Steve Deller, 2020 Contribution of Agriculture to the Wisconsin Economy


Good morning. A little bit better views from the work
that I’ve been doing. Many of you may know that every five years, I look at
how important is agriculture to the state’s economy. And I do that to coincide with the census of
agriculture because the census of agriculture is kind of our most comprehensive measure of
detailed economic data at the sub-state level. There is a full report, there are copies in some
of the fact sheets that are out there. So if you google contribution of agriculture in the Wisconsin economy, it will take you straight to this . At least, I’ve googled it so many times that it goes straight to it. Let me give you
kind of a summary here. Agriculture is a 105 billion dollar industry to the state’s economy. That’s an
increase over five years ago, which was about an $88 billion. We’re seeing
an increase in the contribution. Despite all the bad news in terms of what
happening in the production of agriculture , it is actually growing as part of the state’s
economy.Depending on how we want to measure, do we want to measure in terms of
jobs, do we want to measure it in terms of income or do we want to measure it in
terms of business sales. It’s about 11%-12% of the state’s economy. But,
if we break it down and we kind of look at it, in terms of whether or not we’re talking
about farm production, or are we talking about food processing, we get a little bit of a different picture. If we
look in terms of on-farm production, we’re looking at between three and
four percent of the state’s economy is coming from on farm production. That
number’s a little bit lower and primarily it’s a reflection of he tough times a lot of farmers are having right now. But if we look food processing, and when we think about food processing in Wisconsin, the first thing that should come to mind is dairy, is cheese production. But there’s a tremendous amount of different types of food processing
that’s taking place in the state. One of the fastest growing sectors is the
bakery industry for example. If we look here, your actually seeing that
much of the economic contribution of agriculture to the state’s economy is coming from the food processing sector. You can also see that there’s a lot of tax revenues that’s being generated by this. This is the state level taxes and
local level taxes– almost 3 billion dollars of revenue is being flowing to
state and local governments because of the economic activity generated from
agriculture. If we look at Dairy. Dairy is, we’re known as the dairy state, and dairy
is a about a little bit less than half of the total contribution.While we still pride ourselves as the dairy state, we do a lot more than simply dairy.
We have a lot of specialty crops. Dairy processing again is the major
contributor here and looking at that looking at dairy from both the production side
and also the processing side, is really, there are kind of two sides to the same coin.
So when we think about agriculture in Wisconsin, it’s really important we think a little
bit more about the processing side because it’s not so much what came first: Was it the dairy farmers or the cheese plants? Who cares? It’s an
irrelevant question. The thing is that’s they’re joined a the hip and they really need to
kind of work together and I think that’s been an important take away from this. The key here is
that the bulk of the growth and the contribution is coming between 2012 in
2017. It’s growth in the food processing sector. The other thing is that Wisconsin agriculture is extremely diverse. If you look across the state, there are some parts of Wisconsin that are highly dependent on agriculture. For
example, the southwest part of the state, almost 30 percent of economic activity is related
to agriculture. You go into the northern parts of the state and you would think that that’s primarily tourism and forestry. There’s still a lot of agricultural activity occurring throughout the state. Indeed, if you look at food processing, what one county has the highest level of food processing in the state of Wisconsin? It’s Milwaukee County. So, a lot of times when we think of agriculture, we think of it as a rural industry. But really, when we think of food processing, a lot of food processing is actually in urban areas. So, agriculture is not just a rural issue. It’s a statewide issue. Primarily because food processing is so important to the state’s economy. Now let me show you here how this has changed over time. The gross state product is adjusted to real 2016 dollars. You can see the blue line is the overall Wisconsin economy. And you can see farming is the kind of orange line in food processing is the grey one. You can see that agriculture, the performance there is not surprising. It’s kind of up and down. It’s kind of trending a bit through the farm crisis in the early 1980s You can see food processing, historically, has not been growing that much. But, what’s happened over the last, 7 or 8 years? We’re actually seeing a tremendous amount of growth in food processing. Consumers tastes and preferences are changing. We’re changing how we buy our food. We’re getting our food more from a processed component. Now you can talk about health issues and what not. But, increasingly, people are not preparing their own meals at home. They’re increasingly buying prepared meals and that is the growth sector in the state of Wisconsin in terms of the agricultural industry. If we look in terms of employment, we get very much the same kind of a picture. So rope here is in food processing. So what we would
like to do is kind of think about what is driving this growth in food processing and how can that trickle down and create better and create better markets for Wisconsin farmers?We need to broaden our discussion, broaden our thinking for agriculture beyond the farm gate.

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