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Impact study shows value of U.S. sheep industryImpact study shows value of U.S. sheep industry

Every $1 in sheep and sheep-related production added additional $2.87 to U.S. economy in 2016.

August 21, 2017

2 Min Read
Impact study shows value of U.S. sheep industry
Digital Vision

Sheep are a good investment for America, according to a new "U.S. Sheep Industry Economic Impact Study" completed by Dr. Julie Stepanek Shiflett of Juniper Economic Consulting.

The impact analysis revealed that every $1 in sheep and sheep-related production added an additional $2.87 to the U.S. economy in 2016, a multiplier effect of nearly three times the initial investment.

The report findings estimated the following:

* A $2.02 billion investment in sheep production activities — ranging from lamb production at the farm gate to exports of wool socks — generates a total economic benefit of $5.80 billion.

* Every $1 invested in sheep production and related sheep production activates generates $2.42 in total labor income.

* Every 10.4 jobs in the sheep industry at the farm gate support an additional 3.1 jobs in indirect industries (backward-linked) and another 6.0 jobs in induced enterprises (expenditures from sheep-related income) for a total of 19.50 jobs. In other words, one sheep job supports 0.30 jobs in backward-linked industries, another 0.58 jobs in induced industries, for a total of 1.88 jobs generated.

The study, commissioned by the American Sheep Industry Assn., follows previous impact studies in 2008 and 2011. The overriding differences in this study compared to the 2011 study is that the sheep industry has contracted, yet the modeling effort in this study improved, capturing more value added, including wool hosiery exports, lanolin and pelt shearling value.

The accuracy of the modeling effort is directly affected by the accuracy of the data used to build the model. The 2016 suspension of slaughter lamb prices sold on a carcass-based formula had multiple adverse effects on lamb marketing and flock rebuilding efforts and suspended the only lamb risk management tool, LRP-Lamb, but also hindered sheep industry analyses such as this impact study.

The sheep impact analysis reinforces the significance of economy-wide benefits of expanding lamb, wool and lambskin demand, according to the report's executive summary. The return from promotional activities expanding demand, and stimulating an investment in sheep, has a positive return not only for the sheep industry but for many other industries as well. Sheep production and new sheep investments have a positive effect in that they support local, rural jobs across industries.

Read the entire "U.S. Sheep Industry Economic Impact Study" report.

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