Agriculture and forestry are important industries in Alabama and a new study is helping quantify the impact. Alabama’s agriculture, forestry and related industries combine to create the state’s top industry by value of production and are the second-largest employer, according to a study released in February 2013 by Auburn University’s Department of Agricultural Economics and Rural Sociology and the Alabama Agribusiness Council.
“People are always speculating just how big Alabama agriculture’s impact is,” says Deacue Fields, Auburn University agricultural economist and the study’s lead author. “A study like this helps create an ‘apples-to-apples’ comparison between agriculture and other industries, and it creates a level basis for comparing the economic impacts from different sectors.”
The study reports the total output impact in Alabama from agriculture, forestry and related industries at $70.4 billion for 2010. There were 580,295 jobs impacted by those industries, including nearly 354,000 full and part-time workers directly employed, according to the study.
The largest agricultural sector in Alabama is poultry and egg production, accounting for 65.6 percent of agricultural sales reported in 2010. Cattle production contributed 8.4 percent of farm gate sales value, while the green industry (greenhouse, nursery and floriculture) made up 5.1 percent of agricultural product sales. The total $4.7 billion in agricultural product sales supported another $13 billion in total sales value of processed agricultural products.
The poultry industry’s economic impact is great because of the number of people employed by poultry processors. Statewide, about two additional jobs were created for every person employed in poultry processing in 2010, according to the study.
“That impact comes largely from the local economic activity in Alabama created as employees of poultry processors spend the dollars that they earn at the grocery store, at the car dealer, at all sorts of businesses that employ additional people,” Fields says.
Total sales from forest products and related sectors totaled $11.2 billion in 2010. That includes $1 billion in sales from forestry and commercial logging and $10 billion in total sales from forest products manufacturing. Economic impact from activities like hunting, sport-fishing and wildlife-watching were not counted in the study, but the U.S. Fish and Wildlife Service reports the impact of those activities in Alabama as $3.6 billion and 42,319 jobs in 2006.
More than Money
Fields notes that economic impact studies do not count for the value of social benefits from different industries – such as the ecosystem benefits from responsible land management or the beauty of good landscaping.
“The green industry has a number of entrepreneurs who employ a lot of people, but they also provide services that beautify the state,” he says. Such businesses also purchase inputs like plants, fuel and machinery from other Alabama firms.
Alabama businesses that provide inputs and materials to Alabama’s food and forestry industries – such as those supporting Alabama’s fishermen and seafood processors – also are important.
“Firms making crab traps and shrimp nets, as well as businesses supplying inputs to the freshwater aquaculture industry, definitely have an impact on the economy,” says LaDon Swann, Auburn Aquaculture Extension director in Mobile. “And there are many truck drivers employed to transport fish and shellfish to the retailers and the processors.”
The study was produced by Fields and Zhimei Guo, a postdoctoral research fellow in the Auburn department, and staff from the University of Florida Center for Economic Impact Analysis.
The work has already helped stimulate conversations from businesses, large and small, about expanding their presence in Alabama’s agricultural, forestry and related industries. “Alabama agriculture is a winner, and people are willing to invest in it,” says Fields.