Animal agriculture gives tremendous boost to Nebraska’s economy
By Dr. Donis Petersan and Dr. Ken Lemke | 1/9/2008

Animal agriculture, consisting of livestock and poultry production, is an important part of the Nebraska economy. It accounts for billions of dollars in output value, wages, profits (net farm income), value added and tax revenues — and contributes to the economic health of all parts of the state.

In 2006 the value of output for Nebraska’s animal agriculture sector was estimated at more than $7.5 billion. Yet the importance of animal agriculture becomes even more apparent when one considers its total impacts on the Nebraska’s economy, including direct and secondary economic effects.

The animal agriculture sector purchases most of the inputs used in production from other sectors of the local economy, including the grain producing sector, feed and feed supplement manufacturers and distributors, local elevators, farm equipment manufacturers and distributors, farm supply stores, veterinarians and animal health product manufacturers and distributors, financial and insurance services and electric utilities and other energy providers, as well as a variety of other local businesses.

Because this sector purchases the greatest share of its input requirements locally, it has very substantial indirect and total impacts on local economies throughout Nebraska, both in the metropolitan areas and throughout the other communities and the rural areas of the state.

When the total economic impacts associated with the animal agriculture sector are accounted for, including direct and secondary economic effects, the value of economic output associated with this sector is estimated to be $13.2 billion. Moreover, the total (direct and secondary) employment associated with the animal agriculture sector is estimated to be more than 76,600 jobs, mostly in rural communities and rural areas. The total value-added associated with the animal agriculture sector is estimated to be approximately $3.2 billion.

This review of the animal agriculture sector leads one to conclude that Nebraska’s livestock production has an enormous impact on Nebraska’s economy in terms of job creation, wealth creation (value-added) and total economic activity. It is important to recognize that data provided in this commentary relate only to the economic activity tied to the production of livestock and poultry and to the sectors that supply inputs to support this production (backward linkages).

Other important linkages for Nebraska’s animal agriculture sector are the forward linkages to the value-added meat and food processing industry, which is the largest segment of Nebraska manufacturing activity. Obviously, without the substantial production of livestock and livestock products by our agriculture sector, the food processing sector would not be as attracted to Nebraska locations.

With such a tremendously positive reverberating impact on the state’s economy, it makes sense to support responsible growth of the animal agriculture sector in Nebraska.

Donis Petersan and Ken Lemke are economists with the Nebraska Public Power District. They are based on Columbus, Neb.