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, 00185!l Chapter 2 PROJECTIONS OF KANSAS ECONOMY A summary of the economic projections is presented in this chapter. A more complete discussion of the trends, assumptions, and analytical techniques underlying the forecasts of the Kansas economy can be found in lnterind~ Projections of the Kansas Economy: Industry and Regional Forecasts for 1980, 1990, 2000, 2010, and 2020, by Dr. M. Jarvin Emerson. Most of the material in this chapter was taken from Chapter 8 of Dr. Emerson's report. The base year for the study was 1965; consequently, al I dollar value forecasts are in 1965 dollars. In the interindustry projections report, the industrial grouping combined various standard industrial classifications (SIC). Definitions of the sectors and the SIC numbers included in each industrial grouping can be found in Appendix A. In this chapter the 69 industrial groupings for the state are discussed. In later chapters the regional level economic activity is combined into 20 groupings. Definitions of regional industrial aggregations are shown in Appendix B. Output Historically, Kansas has been a major food producing state with many of its manufacturing and service industries closely tied to agriculture. Cattle and wheat production, in particular, have spurred the develop- ment of sizeable meat packing and grain milling industries. Likewise, chemical, farm machinery, and agricultural service industries have been formed to supply inputs to farm enterprises. The future of the farming and agri-business industries depends most importantly on domestic population and income growth, foreign markets, and competitive shifts in production. The results of the projection model indicate that the output of the farm sectors and related agri-business industries will continue to expand but at a rate below the average state growth rate. These projections reflect the income inelasticity of demand for food and no appreciable increase in new foreign markets. As a result, farming and agri-business industries are expected to represent a declining proportion of the state's total production. As indicated in Table 2-1, cattle and wheat will continue to represent the largest cash receipts sectors in farming. Receipts from cattle are projected to increase from $597 mi II ion in 1965 to $891 mi 11 ion by 1980, to $1,376 million by 2000, and to $2,015 mill ion by 2020. Wheat output is expected to increase from $322 million in 1965 to $471 mi II ion in 1980, to $686 mill ion in 2000, and to $946 mill ion in 2020. The most sizeable production shift is projected for soybeans which is expected to have the most rapid growth rate.