Investor Presentaiton
METHODOLOGY
One of the most effective ways for the SCDA to increase the economic
impact of the agribusiness cluster in the coming decade is to identify
agribusiness product categories that meet two criteria: (1) categories
that have a large unmet demand in South Carolina and (2) categories
that already have a well-established presence in South Carolina. The
importance of the first criteria is obvious: without an existing unmet
demand there is limited potential to increase total economic activity
through additional local purchasing. However, large unmet demand for
a product category without an existing in-state presence could also be
problematic. For example, consider product categories, such as cheese,
for which there is very little production in South Carolina and yet high
unmet demand. The startup costs associated with establishing such a
new industry could be large relative to product categories in which
there is both high unmet demand and an existing industry infrastructure
that can be expanded.
In order to identify the categories that meet both criteria, the total
supply, total demand, and Regional Purchase Coefficient (RPC) values
of each product category must first be identified. Next, the total
unmet demand can be calculated by taking the difference between
the total demand and the total supply. Finally, the RPC values can be
used to determine the extent to which each product category has an
established industry presence within the state. An RPC is specifically
defined as the percentage of the total in-state demand that is satisfied
by in-state suppliers. Thus, any product category with an extraordinarily
low RPC is likely to be a category in which there is no significant
industry production in South Carolina. For example, the RPC for the
cheese industry is 0.4 percent, meaning that 99.6 percent of all cheese
purchased by South Carolinians is produced outside of the state and
then imported for consumption.
There are 100 commodity categories that encompass the South
Carolina agribusiness cluster - 58 in agriculture and 42 in forestry.
Table 7 reveals the top 15 as ranked by the highest dollar volume
of unmet demand. As of 2020, South Carolina consumers were
purchasing a total of $23.8 billion in agribusiness product categories
for which total demand exceeded total supply, while South Carolina
businesses produced $12.1 billion in these same categories. The
difference between these two - $11.7 billion - represents the potential
unmet demand that firms within the state's agribusiness cluster could
potentially capture.
This study estimates
that South Carolina
currently imports
$11.7 billion in
agribusiness products
from outside of
the state for final
consumption. This
represents an unmet
local demand that,
if captured by local
agribusiness firms,
would increase the
total current impact
of South Carolina
agribusiness by
nearly 23 percent.
SCDA
18790
CULTURE
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