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Economic Impacts of Alabama's Agricultural, Forestry, and Related ALABAMA AGRIBUSINESS COUNCIL Promoting and Developing Alabama’s #1 Industry Economic Impacts of Alabama’s Agricultural, Forestry, and Related Industries A report by The Department of Agricultural Economics and Rural Sociology, Auburn University February 2013 Acknowledgments The authors would like to thank Dr. Gary Lemme, director of the Alabama Cooperative Extension System; Dr. William Batchelor, dean of the Auburn University College of Agriculture; and Dr. James Shepard, dean of the Auburn University School of The total Forestry and Wildlife Sciences, for their encouragement and financial support for this project. Special thanks are extended output and to Leigha Cauthen and the Alabama Agribusiness Council for coordinating stakeholders and providing financial support for this project. The authors are also grateful to various participating employment organizations and stakeholders who commented on earlier versions of this report and provided financial support through impacts of the Alabama Agribusiness Council. Authors agriculture, The Auburn University Department of Agricultural Economics and Rural Sociology forestry, and related industries Deacue Fields, Associate Professor and Extension Economist were $70.4 billion Zhimei Guo, Postdoctoral Research Fellow and 580,295 jobs. The University of Florida Center for Economic Impact Analysis Alan W. Hodges, Director of the Economic Impact Analysis Program Mohammad Rahmani, Economic Analyst The Alabama Cooperative Extension System (Alabama A&M University and Auburn University) is an equal opportunity educator and employer. ANR-1456 www.aces.edu Economic Impacts of Alabama’s Agricultural, 1 © 2013 by the Alabama Cooperative Extension System. All rights reserved. Forestry, and Related Industries HighLighTS Economic Impacts of • The agricultural and forestry industries generate an additional $0.77 in the state economy per dollar of output. Alabama’s Agricultural, • The output impact of the agricultural and forestry industries Forestry, and Related Industries translates to $10,770 per capita. The agricultural and forestry industries consist of crop, livestock, • On average, agricultural and forestry production generates timber, and fisheries production; food and kindred products 10 jobs per $1 million in direct sales. manufacturing; and forest product manufacturing. Related industries • On average, 1 out of every 4.6 jobs in the state is related to encompass food and kindred products distribution and agricultural agriculture and forestry. inputs and services. These also utilize goods and services from other • Agricultural, forestry, and related industries generate an industries as well as local labor, which additionally contributes to the additional 9 jobs for each job in production agriculture, state economy. forestry, and fisheries. • Agricultural, forestry, and related industries account for the second largest number of jobs in the state. In summary, the agricultural, forestry, and other related industries have a significant impact on Alabama’s economy in output($70.4 billion), value added ($30.8 billion), and jobs created (580, 295 jobs). They also provide social benefits and ecosystem services, which greatly enhance the quality of life in Alabama, but are not accounted for in this analysis. The U.S. Fish and Wildlife Services reported the output and employment impacts of hunting, sportfishing, and wildlife watching, which totaled $3.6 billion and 42,319 jobs in 2006 (see appendix). The impacts of all nature-based recreation are even higher. 2 Alabama Cooperative Extension System Economic Impacts of Alabama’s Agricultural, 3 Forestry, and Related Industries INTrodUCTioN Alabama’s Agricultural Industry Figure 1. Sales of Agricultural Products by Commodity Groups Agriculture represents a significant component of the Alabama Vegetable & fruit 1.4% All other crops 2.8% economy. In 2010, the farm gate sales of agricultural commodities Other animal production 2.1% totaled $4.7 billion (Figure 1). The sales* of agricultural commodities Catfish 2.3% included the following: • $3.8 billion for livestock and poultry Cattle 8.4% • $918.3 million for crops Commercial fishing1.3% Cotton 3.0% Dairy & milk products Agricultural production sales included the following: 0.7% Grain 2.6% • $3.1 billion for poultry and eggs • $394.5 million for cattle Greenhouse, nursery & floriculture5.1% • $237.8 million for greenhouse, nursery, and floriculture production Peanuts • $139.9 million for cotton 2.1% Soybeans • $122.1 million for soybeans 2.6% • $119.7 million for grain farming • $107.5 million for catfish Poultry & egg production 65.6% Total Sales = $4.7 billion *Sales are gross receipts or income (at invoice values) received for commodities or services provided. Source: Federal government data as reported in IMPLAN (MIG, Inc. 2010). The sales of catfish and peanuts are disaggregated from “Other animal production” and “All other crops” using NASS and ERS data (NASS 2011; ERS 2012). 4 Alabama Cooperative Extension System Economic Impacts of Alabama’s Agricultural, 5 Forestry, and Related Industries Value Added Processing Sectors The value added* of products totaled $1.2 billion (Figure 2). The value added of agricultural The sales of primary agricultural processing sectors totaled $13.0 billion in 2010 (Figure 3). The commodities includes the following: following are the largest manufacturing sectors: • $784.9 million for livestock and poultry (the largest sector is poultry and egg with $587 million) • $5.2 billion for poultry processing • $1.5 billion for animal food manufacturing • $373.5 million for crops (the largest sector is greenhouse, nursery, and floriculture with • $1.3 billion for soft drink and ice manufacturing $152.8 million) Figure 3. Sales of Primary Agricultural Processing Sectors Figure 2. Direct Value Added of Agricultural Products by Commodity Groups Soybean & other oilseed All other food Vegetable & fruit 3.0% 3.5% Tobacco 1.9% All other crops 3.8% manufacturing 6.6% Other animal production 5.9% Soft drink & ice Poultry & egg production 50.7% 9.9% Catfish 2.9% Animal food manufacturing 11.4% Snack food Cattle 5.7% 4.2% Bread bakery 2.5% Other animal Cotton 2.5% slaughtering & Coffee & tea 2.0% Commercial fishing1.6% processing 6.3% Dairy & milk products 1.0% Fats & oils 6.0% Seafood product Fluid milk & 3.4% Greenhouse, nursery & floriculture13.2% butter 2.0% Grain 2.4% Peanuts 2.6% Poultry processing 40.3% Soybeans 4.7% Total Value Added = $1.2 billion Total Sales of Processed Agricultural Products = $13.0 billion Source: Federal government data as reported in IMPLAN (MIG, Inc. 2010). The sales of catfish and peanuts are disaggregated from “Other animal production” and Source: Federal government data as reported in IMPLAN (MIG, Inc. 2010). “All other crops” using NASS and ERS data (NASS 2011; ERS 2012). *Value Added is a broad measure of income, representing the sum of employee compensation, proprietor income, other property income, indirect business taxes, and capital consumption (depreciation). Value added is a commonly used measure of the contribution of an industry to regional economy because it avoids double counting of intermediate sales. 6 Alabama Cooperative Extension System Economic Impacts of Alabama’s Agricultural, 7 Forestry, and Related Industries Alabama’s Forestry Industry Value Added The sales of forest products and related sectors totaled $11.2 billion in 2010 (Figure 4). This includes the following: The value added of forest products and related sectors totaled $3.7 billion in 2010 (Figure 5). This includes the following: • $10.2 billion for forest products manufacturing • $204 million for forestry nurseries, nontimber forest products, and timber tract production • $805.8 million for commercial logging • $3.2 billion for forest products manufacturing • $383.8 million for commercial logging Forest products manufacturing made up 91 percent of all forestry-related sales of which these are the largest sectors: • $107.7 million for forestry nurseries, nontimber forest products, and timber tract production • $3.8 billion for paper mills • $2.5 billion for paperboard mills Figure 4. Sales of Forest Products and Related Sectors Figure 5. Direct Value Added of Forest Products and Related Sectors Other forest products manufacturing 17.5% Commercial logging 7.2% Other forest products Commercial logging manufacturing 18.3% 10.3% Forestry nurseries, nontimber forest products, and timber tract production 1.8% Forestry, forest products, Sawmills and timber tract production 2.9% and wood preservation 9.9% Sawmills and wood preservation 7.4% Paperboard container manufacturing Paperboard 6.4% Paper mills 34.5% container manufacturing Paper mills 35.0% 4.3% Paperboard mills 22.7% Total Sales = $11.2 billion Paperboard mills 21.8% Total Sales of Forestry and Commercial Logging = $1.0 billion Total Value Added = $3.7 billion Total Sales of Forest Products Manufacturing = $10.2 billion Note: The total value added excludes the value added of commercial hunting and trapping, Note: The total sales excludes the output of commercial hunting and trapping, which is less which is less than 5 thousandths of total value added. than 2 thousandths of total sales. Source: Federal government data as reported in IMPLAN (MIG, Inc. 2010) Source: Federal government data as reported in IMPLAN (MIG, Inc. 2010). Economic Impacts of Alabama’s Agricultural, 8 Alabama Cooperative Extension System Economic ImpactsForestry, of Alabama’s and Related Agricultural, Industries 99 Forestry, and Related Industries
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