Animal Agriculture Economic Analysis: National Overview and State of Indiana

1
Animal Agriculture Economic Analysis National
Overview and State of Indiana

• Prepared for
• United Soybean Board
• October 2007

2
Project objectives

• Compile data on the breakdown of animal
  agriculture by species in each state in key
  soybean and livestock states.
• Estimate SBM consumption in each state by
  species.
• Analyze the economic impact of animal agriculture
  on output, earnings, employment and tax revenue
  for each state.
• Analyze the effect of changes in animal
  agriculture production.

3
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

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Most of US animal agriculture expanded between
1997 and 2006

• The cattle cycle at work ...
• Swine output slowly advancing ...
• Historic broiler growth continuing ...
• Turkeys on the recovery ...
• Eggs new respectability ...
• Dairy productivity boosting output ...

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US cattle calf production, 1997-2006
The cattle cycle at work ...
6
US hog pig production, 1997-2006
Swine output slowly advancing ...
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US broiler production, 1997-2006
Historic broiler growth continuing ...
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US turkey production, 1997-2006
Turkeys on the recovery ...
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US egg production, 1997-2006
Eggs new respectability ...
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US milk production, 1997-2006
Dairy productivity boosting output ...
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US output index, 1997-2006
All sectors, except turkeys, experienced growth
in volume
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Animal agriculture can boost state economies

• It is a big factor in some states already
• At the farm level
• At slaughter, processing and manufacturing levels
• Growth in output is concentrated in a small
  number of states for each species
• They benefit from direct investment and jobs
• And state economy is boosted by multiplier
  effects
• Animal agriculture is also the leading source of
  demand for soybean meal

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State SBM use by species, 1,000 tons, 2005/06
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State SBM use by species, 1,000 tons, 2005/06
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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
• Other (mostly hogs and pigs)

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Multipliers are bigger for a larger region
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Economic impact of 2006 animal agriculture
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Economic impact of 2006 animal agriculture
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Impact of changes in animal output, 1997-2006
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Impact of changes in animal output, 1997-2006
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Shifts in hog pig location a good example
Here blue states are the winners
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Major factors behind relocation

• Shift to industrial scale animal agriculture
  prompts fresh look at location of feed supply,
  land costs, and environmental requirements.
• Corn and soybean production shifting west
• CAFO rules on animal waste management
• Labor costs a factor for slaughter and
  processing, but less so at farm level

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Indiana
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Animal agriculture is important to Indiana

• In 2006, Indiana ranked 20th in the nation in
  receipts from livestock sales.
• Indiana ranked 4th in soybean production.
• Animal agriculture in Indiana consumes important
  quantities of soybean meal.
• An expanding animal agriculture sector creates
  economic activity, income, jobs and tax revenue
  throughout the state economy.

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Indiana value of production, by species, 2006
Data for broilers withheld.
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Indiana soybean meal use by species, 2005/06
Data for broilers unknown.
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Indiana cattle calf production up in 2006
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Indiana hog pig production variable
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Indiana turkey production increased in 2006
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Indiana egg production up
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Indiana milk production growing steadily
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Indiana output index, 1997-2006
Data withheld from 1997 to 2005
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Indiana soybean meal use for feed
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RIMS-II multipliers for Indiana
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Economic impacts in Indiana