"There is $1.939 billion in direct output from livestock
products to the Illinois economy each year and a total economic
impact of $3.173 billion," said Peter Goldsmith, an associate
professor of agribusiness and the Soybean Industry Endowed Chair
in Agricultural Strategy in the Department of Agricultural and
Consumer Economics.
"And these products contribute $256.78 million in taxes. The
state's 326 meat and dairy processing firms add another $10.069
billion in direct output products and $19.715 billion in total
economic impact. Together, the livestock products and meat and
dairy processing sectors provide the equivalent of 119,538
full-time jobs."
Goldsmith co-authored the report, "The Economic Impact of
Illinois's Livestock Industry," (available
online) with Durga Saripally, a research assistant in the
Department of Urban and Regional Planning. The research was
jointly funded by the Illinois Pork Producers Association and
the Illinois Livestock Development Group. [To download Adobe Acrobat Reader for
the PDF file, click
here.]
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"This report serves as a touchstone for industry,
stakeholders and policymakers to better understand the economic
role of livestock production and meat and dairy processing in
Illinois," Goldsmith explained.
"This industry is a significant provider of output, jobs,
taxes, exports from the state and markets for the state's grain
producers."
During the past 30 years, when compared with the rest of the
state's economy, the livestock sector has been in a steady
decline. However, beginning in 1999 through 2004 (the latest
year for which data is available), the decline stabilized and
has even shown growth in certain instances.
"Though the industry may not have grown as fast as other
sectors, livestock production and meat and dairy processing
still play an important role in the state's economy and can be
particularly important in certain regions," he noted.
For example, Clinton County, in southwestern Illinois, is the
leading livestock county; but Greene County, also in the
southwest, is the most dependent county, as the livestock sector
equals 15.3 percent of the county's personal income.
Illinois' ranking among the livestock-producing states has
generally slipped since 1995.
"But the state's swine herd is still the fourth-largest in
the country. There has actually been a 4 percent increase in hog
numbers in the state since 1999," said Goldsmith.
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"The dairy and beef herds are about the 25th-largest, and it
will be interesting to see if the wide availability of dried
distillers grains and solubles from the ethanol industry will
return those species back to Illinois."
In terms of economic impact, while hog operations account for
23 percent of the commercial livestock business in the state,
they contribute 55 percent of livestock's total cash receipts.
"The hog sector is the leading livestock species group, with
over $1.7 billion of total economic impact," said Goldsmith.
"Beef is about half of that, at $800 million, with dairy coming
in at almost $500 million."
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![](http://archives.lincolndailynews.com/2007/Jul/16/images/ads/current/lane%20ins%20lda%20062607.png) Beef production employs the most labor, with about 30 percent of
the industry total. Coming in second is the hog sector, directly
employing more than 6,000 full-time equivalents.
In 2004, Illinois exported 12 percent of its output from all
livestock sectors to other states. The poultry sector exported as
much as 80 percent of its output.
"Much of the demands of the state are being met by livestock
producers outside the state and outside the country," he noted.
"While at first glance this seems to portend great opportunities for
local producers, that conclusion would not be entirely correct.
"This is because the supply-demand matrix in the modern food
industry is not dominated, as it once was, by proximity. Technology
has advanced, and the manufacture and distribution of food has
changed."
Of the $257 million the state's livestock industry paid in taxes
in 2004, $122 million, or 47 percent, was state and local taxes. The
Clinton County livestock industry, for example, contributed over
$376,000 in the form of indirect business taxes for state and local
highways.
"This was 2.12 percent of the county's transportation revenue,"
Goldsmith said.
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The 116-page report concludes by noting that the real impact of
the livestock and meat and dairy processing sectors occurs at the
local level where livestock production or meat and dairy processing
have been part of the historical fabric of the community and are
significant contributors to the local economy.
"The potential growth of dried distiller grains, byproducts of
ethanol production, for use in livestock feed signifies real
opportunities for Illinois dairy and beef producers," Goldsmith
said. "Aggressive research programs are under way to help hog and
poultry producers integrate more dried distillers grains into their
feeding rations.
"Opportunities may exist for livestock operations to co-locate
with ethanol plants, or in regions heavily populated by ethanol
plants, to take advantage of low-cost feed supplies."
Meat and dairy processing, a $20 billion industry, serves as a
critical economic engine in many local communities, he added.
"Globalization of the agriculture economy not only allows for
expanded market opportunities for the state's meat and dairy
industry, but it also means there is greater out-of-state and
international competition," Goldsmith said. "As a result, Illinois'
business environment is critical to maintain and expand the state's
livestock and meat and dairy sectors.
"Understanding the comparative business environments would be
helpful to identify gaps, opportunities for new policies and ways to
market the state."
[Text from file received from
the University of
Illinois Extension]
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