The Emerging Role of Agriculture in Economic Development

1
The Emerging Role of Agriculture in Economic
Development
Rex Ricketts, Director University of Missouri
Extension Commercial Agriculture Program
Commercial Agriculture Program
2
Overview

• Importance of Missouri's Agriculture
• Historical Changes in Agriculture
• Tractor
• Electricity
• Trailer Truck
• Economic Impact of Animal Production

3
Missouri Agriculture 2006

• 5.62 billion in farm receipts
• 55 livestock
• 45 crops
• Missouri ranks 2nd in the US in the number of
  farms
• 105,000 farms

Source USDA-NASS
4
Missouri Livestock Receipts - 2005 3.1 billion
Source USDA-NASS
5
What technology has changed agriculture the
most? Tractor Electricity Trailer Truck Bio
Fuels
6
Number of U.S. Farms
Source USDA-NASS
7
Number of U.S. Tractors
Source USDA-NASS
8
Number of U.S. Farms with Electricity
Note The use of electricity on farms after 1954
was so widespread throughout the states that
there seemed no need to obtain further information
Source USDA-NASS
9
Number of U.S. Tractors, Farms and Farms with
Electricity
Thousands of Farms
10
Trailer Trucks
11
One Trailer of Market Hogs

• 53,000 lbs. live weight
• 200 hogs
• 10,000 pork chops

12
One Trailer of Milk

• 50,000 lbs. of milk
• 5,813 gallons of milk
• 93,000 8 oz. glasses of milk
• 5,000 lbs. of cheese

13
600 Sow Farrow to Finish(25-ton Truck Lots)
Weekly Annual
Market Hogs 2 104
Corn 3.7 194
Soybean Meal 1.1 58
Supplement 0.12 6
Total 6.9 362
14
700-cow Dairy(25-ton Truck Lots)
Weekly Annual
Milk 7 365
Feedstuffs(includes Corn Silage, Alfalfa Silage, Alfalfa Hay, Grass Hay, Corn, Soybean Meal, Cotton Seed and Mineral/Vitamins 10.5 507
Total 17.5 872
15
Economic Impact of Animal Agriculture
16
2,400-head Contract Finishing Unit

• Swine Construction Economic Impact
• Construction Cost 520,000 (includes
  buildings, manure storage and water supply)

17
2,400-head Contract Finishing Unit

• Farm level annual economic impact
• 122,000 in gross revenue to swine operation
  including contract payments and manure value
• 3,500 spent on real estate and property taxes
• 5,000 spent on utilities
• 500 acres needed for feed (corn)
• 320 acres for manure application in corn soybean
  rotation
• 50 per acre fertilizer value
• 207,000 in annual economic activity state wide
  (multiplier effect)

18
700-cow Dairy Operation

• Dairy Construction Economic Impact
• Construction Cost 2,483,000 (includes milking
  parlor, freestall barn, holding area, bunker
  silo, manure storage and water supply)
• Dairy machinery needed 250,000

19
700-cow Dairy Operation

• Farm Level Annual Economic Impact
• 2.4 million in gross revenue to dairy
• 6.0 million in economic activity (multiplier
  effect)
• 10,000 spent on real estate and property taxes
• 60,000 spent on utilities, fuel and oil
• 11 full-time positions created (260,000 in labor
  expenses)
• 1,466 acres needed for feed (corn silage,
  alfalfa, etc.)
• At least 1,626 acres needed for nutrient
  management
• 32 to 56 per acre fertilizer value

20
Multiplier Effect of Missouris Livestock Sector
2005
Sector Cash Receipts Additional Impact Total
-- Millions of dollars -- -- Millions of dollars -- -- Millions of dollars --
Beef 1.2 1.1 2.3
Poultry 971 ? ?
Pigs 616 484 1.1
Dairy 298 631 929
21
Biofuels Industry
22
Annual Operation Impacts of the Four Ethanol
plants (160 MGY)
Category Direct Indirect Induced Total
Employment (jobs) 161 2,146 715 3,022
Labor income (million dollars) 20 73 27 121
Value added (million dollars) 36 130 50 215
Net total output (million dollars) 285 192 45 522
Tax revenues at the federal, state and local
level - 43 million Corn Used in Production 56
million bushels
Golden Triangle Energy, LLC. Craig, Missouri
23
Yearly Operating Expenses for Ethanol Plants
Purchases Current Production 500 MGY 800 MGY
Corn 126 million 592 million 942 million
Natural gas 40 million 132 million 212 million
Electricity 5 million 17 million 27 million
Enzymes and chemicals 15 million 50 million 82 million
Repairs and maintenance 6 million 19 million 31 million
Labor 8 million 28 million 45 million
Water 2 million 6 million 10 million
Depreciation 14 million 43 million 70 million
Other 24 million 75 million 120 million
Total operating expenses 241 million 961 million 1.5 billion

24
Conclusions

• Why agriculture has changed
• Animal agriculture is an important economic
  contributor to Missouris economy
• Animal agriculture faces new opportunities and
  challenges with the growing biofuels industry

25
The Emerging Role of Agriculture in Economic
Development
Rex Ricketts, Director University of Missouri
Extension Commercial Agriculture Program
Commercial Agriculture Program