Press Release

Animal Agriculture is Economic Engine for Illinois

August 12, 2012

BLOOMINGTON, ILL – August 13, 2012 – What was for dinner last night?  That chicken breast, hamburger, pork chop or ice cream strengthens the Illinois economy more than many realize.

In fact, raising livestock and poultry and processing meat and dairy products all contribute vital goods, jobs and tax revenue to the state of Illinois, according to a recent study by Peter Goldsmith, associate professor of agribusiness management at the University of Illinois.  The study was commissioned by the Illinois Livestock Development Group (ILDG), which receives funding from the Illinois soybean checkoff.

"The livestock and meat and dairy processing complex is one of the most important and least appreciated industries in the state," says Goldsmith.  "With other economic sectors declining, meat consumption rising globally and strong existing in-state demand, this complex offers excellent growth potential."

Together, the industries comprise five percent of the state's economy, or $1 out of every $20. Illinois is home to more than 30,000 livestock farms and a couple hundred processing companies that employ 99,000 people, according to Goldsmith's research.

"When you look at inputs purchased, goods sold and economic activity generated by profits and wages, livestock production and processing creates a $27 billion impact in Illinois," Goldsmith says.  "That is significant.  And, the impact of this industry has increased 28 percent, or $6 billion, since 2004.  The trend also shows modest growth in the real value of products sold, something not all Illinois industries can claim."

Goldsmith believes one of the industry's greatest advantages is the value livestock farms bring to local communities.  The industry has an output multiplier of 1.98, meaning that for every $100 of direct output or sales, another $98 is created outside the industry.  Many of those additional dollars stay local because of the nature of farming.

The potential such economic value offers is one reason El Paso, Ill., farmer Rob Shaffer encourages crop farmers and communities to welcome animal agriculture expansion.

"Livestock are the top consumers for Illinois soybeans," says Shaffer, who serves as treasurer for the Illinois Soybean Association (ISA) and is also president of ILDG.  "Half of the soybeans we raise feed domestic livestock.  We are integral to raising high-quality meat.  Local animal farms expand our market."

According to Goldsmith's research estimates, a 2,400-sow, farrow-to-finish enterprise would ultimately create nearly $9 million in total economic activity.  It also would contribute $851,000 in taxes.  That is about the same amount of taxes generated by building nine new single-family homes, according to National Association of Home Building (NAHB) estimates.  Often this work is divided among several farms, spreading out the costs and benefits.

"Hogs represent more than half the livestock in Illinois and provide more than 10,000 jobs," Shaffer explains.  "Since 2000, pork production has been increasing in Illinois, but at only half the rate of the national average.  Plenty of potential for expansion exists.  Growth would bolster the rural Illinois economy."

Beef cattle make up another quarter of Illinois livestock.  Goldsmith's research estimates that a 2,400-head feeder farm would create about $2.4 million in revenue, just more than the estimated local income from the annual recurring impact of 100 rental apartments in a metro area, according to NAHB estimates.  In addition, a 400-cow dairy would generate more than $1 million in sales and roughly twice that in economic activity.

"Such farms cause far-reaching ripple effects.  For example, feed is a primary cost for raising animals, so corn and soybean farmers have strong local demand," Goldsmith says.

Shaffer agrees.  "Grain farmers should understand the value of livestock to the state as a whole. Thriving livestock farms ensure a market for commodities.  When existing operations want to expand, their crop-focused neighbors should support that growth."

Goldsmith believes the value of livestock expansion can be seen downstream as well.  "On the other side of the supply chain, having a strong processing industry improves the prices farmers receive," he explains.  "Meat packing companies in Cook County and the Quad Cities area represent valuable capital investments in Illinois."

With a large population, Illinois has significant demand for meat and dairy products.  Illinois processing plants are relatively close to their end markets.  But Goldsmith's analysis found that Illinois processors import about 75 percent of raw materials from other states.  He sees that as one reason for potential future growth in raising livestock in Illinois.  Proximity to additional raw materials would trim transportation costs and provide more stability for those businesses.

"Illinois livestock provides a substantial supply base, but protecting and increasing that base incentivizes processers to remain in the state," Goldsmith explains.  "Good industrial policy is also good livestock policy, and vice versa.  A favorable business environment for both processors and animal agriculture in Illinois will ensure the future of this important chunk of our economy."

The Illinois Soybean Association (ISA) is the statewide organization for Illinois soybean growers.  The farmers on its board administer soybean checkoff funds to support research, promotions, and educational programs designed to increase demand for Illinois soybeans and administer legislation and membership programs.  For more information, visit: www.ilsoy.org.

 

-30-

For more information, contact:
Amy Roady
roadya@ilsoy.org
309-808-3610
309-663-7692
618-535-7937

Laura Temple
ltemple@morganmyers.com
847-436-3525