Market Value of Agricultural Products Sold Decline

After a consistent upward trend during the prior 3 decades, the value of agricultural products sold declined over the past 5 years. The period 1974 to 1997 saw a steady increase in the market value of agricultural products from $179.7 million in 1974 to $454.4 million in 1997. The most dramatic increase occurred between 1992 and 1997, when the market value of Massachusetts' agricultural products increased by nearly 30 percent.

The 1997 value was subsequently adjusted for coverage (What is a Coverage Adjustment?) upwards to $483.5 million. The adjusted figure is comparable to the 2002 Agricultural Census market value of $384.3 million. Thus, the market value of Massachusetts agricultural products is estimated to have fallen by nearly $100 million (about 20 percent) between 1997 and 2002. During this period, the cranberry industry suffered dramatic price decreases.

These values are not adjusted for inflation – they are what we call "nominal values." To control for pure inflation, the nominal market value was deflated using the producer's price index for agricultural products with a base year of 1982; real values are in terms of 1982 dollars indicating whether there have been real increases in agricultural products. (What is Real?) Figure 3.2 shows the trends for both the nominal and real market values for agricultural products sold for 1964 through 2002. In real terms, the value of agricultural products sold in the state declined from 1964 to 1974. There was then a general upward trend from 1974 to 1997. The real value of agricultural products sold surpassed the 1974 value in 1987. In real terms, the decline from 1997 to 2002 was about $40 million or 9.4 percent (1982 dollars) compared with the nominal decrease of nearly $100 million (about 20 percent).

The cranberry industry has had a strong effect on our view of Massachusetts agriculture over the past decade. Between 1992 and 1997, cranberry producers saw a boom in their industry as cranberry prices increased by 23.5 percent (Cranberry Prices) . This price increase, combined with an 11 percent increase in production, mostly due to more acreage, led to an increase in the value of production of over 37 percent. But in 1998, cranberry prices began a steep decline. By 1999, prices had fallen by more than 75 percent. While prices rebounded slightly, they were 53 percent lower in 2002. Production has fallen by nearly 31 percent leading to a decline in the value of production of nearly 68 percent, from about $139 million in 1997 to $45 million in 2002.