Copyright © University of Minnesota. All Rights Reserved Measuring the Economic Impact of the Minnesota Livestock Industry Gary A. Hachfeld, Brigid Tuck, David Nelson, Al Brudelie National Farm Business Management Conference June 13-17, 2010 Fargo, North Dakota

Copyright © University of Minnesota. All Rights Reserved Presentation Outline Rationale for the study Data base of information for the study Analysis process Study Assumptions Results of study

Copyright © University of Minnesota. All Rights Reserved Study Rationale Livestock production In Minnesota generates billions of dollars in revenue & many jobs. Production years 2007, 2008 and 2009 were financially stressful for the MN livestock industry. Question: What would the economic impact be to MN, if the state lost 10%, 20% or 30% of it’s livestock industry?

Copyright © University of Minnesota. All Rights Reserved Study Data Base All livestock direct and overhead expenses as well as production levels, are from the Minnesota State Colleges & Universities (MnSCU) and University of Minnesota Extension Adult Farm Management Program data. Study years included 2004 through 2008 data.

Copyright © University of Minnesota. All Rights Reserved Study Data Base Livestock enterprises included in the study were as follows: Dairy Dairy Finishing Hogs – Wean to Finish Hogs – Finish Feeder Pigs Beef Cow-Calf Beef Finishing

Copyright © University of Minnesota. All Rights Reserved Analysis Process Utilized Impact Analysis for Planning (IMPLAN) software to analyze livestock farm business expenditures. IMPLAN software is a very commonly used input-output economic modeling analysis software.

Copyright © University of Minnesota. All Rights Reserved Study Assumptions Study focused on economic impact from expense side of the livestock business. Direct & overhead expenses from MnSCU and U of M Extension data used in the study, were representative of other Minnesota livestock farm businesses. Total number of MN livestock farms calculated utilizing MN Agricultural Statistical data.

Copyright © University of Minnesota. All Rights Reserved Study Assumptions Most major livestock production inputs were purchased locally within Minnesota. Assumed return to labor and management income was spent in a manner identical to any non-farm wages or income.

Copyright © University of Minnesota. All Rights Reserved Study Assumptions Estimated labor hours per unit were 2080 hours which equaled one labor unit or one full-time job. Dollars were not adjusted for inflation. Assumed IMPLAN software was an appropriate and applicable software for this economic analysis.

Copyright © University of Minnesota. All Rights Reserved Study Results

Total Livestock Production Inputs Purchased by Enterprise by Year

Hogs - Wean to Finish$2.40$2.70$2.30 Hogs - Farrow to Finish$2.60 Dairy$2.50 Dairy - Finishing$2.50 Beef Cow - Calf$2.50 Beef Finishing$2.50 Local Economic Impact per Livestock Farm Dollar Spent

Non-Farm Ag Business Economic Impact

Family Living Expenditures/Community Economic Impact

Total Economic Impact of MN Livestock Industry

Hogs - Wean to Finish Hogs - Farrow to Finish Dairy Dairy - Finishing Beef Cow - Calf Beef Finishing Local Non-farm Jobs Created per Livestock Farm Job

Total Jobs Created by Enterprise by Year

Copyright © University of Minnesota. All Rights Reserved Summary For MN livestock production years : Average annual total economic impact of livestock production was $9.96 billion dollars. Average annual non-farm ag related business economic impact was $5.78 billion dollars. Average annual non-ag business economic impact was $213 million dollars. Average number of non-farm jobs created per year in MN was 61,956.

Summary Percent of Loss10%20%30% Total Economic Impact$996.2 mil.$1.99 bil.$2.99 bil. Non-farm Ag Related Businesses $577.8 mil.$1.16 bil.$1.73 bil. Non-ag Related Businesses$21.3 mil.$42.6 mil.$63.9 mil. Job Loss6,19612,39118,587 Economic Result of a 10%, 20% or 30% Loss of MN Livestock Producers

Copyright © University of Minnesota. All Rights Reserved Acknowledgements Brigid Tuck -Extension Educator, Community Economic Analyst/Writer, U of M Extension. Al Brudelie, Dean of Management Education, MnSCU MnSCU & U of M Extension Adult Farm Management Programs MN Agricultural Statistics Service

Copyright © University of Minnesota. All Rights Reserved Contact Information Gary A. Hachfeld Extension Educator Agricultural Business Management University of Minnesota Extension

Copyright © University of Minnesota. All Rights Reserved Thank you ! Questions - Comments