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December 19, 2002
For More Information Contact :
Kent Thiesse, U of M Extension Service (507-389-8141)

Agriculture Still Important To Minnesota’s Economy

The food and agricultural industry remains an important part of Minnesota's economy, especially in rural areas. A new study by Bill Lazarus, Economist with the University of Minnesota Extension Service, found the state has 152,000 food and agricultural workers and 58,000 of them are directly involved in production for out-of-state markets. Lazarus says examples of jobs involving out-of-state sales include a canner in Sleepy Eye, a wheat farmer in the Red River Valley, a hog farmer in Rock County and a cereal manufacturing employee in Northfield.

Lazarus used IMPLAN (Impact Analysis for Planning System) to analyze data for 1999. IMPLAN is a widely accepted economic analysis and forecasting tool. The study is titled "How Big is Minnesota's Food and Agricultural Industry?" Here are some highlights:

• Minnesota had a strong trade surplus of $8 billion in food and agricultural exports in 1999.

• Counting both direct employment as well as secondary effects on input suppliers and household spending by agricultural workers, out-of-state exports by the food and agricultural industry account for 213,000 jobs. That's six percent of the state total.

• In addition to exports, the food and agricultural industry also sells to other Minnesota industries that would otherwise need to import to meet their needs. For example, Minnesota restaurants purchase more than $650 million worth of products from food and agricultural processors and producers.

• When Lazarus measured final sales for both export and in-state use, the total number of jobs created (both directly and indirectly) came to 350,000, or 11 percent of the state total.

• Outside of the seven-county metropolitan area, food and agriculture accounts for 17 percent of all jobs. On a regional basis, western Minnesota depends on food and agriculture for 28 percent of its employment. In southeastern Minnesota, the industry accounts for 20 percent of all jobs.

"The food and agricultural industry is crucial to the stability and vitality of Minnesota communities," Lazarus concludes.

The study is available on the Internet at http://agecon.lib.umn.edu/mn/p02-14.pdf.