Cornhusker Economics June 13, 2018Livestock Production Value and Economic Impact for Nebraska Counties

Livestock production provides a significant economic impact in Nebraska. In 2016, 56 percent of all agriculture commodity sales in Nebraska were attributed to livestock and the industry accounted for over 50 percent of agricultural commodity sales each year since the 2012. This article provides an analysis of livestock production value and corresponding direct economic impact per county. The analysis estimates the direct economic impact of livestock production is $8.5 billion and the total impact of livestock production in Nebraska is $13.8 billion.

To calculate the direct economic impact, 2016 livestock sales receipts were adjusted by subtracting livestock and poultry purchases. According to the 2016 USDA Economic Research Service (ERS) data, livestock sales receipts in Nebraska totaled $12.1 billion and livestock and poultry purchases totaled $3.67 billion. This data is the most recent and complete report available of statewide numbers.

However, the ERS data does not include a breakdown of receipts by county. The most recent county data is available from the 2012 U.S. Census of Agriculture report. The 2016 state totals were calculated using the proportion of state receipts reported by each county in 2012. The direct economic impact by county is shown in Table 1.

The livestock industry plays a role beyond its direct impact, adding to the total economic impact within the agricultural industry when taking into account crop producers, food processors, wholesalers, and transportation businesses. A 2012 University of Nebraska–Lincoln Department of Agricultural Economics report, “The 2010 Economic Impact of the Nebraska Agricultural Production Complex,” found that for each $1 in direct economic impact from livestock, an additional $0.62 in sales is generated outside the agriculture production complex. Using this multiplier, the total impact from livestock production across Nebraska equals $13.8 billion. Table 1 includes the total impact from livestock production by county.

In addition, the 2012 report stated that livestock production in Nebraska provides a significant employment impact with over 41,000 jobs directly related to it. The estimate of $13.8 billion is conservative in that it does not include these economic impacts in related sectors nor the wage income in those sectors, but it does clearly demonstrate the significance of the livestock sector to Nebraska agriculture and to each county in the state.

Forty-nine percent of all Nebraska farms and ranches are involved in some type of livestock or poultry enterprise. As of January 1, 2018, the state ranked first in the nation with cattle in feedlots with a capacity of more than 1,000 head. According to 2017 ERS data, Nebraska was first in commercial red meat production and second among all states in both cash receipts from all livestock and products and the number of raised cattle and calves.

Livestock production and sales are a significant part of the economy in a majority of Nebraska counties. Of the top ten Nebraska counties in overall agricultural sales, eight of those counties have over 60 percent of their agricultural sales from livestock sales and production (Table 2). Cuming County ranks number one in agricultural sales and 87 percent comes from livestock production activities, primarily cattle feeding. With a 62 percent multiplier added to show the impact of sales generated outside the agricultural complex, livestock production in Cuming County generates over $1.1 billion of economic impact.

Cattle and calves raised and cattle on feed make up nearly 90 percent of all livestock production value in Nebraska over the last decade. Cattle and calves sold totaled 86 percent of all livestock receipts in 2012 and 90 percent in 2016. Other livestock, including hog sales and poultry, lagged behind cattle considerably with just over $1.1 billion of the total livestock sales of $12 billion in 2016 (Table 3). Both receipts of hog and poultry sales declined from the 2012 Census of Agriculture to 2016, which may be due in part to lower hog prices and the fact that the avian influenza that hit Nebraska in 2015 affected poultry production numbers going into 2016. With potential for further expansion and recent contract grower opportunities opening up in Nebraska, it is anticipated that hog and poultry production could make up a larger share of livestock receipts in years to come.

Note

This study utilized the 2012 U.S. Census of Agriculture report of sales of livestock, poultry, and their products for each Nebraska county collected by NASS (available in online reports at agcensus.usda.gov or by query at quickstats.nass.usda.gov). The study also relied on annual cash receipts and value added for 2016 reported by ERS (available at ers.usda.gov/data-products/farm-income-and-wealth-statistics). Since 2016 data were only available at the state level, the 2016 state totals were prorated by county according to the proportion of state receipts reported by county in 2012. This methodology will not accurately reflect any changing trends in local production since 2012, but does provide insight into economic impacts of livestock production at the county level across Nebraska. Up-to-date detail at the county level should be available when the 2017 Census of Agriculture data now being collected is reported in early 2019, although certain data by species may still be unavailable due to limited responses or privacy disclosure limitations.

Sources:

U.S. Department of Agriculture, Economic Research Service. “Annual Cash Receipts by Commodity,” 2018, Washington, D.C.

U.S. Department of Agriculture, Economic Research Service. “Value Added to the U.S. Economy by the Agricultural Sector, 2010 – 2016,” 2018, Washington, D.C.

U.S. Department of Agriculture – National Agricultural Statistics Service, Census of Agriculture, 2012, Washington, D.C.

Nebraska Department of Agriculture, Nebraska Agriculture Fact Card, Feb. 2018, Lincoln, Nebraska.

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Glennis McClure
Associate Extension Educator
Department of Agricultural Economics
402-472-0661
gmcclure3@unl.edu

Bradley Lubben
Extension Associate Professor
Department of Agricultural Economics
blubben2@unl.edu