 $230
500 Corporate Profit Taxes $50 $28 $71
Property & Bus. Tax $41 $41
Harmonized Sales Tax $16 $125 $141
0
Initial Gross Value Wages and Taxes Total $214 $136 $41 $391
Expenditure Output Added Salaries Source: JRG Consulting Group and Econometric Research Limited calculations
236.0 Summary of Findings
Chicken farming is important within the Ontario farm sector and also an important contributor to the overall economic
well-being of the Ontario economy. A few high-level noteworthy statistics (for 2012) for Ontario chicken production include:
• A marketplace value of $760 million; • Through feed purchases of $342 million, accounts for
• Accounts for 6.6% of Ontario’s farm cash receipts; 23% of the sales value of Ontario’s feed manufacturers
• Accounts for 14.4% of Ontario’s farm cash receipts for • Through the use of corn and soymeal in manufacturing
livestock and poultry; prepared feed, accounts for 9.5% of the market cash
receipts obtained by Ontario corn and soybean farmers;
• Five counties of Wellington, Huron, Niagara, Oxford, and
Perth account for 55% of output; • Accounts for $140 million of purchases in day-old chicks
from hatcheries;
The resulting economic activity of $1.74 million across Ontario due to overall farm level expenditures associated with chicken
production generates within Ontario:
• Employment of 11,409 full time jobs; • GDP of $819 million; and
• Wages and salaries of $451 million; • Tax revenues to all levels of government of $222 million.
Ontario’s chicken production is processed within the province at primary processing plants, where the chicken is supplied to users
as primary cuts, whether for retail use or for further processing into more value added chicken products. Valuing chicken at the
primary processing level results in $1.16 billion of output and produces the following economic contributions across Ontario:
• $2.72 billion in overall economic activity; • Provincial GPD of $1.38 billion; and
• Employment of 19,183 full-time equivalent jobs; •Taxes to all levels of government of $391 million.
• Payments of $843 million in wages and salaries;
Increases or decreases in chicken output have an impact on the result of the economy. For example, if Ontario can increase
chicken production by 10%, the following economic contributions can be noted:
• $272 million of additional economic activity; • Ontario’s GDP increases by $138 million;
• 1,913 jobs created; • Tax revenues collected by the provincial government and
• Payments to employees increase by $84 million; by local governments increase by $18 million.
As well, if past polices have prohibited growth of the Ontario chicken industry, these above impacts are indicative of the
foregone economic contribution of the Ontario chicken industry.
2425
Economic Contribution
of Ontario Chicken
at the level of chicken farming
Gross Output
$1,740 Million
Value Added
$839 Million
Wages &Salaries
$451 Million
Employment
11,409 Government
Revenue
$222 Million
26Economic Contribution
of Ontario Chicken
at the level of primary processing
Gross Output
$2,722 Million
Value Added
$1,383 Million
Wages & Salaries
$843 Million
Government Employment
Revenue 19,183
$391 Million
27Annex I
Background on the Study Authors
This report was prepared for Chicken Farmers of Ontario by the following authors
JRG Consulting Group provides management consulting Econometric Research Limited (ERL) is a leading consulting
services to the agri-food sector across Canada, to private firm in the area of economic impact analysis and in the design
sector companies, trade and industry associations, commodity of computer models for community economic development and
organizations, legal counsel, investors and government sectorial impact assessment. ERL is led by Dr. Atif Kubursi,
agencies. JRG Consulting Group has provided economic who is also a professor at McMaster University. ERL has carried
contribution studies in other sectors including the horticulture out a large number of studies in the area of economic impact
sector, the Canadian supply management sector, and Ontario of agriculture and various food industries that are located in
agriculture and food. JRG Consulting Group is led by Dr. John Ontario and across Canada. Some of these projects have been
Groenewegen, who has provided consulting services to the in association with other leading Canadian consulting firms.
agri-food sector in the areas of economic analysis, industry In collaboration with JRG Consulting Group, ERL has also
competitiveness, market feasibility, business strategy and completed some very specific studies of special relevance to
planning and policy analysis for 28 years. John has a Ph.D. agriculture and agri-food sector in Ontario in the area of the
in agricultural and applied economics from the University of impact of agriculture, food processing and the impact of the
Minnesota and is a Certified Management Consultant (CMC). Canadian horticulture sector on the Canadian economy.
Annex II
An Overview of the Model
Inter-industry tables (or process schedules) are widely used to other unrelated industries. As a result, this industry may have a
accounting frameworks for the analysis of sectorial linkages26. profound influence on the economy through its indirect relations
In this framework, sectorial relationships appear in a web of with other industries. Using live chicken as an example, this
interconnectedness since each sector is considered to buy its production requires replacement birds (chicks) that come
input requirements from many sectors and sell its outputs to from within agriculture, feed from the feed manufacturing
several other sectors and compete for some scarce factors sector, machinery from industry, energy from the mines and
with other sectors. refineries, and labour. These define the direct requirements
(or expenditures) to sustain the production of chicken.
Input-output analysis quantifies the linkages that an industry
has with other industries in the economy. Specifically, an The supply of feed requires grain from within agriculture,
industry may buy or sell directly from only a few industries, energy, labour, transportation equipment, and machinery; and
but its customers and suppliers may be intricately connected the production of machinery requires steel, plastics, energy
26 Wassily Leontief. 1966. Input-Output Economics. Oxford: Oxford University Press, A. Smyshlyaev (Ed.). 1985. Input-Output Modeling. New York. IIASA., William H. Miernyk. 1965. Input-Output Analysis, New York. Random House.
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