Agricultural Economics Department
Date of this Version
6-2012
Citation
Department of Agricultural Economics June 2012 Report No.192
Abstract
Nebraska’s agricultural production complex is remarkable in both its sheer volume of production and its diversity. The state is a national leader in the production of major crop and livestock commodities. It is also home to major input industries tied to agriculture as well as sectors processing agricultural production into value-added products, all of which contribute to its economic significance. Moreover, the growth of the state’s agriculture over the past decade has been phenomenal. In 2010, total farm cash receipts exceeded $20 billion for the first time, essentially double the 2000 level. And while the nation’s economy was hit by the Great Recession followed by years of anemic recovery, this state’s economy has fared much better than most, in large part due to the prosperity within its agricultural sectors.
Given the above, this study was conducted to provide a benchmark assessment of the economic impact of Nebraska agriculture on the state’s economy, centering on the year, 2010, the most recent year for which comprehensive data is available. The focus is on the agricultural production complex which includes a set of industries closely involved in the growing, processing, and transportation of agricultural products. Included in this complex are: crop production, livestock production, agriculturally-related manufacturing (durable and non-durable), agriculturally-related transportation and wholesaling, agricultural-related research and education, and agri-tourism.
The economic model used for the analysis is the IMPLAN (Impact Analysis for Planning) model. This software program along with the data series just released for 2010, allow for a benchmark economic impact assessment of a particular sector as its activities ripple throughout the area economy. Measures of both direct and indirect economic benefits can be derived as point-in-time measures of a dynamic economy. Reliable economic measures of total effects attributed to a particular sector can be achieved which include: total dollar output (business receipts), gross state product (a value-added measure), labor income, and employment numbers.
Given the state’s geographic diversity of natural resource endowment, demographics, etc., the economic impacts of the agricultural production complex vary widely across Nebraska’s sub-state regions. Reflecting this fact, this study was expanded beyond the state level measures to also include analysis for eight sub-state regional economies. More refined geographic resolution is most valuable in assessing economic conditions by decision-makers in both the private and public sectors.