The Economic Importance of North Carolina Animal Agriculture

Blake Brown and Kelly ZeringDepartment of Agricultural and Resource Economics

North Carolina State University

Animal Agriculture is a major component of North Carolina Agriculture…and the NC

economy

Agriculture and Foodis an Important Part of the Economy of

North Carolina

“Almost 17% or $71.6 billion of the $425 billion gross state product is contributed by food, fiber, and forestry industries”

“… 638,000 of the state’s 3.8 million employees”Source: Prof. M. Walden, NCSU

Source: NC Ag Statistics Yearbook 2011

… and Animal Ag is a Big Part of NC Ag2010 NC Cash Receipts from Farming

Tobacco 6.1%

Corn 3.7%

Soybeans 5.3%

Cotton 3.6%

Nursery, Greenhouse, Christmas Trees,.. 7.9%

Veg,. Fruit, nut, 5.4%

Pigs 23.2%

Broilers 27%

Turkeys 6.1%

Dairy 1.7%

Livestock, Poultry and Dairy 2/3 of all NC Farm Receipts

Eggs 3.4%Cattle 2.6%

Most NC Farms include Livestock and/or Poultry

NC had 52,913 farms in 2007

Non-family farms; 1,857 Very large fam-

ily farms; 4,114

Large family farms; 1,751

Small Family Farms; 45,191

Sales less than $250,000

Source: USDA-NASS

Animal Ag Across North Carolina(numbers of livestock)

Pigs

Cattle

Turkeys

Broilers

Source: NCDA Ag Stats 2011

Modern Broiler, Pig, Turkey and Egg Farms Represent Significant Capital Investment and Property Tax BaseAverage NC farm: 164 acres @ $4470 = $733,080,Broiler or turkey enterprise $400,000 to $900,000 and higherHog enterprise $175,000 to $3.2 million

Across NC, more than $1.5 billion in pig buildings, $2.5 Billion in broiler, turkey and layer buildings, …

Animal Agriculture supports other industries…and communities

Farm Production Supports Large Feed Mills and Poultry and Pork Processing Plants in North Carolina

Estimated capacity and investment in feed mills, hatcheries, and processing plants: $ 4.6 Billion

Animal Ag Creates Large Local Markets for North Carolina Crops

Corn and soybean meal and sometimes wheat are the main ingredients in animal feed. Feed makes up around 70% of the farm cost of animal ag.

A rough estimate is that Animal Ag in NC consumes 285 million bushels of corn/wheat and 3.3 million tons of soybean meal each year. These amounts are about 3X typical NC production

A major initiative is underway to increase NC grain production to enhance farmer income and reduce reliance on imports

Jobs, Jobs, Jobs, …Income, Income, Income, …. Tax Base

The poultry sector in NC generates 22,713 direct jobs plus 58,502 indirect jobs. It generates $7 billion in wholesale product sales and $18 billion in economic activity (private study for USDA/R. Ford)

The pork sector in NC generates 19,700 direct jobs plus 27,400 indirect jobs. It generates $2.34 billion in value added income (Zering 2010).

Animal Ag Includes Many Local Entrepreneurs Serving All Kinds of Markets

Exports of NC Agricultural Products ($million)

Animal Ag Stimulates Trade

“Current UN projections indicate that world population could increase by 2.25 billion people from today’s levels, reaching 9.15 billion by 2050. At the global level, agricultural production and consumption in 2050 are projected to be 60 percent higher than in 2005/07.”

Animal Agricultural will play a major role in the growing global demand

for food

Implications of 30% Growth in Global Population and 150% Growth in Global GDP

Meat Quantity Demanded increases by 100% by 2050 (e.g. FAO 2006 Livestock’s Long Shadow)

Feed Grain Quantity Demanded increases by 1 billion tonnes per year by 2030 (2.7 times US corn production) (e.g. FAO 2006 Livestock’s Long Shadow)

The U.S. is a Major Producer ofMeat and Eggs

2011 U.S. Share of Global Production(USDA FAS 2012 and FAO 2011)

Broiler Meat 20.7%Eggs 8.7%Pigs 10.1%Turkeys 48.8%

U.S. has 12.3% of global crop land area and less than 5% of global population (e.g. FAOSTAT 2011)

North Carolina is a Major Producer of Meat and Eggs

2010 NC Share of US Production (NASS /NCDA Ag Statistics)

Broilers (Mill.Head) 8.9%Eggs (Value of Prod) 5.0%Pigs (Inventory) 13.9%Turkeys 12.3%

NC has 0.9% of U.S. agricultural land area, 2.38% of U.S. farms, 3.1% of U.S. farm receipts and 3.06% of US population (e.g. NASS /NCDA Ag Statistics and US Census Feb 2011)

Technology Plays a Key Role in Global Agriculture.More discovery and innovation is needed to meet

the global challenge

Current Issue: Drought, Livestock Margins, Food Prices, Ethanol

Severe drought has reduced US corn production by 25% since planting with estimates at 10.8 billion bushels nationally. 4.5 billion bushels are projected to be used for ethanol production (WAOB USDA Aug 2012)

High feed prices are forcing animal agriculture producers to reduce production (layoffs, bankruptcies) which in turn is increasing food prices: USDA predicts 8% higher meat prices in 2013.

Animal Agriculture in North Carolina:

• is a major component of NC agriculture and a major contributor to our economy

Animal Agriculture in North Carolina:

• is a major component of NC agriculture and a major contributor to our economy

• supports many industries and jobs…from feed supply to processing final product

Animal Agriculture in North Carolina:

• is a major component of NC agriculture and a major contributor to our economy

• supports many industries and jobs…from feed supply to processing final product

• has a global presence and can have a significant role in feeding a growing world

How can we ensure that North Carolina Animal Agriculture continues to be a sustainable platform for economic growth and jobs in our communities?

Current global trends and food challenges provide great opportunity for North Carolina