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1 KANDIYOHI COUNTY LIVESTOCK INDUSTRY ECONOMIC IMPACTS Prepared by: Agricultural Marketing Services Division Minnesota Department of Agriculture 90 West Plato Boulevard St. Paul, MN

2 KANDIYOHI COUNTY, MINNESOTA LIVESTOCK INDUSTRY ECONOMIC IMPACT Economic impact report prepared by: Su Ye Program Leader, Market Research Minnesota Department of Agriculture

3 TABLE OF CONTENTS I. Kandiyohi County Economic Profile... 3 Major Economic Sectors... 4 Largest Employers... 5 Domestic and Foreign Exports... 6 II. Kandiyohi County Livestock Industry... 7 Livestock Production... 7 Livestock Processing... 9 Livestock Exports III. Kandiyohi County Livestock Industry Economic Impacts Multipliers Output Multipliers Employment Multipliers Livestock Industry Output Impact Livestock Industry Employment Impact Tables and Charts Table-1: Output, Employment & Value-added by Sector... 4 Table-2: Kandiyohi County Largest Exporting Industries... 6 Table-3: Kandiyohi County Livestock Production Sectors... 7 Table-4: Kandiyohi County Livestock Processing Sectors... 9 Table-5: Kandiyohi County Livestock Exports Table-6: Output Impact for Livestock Sectors Table-7: Employment Impact for Livestock Sectors Table-8: Output Impact by Sector Table-9: Employment Impact by Sector Chart-1: Kandiyohi County Aggregated Industry Sectors... 3 Chart-2: Kandiyohi County Largest Industry Sectors... 4 Chart-3: Kandiyohi County Largest employers... 5 Chart-4: Changes: Number of Livestock Farms in Kandiyohi County... 8 Chart-5: Kandiyohi County Livestock Production Increases, Total Value... 8 Chart-6: Livestock Industry Output Impact Chart-7: Indirect Output Impact by Aggregated Sectors Chart-8: Livestock Industry Employment Impact Chart-9: Indirect & Induced Employment Impact by Aggregated Sectors

4 I. KANDIYOHI COUNTY ECONOMIC PROFILE General information (1995 IMPLAN data) Area: 796 square miles Population: 40,829 No. of Industries: 146 Total Industry Output $1,770 million Employment: 26,404 No. of Households: 15,659 Average Household Income: $51,136 Total Income: $801 million Agriculture (1997 Census of Agriculture data): Land in farms 378,831 acres Average farm size 335 Cash receipts $224 million Crop production 33% of total Livestock production 67% of total Chart-1: Kandiyohi County Aggregated Industry Sectors Construction 9% TCPU 6% Mining 0.11% Manufacturing 23% Government 9% Agriculture 11% Services 16% FIRE 11% Trade 15% Trade: Wholesale & retail trade. FIRE: Finance, Insurance, and Real Estate. TCPU: Transportation, Communication, and Public Utilities. 3

5 Kandiyohi County Major Economic Sectors The largest economic sectors in Kandiyohi County include agriculture production, construction, poultry processing, retail trade, health services, wholesale trade, real estate, industrial machinery, and banking. Table-1: Output, Employment, and Value-Added By Sector Output Employment Value-added* Industry Sector Million dollars Number of jobs Million dollars Agriculture 201 2, Construction 155 1, Poultry processing 150 1, Retail trade 137 4, Health services 133 2, Wholesale trade 124 1, Real estate Industrial machinery Banking All other , Total industry output 1,770 26, * Value added includes: employee compensation, proprietary income, property income, and indirect business taxes. Chart-2: Kandiyohi County Largest Industry Sectors (Output in Million Dollars) Banking Industrial machinery Real estate Wholesale Trade Health services Retail Trade Poultry Processing Construction Agriculture Million Dollars 4

6 Kandiyohi County Largest Employers The largest employer in Kandiyohi County is the agriculture sector, employing 2,115 people, approximately 8 percent of total employment in the county. Other largest employers include construction (1,784 jobs) and wholesale trade (1,352 jobs). Poultry processing is the 6th largest employer with 1,219 jobs, or 41 percent of all manufacturing industry jobs. Total employment in Kandiyohi County: 26,404 jobs. Chart-3: Kandiyohi County Largest Employers (# of Jobs) # of Jobs Agriculture 2,115 jobs 1,352 1,326 Poultry processing 1,219 jobs Agriculture Construction Wholesale trade Eating & drinking Poultry processing Miscellaneous retail Business services Transportation Banking Industrial machinery 5

7 Domestic and Foreign Exports Poultry processing is the largest exporting sector in Kandiyohi County, accounting for 18 percent of Kandiyohi County all exports (foreign and domestic). Foreign exports account for 14 percent of the county s total exports, while domestic exports account for 86 percent. The largest foreign export sector is crops, followed by industrial machinery and poultry processing. In domestic exports, poultry processing is also the largest exporting sector, followed by crops, livestock, banking, and prepared feeds. Kandiyohi s total foreign and domestic exports: $ million. Table-2: Kandiyohi County Largest Exporting Industries Million dollars Sector Total Exports Foreign Exports Domestic Exports Poultry processing Crops Livestock Banking Manufacturing Prepared feeds Transportation Wholesale trade Industrial machinery Abrasive products Food manufacturing Fabricated structural metal Chemical preparations Total

8 II. KANDIYOHI COUNTY LIVESTOCK INDUSTRY Kandiyohi County livestock industry includes both livestock production and processing. It is one of the most important economic sectors in Kandiyohi County. In 1995, the combined output value of livestock production and processing was $268 million, about 15 percent of Kandiyohi County s total industry output. Livestock Production Livestock production is a $116 million industry in Kandiyohi County. Kandiyohi County is the No. 2 livestock producer in Minnesota. Kandiyohi ranks No. 1 in turkey production and all poultry products in Minnesota. Total agricultural cash receipts was $223 million in 1997, of which, livestock contributed $151 million or 67%. Total livestock production increased 24% from 1987 to Poultry is the largest livestock sector, accounting for 70% of livestock income and 47% of total agricultural income. Livestock production provides 610 on-farm jobs. Table-3: Kandiyohi County Livestock Production Sectors (1995 IMPLAN data) Output Employment Value-Added Sector Million dollars Number of jobs Million dollars Poultry and Eggs Dairy Farm Products Hogs, Pigs and Swine Cattle Sheep, Lambs and Goats Miscellaneous Livestock Total Livestock

9 Livestock Farms The number of livestock farms decreased from 1987 to Hog farms endured the biggest declines, from 265 hog farms in 1987 to 102 in 1997, a -160% drop. Sheep farms experienced the smallest declines, from 40 farms to 38 farms, -5% drop. Chart-4: Changes: Number of Livestock Farms in Kandiyohi County Farm Number Cattle Dairy Hogs Sheep Poultry Source: Census of Agriculture. While the number of livestock farms decreased, livestock production has been steadily increasing during the past 20 years, at an annual average rate of 6%. Chart-5: Kandiyohi County Livestock Production Increases, Total Value $1, , , , , , , , ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Source: Minnesota Agricultural Statistics. 8

10 Livestock Processing Livestock processing is a $151 million industry in Kandiyohi County. Poultry processing and meat packing are the two livestock processing activities, with $150 million annual output in poultry processing and $1.09 million in meat packing. Poultry processing accounts for 75% of all food processing output. Livestock processing provides 1,222 direct jobs. Value-added income, including employee compensation, proprietary income, property income, and indirect business taxes, adds another $37.1 million to the Kandiyohi s economy. Table-4: Kandiyohi County Livestock Processing Sectors: Output Employment Value-Added Sector Million dollars Number of jobs Million dollars Poultry processing , Meat packing Total Livestock processing ,

11 Livestock Exports Livestock exports account for 23% of Kandiyohi County s all exports (foreign and domestic). Poultry processing is the largest livestock-exporting sector, followed by dairy farm products and hogs. Poultry processing is the largest foreign exporting sector; poultry & eggs come as a distant second. Domestic exports account for 93% of total exports. Total livestock exports: $167 million. Table-5: Kandiyohi Livestock Exports Domestic Foreign Total Exports Exports Exports Sectors $1,000 $1,000 $1,000 Poultry Processing $115,433 $11,265 $126,699 Dairy Farm Products $18,429 $30 $18,280 Hogs $14,345 $6 $14,351 Cattle $5,599 $37 $5,637 Poultry & Eggs $0 $875 $875 Sheep $732 $19 $751 Miscellaneous Livestock $13 $54 $68 Meat Packing $0 $65 $65 Total $154,372 $12,352 $166,724 10

12 III. KANDIYOHI COUNTY LIVESTOCK INDUSTRY ECONOMIC IMPACTS Multipliers Multipliers describe the response of the economy to an increase (or decrease) in production by a specific economic sector. Direct impact represents the response in production output of an industry. Indirect impact measures the response by all local industries affected by the increase in output due to purchases between industries. Induced impact represents the response by all local industries caused by the expenditures of new income generated by the direct and indirect impacts. Total impact is the sum of direct, indirect, and induced impacts. Output multipliers In the table below, output multipliers for dairy farm products show that for every million dollar increase in dairy output, the direct impact is $1 million, indirect impact is $0.3 million, induced impact is $0.01 million, and total impact is $1.40 million. Therefore, one million dollar increase in dairy production generates a total of $1.40 million for all industry sectors. Table-6: Output Impact for Livestock Sectors Based on $1 million change in output Direct Indirect Induced Total Sectors Impact Impact Impact Impact Production: Dairy Farm Products Poultry and Eggs Ranch Fed Cattle Range Fed Cattle Cattle Feedlots Sheep, Lambs and Goats Hogs, Pigs and Swine Miscellaneous Livestock Processing: Poultry Processing Meat Packing

13 Employment multipliers Employment multipliers represent the jobs that are generated by direct, indirect, induced and total impacts. In the table below, employment multipliers for dairy farm products show that for every million-dollar increase in dairy output, the direct impact is 4.7 jobs, indirect impact is 4.3 jobs, induced impact is 1.8 jobs, and total impact is 10.8 jobs. Therefore, one million dollar increase in dairy production generates a total of 11 jobs for all industry sectors. Table-7: Employment Impact for Livestock Sectors Based on $1 million change in output Direct Indirect Induced Total Sectors Impact Impact Impact Impact Production: Dairy Farm Products Poultry and Eggs Ranch Fed Cattle Range Fed Cattle Cattle Feedlots Sheep Hogs Miscellaneous Livestock Processing: Poultry Processing Meat Packing

14 Kandiyohi County Livestock Industry Output Impact Livestock is a $268 million industry in Kandiyohi County (direct impact). It also generates $165 million as indirect impact and $37 million as induced impact. The total impact (economic ripple effect ) of livestock production and processing in Kandiyohi County is $470 million annually. Chart-6: Livestock Industry Output Impact Million Dollars 500 $ $ $ $ Direct Indirect Induced Total The largest supporting sectors are agriculture, manufacturing, wholesale and retail trade, services, and transportation. The supporting sectors and spin-off industries generate indirect and induced impacts for livestock production and processing. Table-8: Output Impact by Sector Aggregated Sector Total Impact (Million Dollars) Agriculture Manufacturing Wholesale & retail trade Services Transportation, communication & public utilities (TCPU) Finance, insurance & real estate (FIRE) Construction 5.40 All other 1.42 Total

15 Kandiyohi County Livestock Industry Output Impact (Continued) Indirect output impact measures the output by all local industries that are affected by the livestock production and processing due to purchases between industries. Chart-7: Indirect Output Impact by Aggregated Sectors Million dollars Agirculture Manufacturing Trade TCPU Services FIRE Construction All other Trade: Wholesale & retail trade. FIRE: Finance, Insurance, and Real Estate. TCPU: Transportation, Communication, and Public Utilities. 14

16 Employment Impact Livestock industry provides 1,832 jobs in direct employment, including 610 in livestock production and 1,222 in livestock processing. Spin-off industries (such as transportation, wholesale trade, and services, etc.) employ an additional 2,213 workers. In total, Kandiyohi County livestock industry supports 4,046 jobs. Chart-8: Livestock Industry Employment Impact # of Jobs 4,500 4,036 4,000 3,500 3,000 2,500 2,000 1,832 1,501 1,500 1, Direct Indirect Induced Total Table-9: Employment Impact by Sector Aggregated Sector Total Impact (# of Jobs) Manufacturing 1,419 Agriculture 1,237 Wholesale & retail trade 557 Services 401 Transportation, communication & public utilities 137 (TCPU) Finance, insurance & real estate (FIRE) 95 Construction 77 All other 22 Total 4,036 15

17 Employment Impact (Continued) Indirect and induced employment impact on all sectors measures the employment by all local industries that are affected by the production of livestock industry. Chart-9: Indirect and Induced Employment Impact by Aggregated Sectors # of Jobs Agriculture Trade 185 Manufacturing Services 116 TCPU Construction 12 Indirect Induced FIRE All other Trade: Wholesale & retail trade. FIRE: Finance, Insurance, and Real Estate. TCPU: Transportation, Communication, and Public Utilities. 16

18 For more information, please contact: Su Ye Program Leader, Market Research Minnesota Department of Agriculture 90 West Plato Boulevard St. Paul, MN Tel: Fax:

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