By SHELLY STRAUTZ-SPRINGBORN
Michigan Correspondent LANSING, Mich. — With all the instability in the nation’s economy, agriculture is a balancing force in Michigan, according to a report from Michigan State University and the Michigan Department of Agriculture (MDA).
According to the Second Interim Update on the Economic Impact of Michigan’s Agri-Food and Agri-Energy System study recently conducted by the MSU Product Center for Agriculture and Natural Resources, Michigan’s second-largest industry experienced a 12 percent growth in 2007, to an estimated $71.3 billion industry.
“Agriculture is a force for economic stability in Michigan,” said Christopher Peterson, director of the MSU Product Center and a study author.
“This represents a $7.6 billion increase from the $63.7 billion impact projected in an analysis of 2006 data released last year.”
The study shows the agricultural economy expanding at a rate more than five times faster than the growth rate of the general economy – 11.9 percent versus 2 percent – between 2006 and 2007. Wayne H. Wood, president of the Michigan Farm Bureau, the state’s largest general farm organization, said the report findings support the strength and stability of the state’s agricultural industry.
“Farmers are independent business owners and this study is a real testament to their entrepreneurial skills and spirit and, more importantly, the tremendous investments they are making in Michigan,” he said.
MDA Director Don Koivisto agreed. “Michigan’s agri-food system represents almost 20 percent of the state’s overall economic engine, making it the second largest industry in Michigan, and it employs a quarter of the state’s work force,” Koivisto said. “This report further underscores the importance of this growing industry in rebuilding and diversifying Michigan’s economy.
“If Michigan’s agri-food sector appeared on the Fortune 500 list, it would rank 55th. To me, that speaks volumes about the vitality of the state’s dynamic food and agriculture business sectors, and the intrinsic role it plays in our state’s economic health.”
Evidence also suggests that employment in the agri-food system has increased since the last economic census data was made available in 2004.
“Our last analysis showed Michigan’s agri-food system accounting for 1.05 million jobs, both directly and indirectly,” said William Knudson, a product market economist with the MSU Product Center and the study’s lead author. “We won’t have updated job figures until 2010, but signs point to job growth, putting Michigan jobs related to agri-food well over 1 million.”
According to the report, much of the increase is due to higher prices for farm products. Based on data from the Michigan Agricultural Statistics Service, the report outlines large increases in feed crops, wheat, fruit and livestock production, as well as a slight decline in the state’s vegetable production.
In the fruit industry, most of the increase was generated by apples, blueberries and grapes. Vegetable production showed a small decline of $9.9 million, or about 3.8 percent from the 2006 update. This may have been due to declining vegetable acreage as farmers moved production from vegetables to row crops such as corn and soybeans.
Increases in corn and soybean prices have increased the cost of feed for livestock producers; however, total livestock sales increased by 9.5 percent, primarily due to increased dairy sales, although cattle, eggs and turkeys also registered increases.
While these figures show an outstanding growth rate for 2006 and 2007, industry experts caution that the agri-food system is not immune to the impacts of the global recession. According to Knudson, the agri-food industry may hit its peak for the next few years.
“Food is a necessity, so the agri-food industry, unlike tourism and manufactured goods, may fare better than other industries in an economic downturn,” he said. “But the system is not immune to the impacts of the global recession.”
The study is available online at www.productcenter. msu.edu under the tab for “Market Reports.” |
