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Food & ag sectors contribute $7 trillion to US economy

Feeding the Economy.jpg
New report on Feeding the Economy commissioned by a group of 23 food and agriculture organizations from farm-to-fork.

More than one-fifth of the nation’s economy is linked, either directly or indirectly, to the food and agriculture sectors with a total economic impact of $7.06 trillion, according to a new nationwide economic impact study. Further, it found that more than one-fourth of all American jobs are similarly connected.

This research, available at www.FeedingTheEconomy.com, was commissioned by a group of 23 food and agriculture organizations. Particularly the report found a total of 45,582,086 million jobs tied to the food and agriculture sectors, with an estimated wages of $2.06 trillion. The sector also contributes an estimated $154.4 billion in exports.

The food and agriculture industries are dynamic contributors to the U.S. economy, accounting for about $2,819.79 billion in output or about 14.1% of total national output.  They employ approximately 22.78 million Americans who earned wages and benefits of about $729.37 billion. Economic activity in the food and agriculture sectors generates as many as 22.8 million jobs and $4,244.05 billion economic output in supplier industries and sectors supported through induced spending. Members of the industries and their employees, and these supplier and induced industries, paid $913.13 billion in federal, state and local taxes.  This does not include state and local sales taxes or excise taxes that may apply for specific retail services.

For the purpose of the study, the food industry included any businesses involved in food agriculture, food manufacturing, food wholesaling, and food retailing (so-called “farm to fork”). John Dunham & Associates conducted this research, which was funded by The Goodstone Group.

To measure the total economic impact of the sectors, the analysis also includes the indirect and induced economic activity surrounding these industries, which captures upstream and downstream activity. For example, when a farm equipment retailer hires new employees because farmers are buying more tractors, experts consider the new salaries as an indirect impact. Similarly, when a retail associate spends her paycheck, an induced economic impact occurs. Together, these impacts have a multiplier effect on the already formidable direct impact of food and agriculture.

The spending by employees of the industry, and that of indirect firms whose jobs are directly dependent on the food and agriculture industries, includes everything from housing, to food, to education and medical care – and makes up what is traditionally called the “induced impact,” or multiplier effect, of the food and agriculture industries. For 2019, the induced impact of the industry generates 11.99 million jobs and $2,050.56 billion in economic impact, for a multiplier of 0.73.

Dr. Barbara P. Glenn, chief executive officer of the National Association of State Departments of Agriculture ((NASDA), stated, “Whether they’re selling here at home or across the globe, farmers and ranchers make integral contributions to the American economy.  Diverse markets for agriculture feed a healthy, job-producing economy in every state of our country.”

 “A lot of people don’t understand the significant effects agriculture has on their lives. The more resources farmers and ranchers have at their disposal to help connect with folks in their community and talk more about the economic significance of farming and ranching, the more those much-needed conversations can take place,” said House Agriculture Committee Chairman Collin Peterson (D., Minn).

“While more and more Americans are becoming interested in the food they eat, we must ensure they know the value of what farmers and ranchers do,” added Senate Agriculture Committee Chairman Pat Roberts (R., Kan.). “Everyone can benefit from knowing of the great contributions of agriculture to our economy, to our rural communities, to our security, to our culture and yes, to our natural resources.”

Many agricultural industry groups welcomed the reports ability to identify positive contributions to the U.S. economy.

Dawn Sweeney, president and CEO of the National Restaurant Assn. (NRA), stated, “Every day, the restaurant industry serves more than 170 million customers. To do that, we rely on America’s farmers and ranchers to provide safe, abundant, and affordable food options to more than one million restaurant locations. A strong and healthy agriculture sector is critical for the restaurant industry’s ongoing success.”

“As nature’s renewable building block, corn is a versatile resource that can be used for just about everything. In 2018, U.S. corn refiners exported over $2.0 billion in goods, adding $4.7 billion to the U.S. economy,” John Bode, president and CEO of the Corn Refiners Assn. (CRA). “This study illustrates the pivotal role that the food and agriculture industries play in feeding the economy.”

Chris Jahn, president and CEO of The Fertilizer Institute (TFI), said, “We often talk about fertilizer’s ability to feed the world in a sustainable manner, but there is no doubt we also feed the economy. The U.S. fertilizer industry provides nearly $155 billion annually to the economy, contributing $15 billion in taxes and supporting 500,000 jobs paying $38 billion in wages.”

Sponsoring Organizations include: American Bakers Assn., American Beverage Assn., American Farm Bureau Federation, American Frozen Food Institute, American Soybean Assn., Biotechnology Innovation Organization, CRA, Grocery Manufacturers Assn., Food Marketing Institute, North American Meat Institute, NASDA, National Association of Wheat Growers, National Chicken Council, National Confectioners Association, National Corn Growers Assn., National Grocers Assn., North American Millers Assn., National Automatic Merchandising Assn., NRA, SNAC International, TFI, The Sugar Assn. and United Fresh Produce Assn.

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