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Study Shows Ripple Effect of Animal Ag

Published: Friday, May 19, 2017

New research examining the impact of growing Indiana's animal agriculture industries, funded by the Indiana Soybean Alliance, has shown that Indiana communities should consider animal agriculture as a strategic option when thinking about economic development.

The new regional economic study, conducted by the Indiana Business Research Center, Kelley School of Business at Indiana University, considers both the direct impact of animal agriculture as well as anticipated ripple, or multiplier, effects within economic systems.

As of the 2012 census, Indiana was home to nearly 21,200 animal agriculture operations combining to generate nearly $3.7 billion in sales.

"Indiana's hogs, cattle and poultry are an Indiana soybean farmer's best customers, consuming 95 percent of all soybean meal produced in the state each year," said Tom Griffiths, Indiana Soybean Alliance Chairman and farmer from Kendallville. "This study shows the livestock industry will continue to enhance and increase the value of our soybeans and will also support local communities across the state that choose to embrace the industry's growth."

Indiana is widely known as a major agriculture producer. According to the latest USDA Census of Agriculture, Indiana ranked among the nation's top 10 agricultural states with $11.2 billion in sales. Not only does Indiana boast vast fields of corn and soybeans, the state is home to every major category of animal agriculture.

This report examines hypothetical scenarios for the opening of new animal agriculture facilities, and looks at the economic effects that these scenarios would have in each Indiana region in terms of employment, income and total sales. Researchers conclude that growing these industries will boost the state's position among the nation's leaders and expand economic opportunity in Indiana.

The study found that a new hog farm with $2 million in direct sales can be expected to generate total sales impacts between $2.72 million to $3.15 million in Indiana's nine regions. This new economic activity will support between 24 and 28 total new jobs and an additional $508,000 to $795,000 in additional household income in each of these areas.

The research shows that expanding Indiana animal agriculture will generate significant economic ripple effects—what the Indiana Soybean Alliance calls the "Ag Effect."

These ripple effects are summarized in this new report by their industry multipliers. For example, the employment multiplier in the poultry industry is 7.39. This means that for every 100 employees directly involved in poultry and egg production, another 639 jobs in other industries are added to the state. Similarly, the sales multiplier in the dairy industry is 1.75 meaning every $1 of sales for an Indiana dairy producer generates an additional $0.75 in sales for other Indiana businesses.

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