Food processing in New York state: a comparative analysis

Abstract

Food processing as an activity, is crucial to the nation's economy both as part of manufacturing and the overall food system. The states across the nation have differed in their contributions to this sector, with New York having been the leader in the production of processed food before World War II. By 1960 it had slipped to second place, and it ranked seventh by 1982. Production of the food manufacturing industry increased by 24 percent during the period, but it was less than a fourth the US rate. The drop in employment was also four times the US rate. Nevertheless, food processing still maintains a sizable share of both the nation and state's economy. This research aims at providing a portrait of food manufacturing with special emphasis on New York state. By making a comparative analysis of the state, the Mid-Atlantic region and the US, it is hoped that this quest will reveal the key regional and national factors that affect the food processing industry. The study uses data from the US Bureau of the Census to analyze performance of the sector. The analysis reveals that although New York state may seem to be on the decline, its performance still compares favorably to the rest of the nation. Using Industrial Organization theory, a model is designed to quantify the performance response of the industry to the behavioral environment it faces. It was found that as a whole, the industry's performance is heavily impacted on by the cost of labor as compared to other input costs. This suggests the increasing importance of human resources, with the skills and capacity of the work force taking on major consideration in determining the efficiency and competitiveness of the food processing industry.