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Study: Iowa pork industry remains important economic driver

Pork industry contributed $36.7 billion in sales to state in 2015.

A new study commissioned by the Iowa Pork Producers Assn. (IPPA) shows that the state's pork industry continues to be a key contributor to rural Iowa and the state's economy.

The economic contribution study was conducted in late 2016 by Decision Innovation Solutions in accordance with methods prescribed and endorsed by the Minnesota IMPLAN Group. The research results are based on IMPLAN modeling data from 2015.

According to the results, the industry contributed $36.7 billion in sales in 2015, with $13.1 billion (35.6%) from swine production, $18.3 billion (49.7%) from hog slaughtering and $5.4 billion (14.7%) from pork processing.

The sales total included $12.2 billion in added value beyond the $24.5 billion cost of inputs. In 2015, there were 141,813 jobs associated with the pork industry, or about the total combined populations of Ames, Ankeny and Coralville, Iowa, with nearly 52% of the jobs in production alone.

The study also found that one in nearly 12 working Iowa residents had a job tied to the pork industry. In fact, the industry produced $8.3 billion in labor income and contributed $756.4 million in state and local taxes and $1.56 billion in federal taxes in 2015.

"Iowa has long been the nation's leader in swine production because of the proximity to abundant supplies of corn and soybeans -- the primary components in swine feed," IPPA president Curtis Meier said. "We're proud of our ranking and are pleased that the industry is such a profound economic contributor to our local communities. The study shows what pork does for rural Iowa."

In addition to analyzing state-level hog production and related economic activity, county-level results for a cross-section of 25 Iowa counties were estimated. These included some of the top producing counties (Hardin, Plymouth and Washington) as well as some of the lesser-producing ones (Iowa, Marshall and Union).

The average hog inventory per county was 206,623 head, while the average number of hog farms per county was 63, resulting in an average inventory per Iowa hog farm of 3,265 head.

The inventories of the 25 focus counties selected for further analysis accounted for 31% of Iowa's hogs. Additionally, these counties represent 28% of the farms in Iowa, with an average inventory per hog farm of 3,671 head -- 406 more than the statewide average head per farm.

Iowa's pork industry relies heavily on the ability of corn and soybean farmers to produce abundant supplies to feed pigs. As such, the study looked at how many acres of Iowa cropland are dedicated to feeding pigs in Iowa.

The results showed that hogs raised in Iowa consume grain grown on more than 5.7 million acres: 3.3 million acres of corn and dried distillers grains with solubles, and 2.4 million acres of soybeans. Overall, pigs eat 24.7% of the acres planted to corn and soybeans in the state: 24.5% of the acres planted to corn and 25% of the acres planted to soybeans.

"Our association represents the best pig farmers in the nation, and they are committed to humanely raising quality pork at the lowest cost possible," Meier said. "Farmers are the original environmentalists and work daily to preserve our natural resources for future generations by supporting the Iowa Nutrient Reduction Strategy, abiding by manure management plans developed for their farms and actively contributing to and supporting their local communities."

Decision Innovation Solutions also looked at what effects the construction and operations of a new, 2,400-head wean-to-finish hog barn in Iowa would have on the local and state economy. Employment, labor income, value added and sales are all common measures of economic activity. An Iowa hog farm relies on roughly 30% of its needs from local businesses.

Construction of a new hog farm requires purchases of steel, concrete and equipment. Once completed, the farm purchases feed, veterinary care and other professional services and several more inputs to produce hogs for sale. As such, the study found that one new barn would generate 14.6 jobs and provide more than $869,000 in labor income, $1.1 million in value added and $2.3 million in sales.

TAGS: Business
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