Animal Agriculture Economic Analysis: The National Overview

1
Animal Agriculture Economic AnalysisThe
National Overview

• Prepared by
• Promar International
• for
• United Soybean Board
• June 2010

2
Objectives
Gather information on and analyze the following

• Animal agriculture production, by state and by
  product
• Usage of soybean products particularly soybean
  meal - in animal agriculture
• Quantify the economic impacts of animal
  agriculture

3
Analysis

• Compiled data on animal agriculture by segment in
  each state.
• Estimated soy feed consumption by state and
  segment.
• Analyzed the economic impact of animal
  agriculture in each state, in terms of output,
  earnings, employment and tax revenue.
• Identified significant market trends that may
  change the dynamics of this market.
• Provided analysis at both the state and national
  levels.

4
Animal agriculture database

• Sources
• National Agricultural Statistics Service (NASS)
• Economic Census, Department of Commerce
• Census of Agriculture
• Bureau of Economic Analysis, Dept. of Commerce
• Content of Excel files
• Quantity value of production, farm numbers
• Input purchases, SBM use, animal processing
• Economic impact output, earnings, jobs, taxes

5
Most of US animal agriculture expanded between
1999 and 2009

• Economic downturn beginning in 2007 has impacted
  production negatively.
• Cattle production down and variable lately.
• Pork production up except in 2009.
• Broiler production up except in 2009.
• Turkey production up except in 2009.
• Egg production suffered last two years.
• Steady trend up for milk production.

6
US cattle calves production, 1999-2009
Cattle production is in slow decline
7
US cattle calves production shifts, 1999-2009
8
US hogs pigs production, 1999-2009
Hog pig output advancing ...
9
US hogs pigs production shifts, 1999-2009
10
US broiler production, 1999-2009
Broiler growth continuing ...
11
US broiler production shifts, 1999-2009
12
US turkey production, 1999-2009
Turkey output increasing slowly, cyclically
13
US turkey production shifts, 1999-2009
Iowa Minnesota data are for 2008, the last
year they were reported
14
US egg production, 1999-2009
Eggs have experienced slow steady growth
15
US egg production shifts, 1999-2009
16
US milk production, 1999-2009
Milk production showing consistent growth
17
US milk production shifts, 1999-2009
18
US output index, 1999-2009Cattle, hogs, milk
All sectors, except cattle, experienced growth in
volume
19
US output index, 1999-2009Poultry products
All sectors experienced growth in volume.
20
Animal agriculture can boost state economies

• Animal agriculture plays a major role in the
  economy of several states, and is important for
  nearly all states
• The impacts are many
• States benefit from the direct investment and
  jobs, both at the farm level and at the
  slaughter, processing, and manufacturing levels
• They also benefit from multiplier effects
• Animal agriculture is also the leading source of
  demand for soybean meal
• Growth in output is usually concentrated in a
  small number of states for each segment

21
Multipliers estimate broader economic impact

• Regional Industrial Multiplier System from the
  Department of Commerce
• Output and earnings multipliers of total
  output and household earnings created by 1 of
  production in an industry
• Employment multiplier of jobs per 1 million
• Three animal agriculture industries defined
• Cattle ranching and farming (beef dairy)
• Poultry and egg production
• Hogs and pigs / other

22
Economic impact of 2009 animal agriculture
23
Economic impact of 2009 animal agricultureContinu
ed
24
Impact of changes in animal output, 1999-2009
25
Impact of changes in animal output,
1999-2009Continued
26
Change in economic impact, 1999-2009
27
Change in wage earnings, 1999-2009
28
Change in jobs, 1999-2009
29
Change in income tax revenue, 1999-2009
30
State SBM use by segment, 1,000 tons, 2008/09
WHData withheld
31
State SBM use by segment, 1,000 tons, 2008/09
continued
WHData withheld
32
Percent of SBM usage by state
33

Indiana
34
Animal agriculture is important to Indiana

• In 2009, Indiana ranked 19th in the nation in
  receipts from livestock sales.
• Indiana ranked 4th in soybean production.
• Animal agriculture in Indiana uses significant
  quantities of soybean meal.
• Indiana ranks 2nd in the number of layer chickens
  with over 69 million hens. The state is also 4th
  in the nation in egg production.

35
Economic multipliers for Indiana

• Every million dollars of livestock product output
  in Indiana results in 2.3 - 2.8 million in
  total economic output in the state,
• Generates 350,000-440,000 in family income,
• And is responsible for 22-23 additional jobs.

36
Economic impacts in Indiana
37
Indiana output index, 1999-2009

• Cattle production increased in 2009.
• Hog production has increased over the past two
  years.
• Milk production increased by 50 over the past
  decade.
• Egg production has expanded.
• Turkey production has increased by almost 50 in
  the last decade.

38
Indiana value of production, by segment, 2009
39
Indiana cattle calves production
40
Indiana hogs pigs production
41
Indiana turkey production
42
Indiana egg production
43
Indiana milk production
44
Indiana soybean meal use for feed
45
Indiana soybean meal use by segment, 2008/09