Employment Security Department

Labor Market & Economic Analysis Branch

Agricultural Services
Overview
The job recovery following the 1990-91 recession was fueled by growth in the service-producing
industries. Among these service-producing industries is agricultural services, one of the fastest growing
sectors in the United States. Between 1969 and 1997, agricultural services employment increased by
11.6 percent annually. Only the business services (average annual growth of 15.7 percent) and
museums, botanical and zoological gardens (average annual growth of 15.1 percent) industries grew at a
faster pace during this time period.
While employment in agricultural services has increased dramatically over the years, its growth has been
a mirror image of declining farm employment. Rate of production growth, however, has been robust in
both sectors.
Figure 1
U.S. Employment in Farms and Agricultural Services, 1969-1997
Source: U.S. Bureau of Economic Analysis
4,500
4,000

Thousands of workers

3,500
3,000
2,500
2,000
1,500
1,000
500
0
1969

1971

1973

1975

1977

1979

1981

1983

1985

Agricultural services

1987

1989

1991

1993

1995

1997

Farm

Agricultural services sector is comprised of a wide array of services sold to farm-oriented enterprises and
to non-farm final consumers. Those farm-oriented services are essentially intermediate activities,
providing inputs for agricultural production. These service activities take on various forms; for example,
an agricultural service occurs when a firm provides soil preparation services for a farming enterprise,
when a company performs crop planting, cultivating and harvesting services, when a veterinary provides
services for livestock, or when a firm provides temporary labor on a contract basis to farms during
production or harvesting, or even providing management expertise for farming enterprises. Although
these examples hint at the variety of services captured by the industry, they do not convey the sheer
number of activities performed by non-farm agricultural services. Such services include veterinary
services for pets and other animal specialties (e.g., non-livestock), landscape architectural and planning
services, lawn and garden services, and ornamental shrub and tree services.

Definition of Agricultural services

This industry report uses industry definitions and concepts that underlie the U.S. government's Standard
Industrial Classification (SIC) system. In the SIC system, agricultural services (SIC 07) is a major industry,
one of five such industries that form the agriculture, forestry, and fishing sector. According to the
Standard Industrial Classification, there are six separate agricultural services subsectors and 14 market
segments defined by broad service categories. Each of the 111,430 agricultural services establishments
operating in the United States in 1997 was placed in one of these six industry subsectors:

Soil preparation services (SIC 071), including plowing, application of fertilizer, seed bed
preparation and other services for improving the soil for crop planting;

Crop services (SIC 072), including crop planting, cultivating and protecting (e.g., aerial dusting
and spraying, cultivation services, disease control of crops, entomological services, irrigation
system operation systems, orchard cultivation services, seeding crops, pruning of orchard trees
and vines, and weed control); crop harvesting by machine; crop preparation services for market
(e.g., sorting, grading and packing of fruits and vegetables, grain cleaning and fumigation, drying
of corn, fruits and vegetables); and cotton ginning;

Veterinary services (SIC 074), including animal hospitals, veterinarians and veterinary services
for livestock, and animal hospitals, veterinarians and veterinary services for pets;

Animal services, except veterinary (SIC 075), including livestock services (e.g., artificial
insemination services, livestock breeding, milk testing, cattle spraying, vaccinating livestock,
sheep dipping and shearing, and custom slaughtering) and animal specialty services (e.g., animal
shelters, boarding horses, kennels, dog pounds, breeding of non-livestock animals, showing of
pets, horse training);

Farm labor and management services (SIC 076), including farm labor contractors and crew
leaders, and farm management services; and

Landscape and horticultural services (SIC 078), including landscape counseling and planning
(e.g., landscape architects, horticultural advisory services), lawn and garden services (e.g.,
garden planting, lawn care and mowing services, sod laying, turf installation), and ornamental
shrub and tree services (e.g., arborist services, ornamental tree planting and pruning, tree
planting and pruning, utility line tree trimming services).

Agricultural services have a growing presence in both the national and Washington State economies. In
1969, 0.5 percent of the nations total employment were employed in agricultural services industries. For
Washington, agricultural services only 0.4 percent of the states 1969 total employment. By 1997,
agricultural services share of total national employment had grown to 1.2 percent; while in Washington,
its share of total employment had tripled to 1.5 percent.

Current Status
In 1998, the Washington agricultural services industry employed 24,165 workers; representing about onefourth of the states workforce in natural resources. Growth in the number of agricultural services
establishments in Washington has been steady; between 1981 and 1998, the average annual growth in
establishments has been 6.8 percent, with non-farm agricultural services capturing the lions share (97
percent) of the industrys growth.

Figure 2
Number of Establishments in Washington Agricultural Services, 1981-1998
Source: Washington Employment Security Department
4,000

Number of establishments

3,500
3,000
2,500
2,000
1,500
1,000
500
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Non-farm related

Farm-related

The current employment picture of agricultural services is nearly three-fold larger than it was in the early
1980s. Between 1981 and 1998, farm-related agricultural services added over 5,700 workers, an
average annual growth rate of 8.7 percent; non-farm related agricultural services added nearly 10,000
workers for an average annual growth rate of 12.8 percent.
Key factors that affect the demand for agricultural services include the strength of the U.S. agriculture
sector and the general economy. Farm-related agricultural services are tied directly to the economic wellbeing to the farm sector. The economic well-being of the farm sector can be measured by any number of
factors including farm income, cash receipts, asset values (real estate and non-real estate), debt and
debt-to-asset ratios. Other factors have played an important role in the robust growth of farm-related
agricultural services. Similar to the vigorous growth in business services, outsourcing has become
increasingly commonplace from soil preparation and planting to cultivating and harvesting. Technological
advances within and outside agriculture have facilitated demand for agricultural services. Furthermore,
the mode of operations for agricultural firms has dramatically changed in recent decades. The drive for
improved productivity and increased competitiveness has resulted in the dramatic growth in the use of
temporary and contract workers.
With respect to non-farm agricultural services, personal disposable income and general economic
performance are the key demand factors. With rising disposable incomes and technological advances,
consumers have increased their demand for lawn and garden services, ornamental shrub and tree
services, and veterinary and animal services.

Figure 3
Employment in Washington Agricultural Services Industry, 1981-1998
Source: Washington Employment Security Department
30,000

Total covered employment

25,000
20,000
15,000
10,000
5,000
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Farm related

Non-farm related

Agricultural services in Washington is largely composed of small companies that provide various farmrelated and non-farm related services. One of the subsectors (landscape and horticultural services)
accounts for over 60 percent of the total 3,514 establishments, and average just over 4 employees per
establishment. By contrast, the farm labor and management services subsector averages 129 employees
per establishment, while animal services (except veterinary) averages around 3 employees per
establishment. Over 54 percent of all agricultural services workers are found in establishments with less
than 20 employees. More than three-fourths of all employees in this industry are in small businesses with
less than 100 employees.
Figure 4
Size of Establishments of Washington Agricultural Services Industry, 1998
Source: Washington Employment Security Department
60%
State

Share of total employment

50%

Agricultural services

40%
30%
20%
10%
0%
1-19

20-49

50-99
Number of employees per establishment

100-249

250-499

Average covered wages for agricultural service workers was $17,267 in 1998, nearly 50 percent below
the statewide nonfarm average of $33,922. In 1998, agricultural services employees wages and salaries
ranked twelve among seventeen services industries, and substantially lower than the statewide services
industry annual average at $35,996. With the exception of crop services, all other agricultural services
subsectors lost ground in real (i.e., without inflation) wages and salaries between 1981 and 1998. In
contrast, total services workers in Washington enjoyed a real increase of 60 percent in their wages and
salaries.
The distribution of hourly wages for agricultural services is dissimilar to the state, with a pronounced
disposition toward lower hourly wages. Nearly two-thirds of all workers in the agricultural services
industry earn $10 or less per hour, compared with 30 percent of all nonfarm workers in the state. In
contrast, only 7 percent of agricultural services workers earn $20 or more, compared with 28 percent of all
state nonfarm workers.
Table 1
Real Average Wages for Washington Covered Agricultural Services Workers, 1981-1998 (1998 dollars)
Sources: Washington Employment Security Department, U.S. Bureau of Economic Analysis
Sector
1981 1983 1985 1987 1989 1991 1993 1995 1997 1998
Soil preparation services
Crop services

$20,892 $16,775 $34,751 $26,557 $24,152 $23,135 $24,029 $21,155 $23,207 $19,970
$16,602 $15,510 $13,923 $14,677 $14,591 $14,496 $14,346 $15,356 $17,000 $17,924

Veterinary services

$18,001 $16,043 $13,649 $13,967 $14,267 $15,006 $15,623 $16,391 $17,178 $18,019

Animal services, ex. Vet.

$13,261 $12,225 $12,090 $12,476 $12,175 $12,366 $12,500 $11,853 $12,437 $12,825

Farm labor & mgmt. srvs.

$11,089

Landscape & hort.. srvs.

$20,751 $18,990 $17,613 $17,896 $17,335 $17,615 $18,001 $18,500 $19,301 $20,101

$5,596

$5,278

$5,177

$9,810 $11,940 $12,784 $10,820

$9,994

$8,556

Total, agricultural srvs.

$17,873 $16,213 $14,961 $15,316 $15,189 $15,588 $15,834 $16,295 $17,030 $17,267

State services (inc. ag. srvs.)

$22,525 $21,216 $20,583 $21,493 $21,592 $23,948 $24,908 $26,490 $30,653 $35,996

Statewide nonfarm

$28,783 $27,789 $27,313 $27,304 $27,167 $27,928 $28,575 $29,046 $31,504 $33,922

Figure 5
Hourly Wages for Washington Agricultural Services Workers, 1997
Source: Washington Employment Security Department
35%
State

Share of total employment

30%

Agricultural services

25%
20%
15%
10%
5%
0%
<$6

$6-$8

$8-$10

$10-$12 $12-$14 $14-$16 $16-$18 $18-$20 $20-$22 $22-$24 $24-$26

>$26

Hourly wage

The labor force in the agricultural service sector is dominated by agricultural workers and laborers. About
three-fourths of all workers are in these two occupation groupings. Common agricultural service
occupations within this group are agricultural graders and sorters, gardeners and groundskeepers, lawn

maintenance workers, and farm workers, machinists, and equipment operators. Professional and
technical and clerical occupations are also important in agricultural service. Although the majority of
agricultural service workers are within the agricultural workers and laborer grouping, a sizable share of
the subsectors employees are classified as professional and technical workers (e.g., veterinarians,
veterinarian technicians, landscape architects, agricultural and food technicians).
Table 2
Occupational Profile of Agricultural Services Workers in Washington, 1998 and 2008
Source: Washington Employment Security Department
Estimated 1998
Projected 2008
Agricultural services, SIC 07
Percent of
Percent of
Estimated
Total
Projected
Total
Employment Employment Employment Employment
Managerial & Administrative
1,377
8.3%
1,620
8.3%
Professional, Paraprofessional &
2,406
14.5%
2,794
14.4%
Technical
Sales & Related Occupations
263
1.6%
307
1.6%
Clerical & Administrative Support
2,534
15.2%
2,707
13.9%
Service Occupations
128
0.8%
122
0.6%
Agriculture, Forestry & Fishing
5,580
33.6%
6,618
34.0%
Production, Operating & Maintenance
373
2.2%
442
2.3%
Operators, Helpers & Laborers
3,067
18.4%
3,732
19.2%
Undefined Occupations
904
5.4%
1,114
5.7%
TOTAL
16,632
100.0%
19,456
100.0%

Contribution of Agricultural Services Industry to the Washington State Economy

Does the agricultural services industry merely serve local markets or is there a significant proportion of
the states agricultural services sold in non-local markets. The observation that a states employment
concentrates in a particular agricultural service industry (that is, that there is surplus labor employed in
producing a service), suggests that the state produces more than it needs and therefore exports the
surplus. The most commonly used measure for agricultural service export has been a simple index of
employment concentration which looks at an industrys share of total employment in a state. This share is
put into index form by dividing by the industrys share of total employment in the nation. An index number
greater than 1 suggests that the state produces a surplus in the business service which is exported
elsewhere. Accordingly, an index number of 1 would indicate little or no trade while an index number less
than 1 would suggest that the state imports the service.

Figure 6
Index of Specialization: Washington Agricultural Services, 1969-1997
Source: U.S. Bureau of Economic Analysis, Full-Part Time Employment Series
1.40

Index of specialization

1.30

1.20

1.10

1.00
1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

For agricultural services, the index of employment concentration indicates that this sector does play a role
in export trade in Washington. Unfortunately, no report has actually documented the amount of
agricultural services produced for export markets.

Outlook
In recent years, agricultural services has been among the fastest growing sectors of the states economy,
and this growth is expected to continue in the future, albeit at a slower pace. Agricultural services
employment will grow by an average of 3.2 percent per year between 1995 and 2005. Beyond 2005,
agricultural services employment is expected to slow significantly to an annual rate of 1.3 percent until
2020.

Figure 7
Wage & Salary Employment Forecast for Washington Agricultural Services, 1995-2020
Sources: Washington Office of Financial Management, Washington Employment Security Department
35,000

Total employment

30,000

25,000

20,000

15,000

10,000
1995

2000

2005

2010

2015

2020