The greater Omaha and Lincoln area is Nebraska’s leading region when tabulating the total dollar impact of agriculture to the economy, according to a new report from the University of Nebraska-Lincoln.
Nebraska’s robust agricultural economy accounts for $8.36 billion in gross regional product in a 15-county area of eastern Nebraska that also includes cities from Central City to Blair and Aurora to Plattsmouth.
The report used statistics from 2010 to paint a picture of the prowess of the state’s ag-based economy.
Agriculture and related industries represent about one-fourth of Nebraska’s total economy — a percentage share that’s unmatched anywhere except South Dakota, said Bruce Johnson, a UNL agricultural economist and an author of the report.
While much of the impact in the east region is due to the large agriculture-related manufacturing industry, it’s notable that the economic impact of crop production — more than $2 billion — is larger in the east than in any other region, Johnson said.
One of every seven jobs in the Omaha-dominated east region is tied to agriculture.
“We can’t sneeze at it in any way,’’ Johnson said Tuesday.
Nebraska is blessed with a “profoundly significant and diverse agricultural production complex” that gives the state great economic momentum as a leader in the expanding global food economy, according the report.
Nebraska agriculture has moved significantly from a commodity economy to an agricultural product economy, the report says.
For example, only one-third of the state’s corn crop is exported from the state. The rest is processed through livestock and ethanol production and exported as food, fuel and related products. This value-added activity boosts employment and earnings across the state, Johnson said.
The study focused on what the authors defined as Nebraska’s “agricultural production complex.’’ It is the set of industries closely involved in the growing, processing and transportation of agricultural products. Included are crop and livestock production, agriculture-related manufacturing, agriculture-related transportation and wholesaling, agriculture-related research and education and agri-tourism.
“Production agriculture is not about only what happens on the farm, it’s everything that it takes to get agriculture products exported into the economy,” Johnson said.
Unlike some studies, the UNL report did not include grocers, restaurants and their employees as part of the agriculture and food industry.
Some of the direct and indirect statistics combined, and their percentage share of Nebraska’s total economy in 2010:
— Total sales volume: $68.88 billion, 41 percent.
— Total gross state product: $22.64 billion, 27 percent
— Employment: 289,200 jobs, 24 percent.
— Total wages and proprietor’s income: $13.67 billion, 25 percent.
The role of agricultural activity in the economy varies by region.
Northeast Nebraska’s crop and livestock production and considerable ag-related production and processing accounted for a state-leading 81 percent of the production output and 63 percent of the gross regional product, while employing 51 percent of the region’s workforce and producing 66 percent of its labor income.
The 13-county region includes the cities of Albion, Neligh, Norfolk, Oakland, South Sioux City and West Point.
Agriculture’s prominence also was high in the other regional economies across the state.
“We knew we’re an ag state, but this detailed lens shows how clearly significant it is,’’ Johnson said.
The report noted that Nebraska’s agricultural producers and manufacturers long have been known as innovative users of the latest technologies and management techniques that provide an edge in international trade and create a solid foundation for the statewide economy.
This was never clearer than during the recent Great Recession, when the export strength of Nebraska agriculture helped the state stave off the worst effects of the downturn, Johnson said.
Johnson cautioned that not every year on the farm is better than the one before. Economic downturns in agriculture are inevitable and their impact will be magnified in Nebraska. In fact, the report says, economic volatility in agriculture is likely to increase.
The report predicts continued growth for Nebraska’s ag production complex, with exports likely to grow to China, India and elsewhere in Asia and Latin America. They also predict more growth in food processing, agriculture-oriented manufacturers, biotechnology companies and transportation.
“Overall, Nebraska is positioned, like few other areas of the country, to capitalize on the strength of its agricultural production complex,” the report says.
“The 2010 Economic Impact of the Nebraska Agricultural Production Complex” was written by Eric Thompson from the UNL Bureau of Business Research, and Anil Giri and Johnson from UNL’s Agricultural Economics Department.
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