Livestock Production Tied Closely to Per Capita Income

Adding livestock numbers to a county doesn’t just add animals and jobs. It adds real money to the bank accounts of people who live in that county.

“The Nebraska counties that have the highest percentage of livestock production tend to be about 10 percent higher than average in per-capita income,” said Ken Lemke, economist for Nebraska Public Power District. “For every 100 jobs in livestock production, there is a minimum of 30 to 100 additional jobs created within the county.”

Quoting a study by the Bureau of Business Research at the University of Nebraska-Lincoln, Lemke noted that the impact of livestock is pervasive across the state. “Even in Omaha and Lincoln metro areas, the agricultural complex in Nebraska accounts for 20 to 25 percent of the sales in employment. That percentage, of course, is even higher in other areas of the state,” he said.

“The purpose of economic development is to improve the lives of people living within the county or the area – and livestock production is definitely an economic development strategy for Nebraska,” Lemke said.

Nebraska's Livestock Friendly Counties

You’ve probably seen one of the signs as you cross a county line in Nebraska – welcoming you to a “Livestock Friendly County.” What does that mean anyway?

“It’s a way for a county to say that it’s open for business when it comes to livestock development,” said Steve Martin, ag promotion coordinator for the Nebraska Department of Agriculture.

 

“A lot of counties are starting to realize that, in attempting to control who comes into their county, they have limited the opportunities to producers who already live in the county – and in some cases, have driven them out,” Martin said. “The reality is that most of the growth we’re going to see is going to happen within the community.”

The impetus for Livestock Friendly designation must come from the counties themselves; the Nebraska Department of Agriculture does not “recruit” counties to apply for the program. In fact, some of Nebraska’s largest livestock-producing counties are not officially designated.

It’s a simple process, according to Martin. “A public hearing of the county board, supervisors or commissioners is held to discuss whether or not the make application for designation. If they resolve to apply, they submit the application and we evaluate it based on six main criteria,” he said.

The program is making a difference. “We are fortunate that two of the four counties we serve have received Livestock Friendly designation,” said Dave Behle, key accounts and economic development manager with Dawson Public Power in Lexington. “We’ve been able to get support from the elective bodies as they have seen the importance and positive impact of agriculture on their communities.”

Knox County saw immediate results when it achieved designation. “The day after we adopted our new regulations to become livestock friendly, two operations began working with me on applications to expand their feedlots,” noted Liz Doerr, Knox County zoning administrator. “We’ve focused on siting livestock operations in our primary ag district, while also protecting the lake and river areas that are critical to tourism in our area.”

 

“The program is not necessarily about making it easier to site new livestock facilities; it’s more about adding clarity and consistency to the process,” Martin said. “That process is still a public process, but there are clear zoning and permitting guidelines that officials can use to make a determination – and that producers can use to prepare a proposal that meets those standards.”

In Nebraska, Agriculture and Economic Development are the Same Thing.

Determine what you do best, and then find ways to do more of it.

That’s a pretty good formula for success, especially when it comes to economic development.

Agriculture – growing crops and raising animals – is what Nebraska does best. Agriculture accounts for more than $22 billion of the gross state product of Nebraska. More than one-fourth of Nebraska’s economy can be attributed to the ag production complex. Nebraska is among the national leaders in crop production, livestock production and biofuels.

Bottom Line: In Nebraska, Agriculture = Economic Development.

“Nebraska has a world-class agriculture system and that’s a clear advantage that we need to leverage in every way possible,” said Ken Lemke, economist for Nebraska Public Power District. “There’s no doubt in my mind that the best ag technology, the best livestock technology and the best producers in the world are in Nebraska, and we need to keep it that way.”

“The sheer volume of commodities we produce. A plentiful water supply. The reputation of our workforce. The fact that we’re within two days trucking distance of 90 percent of the nation’s population.  These are all Nebraska advantages that can help us leverage our state’s strength in agriculture production and processing for statewide economic vitality and growth,” said Courtney Dentlinger, director of the Nebraska Department of Economic Development.

 

As Nebraska looks for ways to generate economic vitality, increase its tax base, and retain young talent, there is no question that our strength in agriculture is an important foundation on which to build.

Removing our blinders to a global agricultural intensity

It’s so easy to look inward and focus on the issues we have going on in our lives: our work or business, family, responsibilities, volunteering – not to mention the economy and political environment in our country. We have demands drawing our attention in as many ways as cat to a laser pointer.

But let’s look at the bigger picture. Are our issues really that illustrious in the grand scheme of life when you look at everything going on around the globe?

It’s easy to look at the issues that face our agricultural economy domestically. But thinking bigger – globally – really brings a perspective that there is more to our industry and gives us a glimmer of hope. So many countries are experiencing food insecurity and we have the ability to provide food security.

With USDA’s recent crop production report showing a nearly 10 percent increase in corn production from last year, we are looking to have a record corn crop, if realized. This is huge for farmers – and a challenge albeit – but it means they are doing all they can, putting heart and soul and resources and technology into growing more food. It means abundant supplies and an even greater need for more markets on a global intensity.

So many people and organizations are expanding and empowering agriculture on a global level. The World Economic Forum has gathered and organized the Global Agenda Council to bring individuals and corporations together to address challenges like food security, sustainable consumption, and health and wellness.

Banks are offering special financing programs to help create jobs and boost agribusinesses across the globe.

The Gates Foundation is helping farming families all over the world produce more food and increase their income, while preserving the land for future generations.

The list goes on and on.

The middle classes of the world’s countries with the largest populations – India, China, Indonesia - are increasing. And as more their population rises to middle class, they can afford more protein. Just this fall, China removed a ban on shipments of some U.S. beef products, opening up the trade for the first time since 2003 as the country sees a surge in imports of the meat. This is excellent for our growing beef supply, but also our large corn supply. The more cattle we can feed here, the more beef we can export to places like China, Japan and South Korea. Beef exports had tremendous year-over-year growth in Japan (up 49 percent year-over-year) and South Korea (up 75 percent), according to the U.S. Meat Export Federation.

As U.S. farmers and ranchers, we have a challenge to meet the needs of our growing population. Thinking globally does not end with opening markets for U.S. agricultural products. It means collaborating with agribusinesses and food companies all over the world. Helping developing nations. Teaching new technology to farmers young and old. These opportunities are optimistic. Let’s remove our blinders, focus our attention outward, and think globally.

Limited Acres. Unlimited Opportunities.

Nebraska’s crop producers are among the most productive in the world, continually breaking yield records as they grow more corn, soybeans and other commodities with fewer and fewer inputs. The true opportunity for Nebraska’s economic future is to transform that abundance into added value.

“We only have so many available crop acres in the state, so the only way we can make significant gains in crop production is through continual improvements in yield, technology and innovation—and that is happening,” said Greg Ibach, director of the Nebraska Department of Agriculture. “But if we really want to create a new engine of wealth in our communities, we need to be talking about livestock expansion and value-added processing.”

Livestock expansion can be as simple as a farmer adding a hog or poultry barn on a pivot corner, an area of the field that typically does not produce high grain yields. A couple of those barns can generate enough income to support a son or daughter returning to the farm or be used as a strategy to mitigate risk.

“When you add livestock to a crop operation, you have two enterprises at work to determine farm profitability instead of just one,” Ibach added. “It adds diversity and improves the risk management and potential profitability for an individual farmer.”

Groups such as the Alliance for the Future of Agriculture in Nebraska (A-FAN), supported in part with Nebraska corn checkoff dollars, are working with farmers and ranchers to expand responsible livestock production in ways that are sustainable, environmentally sound and neighbor-friendly.

The Benefits of Ethanol Go Beyond Price

When you pull up to a fuel pump, you may notice that ethanol blends are friendlier to your wallet, but the benefits of ethanol go beyond your pocketbook. American Ethanol makes an important contribution to our environment, public health, economy and agricultural industry.

Public Health & Environment

Ethanol is a non-toxic, cleaner-burning octane booster that combusts fuel more completely in the engine. Higher blends of ethanol dilute the level of toxic additives in our fuel, which helps reduce pollution. This is good for our health and the environment!

Oil companies use a combination of toxic carcinogens known as BTX (benzene, toluene, xylene). These carcinogens don’t completely combust in the engine. As a result, fine and ultrafine particulates leave the tailpipe and enter the air we breathe. These particles are linked to serious health problems including asthma, lung and brain cancer, and heart disease.

As technology becomes more efficient, farmers produce more crops with less resources. This reduces our carbon footprint and our impact on the environment.

Today more energy is being produced from ethanol than is used to produce it, by factors of 2 to 1 nationally and by 4 to 1 in the Midwest, according to the 2015 Energy Balance for the Corn-Ethanol Industry done by the U.S. Department of Agriculture’s Office of the Chief Economist.

Economy & Agriculture

A recent study by University of Nebraska-Lincoln economists reveals Nebraska’s value of production for ethanol and dried distillers grain (DDGs) is approximately $5 billion annually.

Nebraskans grow and process their corn into ethanol within the state, which keeps more money in the local economy. Nebraska ethanol production results in a net positive of both ethanol and its co-products, which brings new money into the state economy.

The ethanol industry creates a substantial annual impact on the Nebraska labor market by supporting approximately 4,500 jobs with average annual earnings (wages, salaries and benefits) of $72,000. The average earnings include direct jobs in the ethanol industry as well as jobs throughout the state, which are primarily created in rural Nebraska.

Additionally, the increased use of ethanol helps reduce the need for agricultural subsidies — and America’s energy dollars will go to domestic producers rather than members of foreign oil cartels.

Make the CleanAir® Choice

When you fill up, consider the many benefits of ethanol:

• Renewable fuel made here in Nebraska

• Reduces toxic exhaust emissions, which reduces air pollution and its effect on human health

• Provides consumers a wider choice of high-quality fuels

• Lowers the cost of filling up at the pump

• Burns cleaner and cooler, helping extend engine life

Learn more about the benefits of American Ethanol at: americanethanolne.org 

This post was submitted by the Nebraska Ethanol Board. The Nebraska Corn Board and Nebraska Ethanol Board continue to work together to establish procedures and processes necessary to the manufacturing and marketing of ethanol fuel. 

Cattle, Corn and Co-Products – Feeding Cattle in Nebraska

Livestock is one of the corn grower’s most important customers, consuming more than 41 percent of all U.S. corn, including the supply of distillers grains, which are produced by corn ethanol plants.

In Nebraska, livestock production is the engine that powers the state’s economy. The multiplied impact of the $6.5 billion in cattle sales each year is $12.1 billion. Cattle-related employment means income for businesses up and down main street in towns and cities across the state. In short, the beef cattle industry has an unmistakable impact on other economies in Nebraska.

About 16 percent of the Nebraska’s corn crop is fed to livestock within Nebraska, with the bulk of that (more than 70 percent) going to beef cattle. See complete breakdown.

In total, though, about 40 percent of the corn grown in Nebraska is fed to livestock somewhere in the United States or around the world.

Another major user of corn is ethanol – but one-third of every bushel used in ethanol production comes back as distillers grain, an outstanding feed ingredient. Nebraska ethanol plants only use the starch portion of the kernel, returning the other components to the livestock industries as a high protein feed ingredient.

Nebraska has more than 5,000 feedyards willing to work with cow-calf producers interested in retaining ownership or partnering on their feeder cattle. They offer competitive feeding rations from the quality feedstuffs available in the state. You can can get an up-close view of the cattle feeding industry in Nebraska, thanks to this six minute video, “Consider the Possibilities – Cattle, Corn and Co-Products – Feeding Cattle in Nebraska,” Watch it and share this with your cow/calf friends considering where to send their calves!

Study Reveals Positive Economic Impacts of Nebraska’s Ethanol Industry

A recent impact study by University of Nebraska-Lincoln economists reveals Nebraska’s ethanol production capacity growth between 1995 and 2014 is tenfold. The results of the “Economic Impacts of the Ethanol Industry in Nebraska” study were released in March 2015.

The authors ­– Dr. Kathleen Brooks, UNL agricultural economics professor; Dr. Dennis Conley, UNL agricultural economics professor; Dr. Eric Thompson, UNL economics professor and Bureau of Business Research director; and Dr. Cory Walters, UNL agricultural economics professor – examined the economic impact of Nebraska’s ethanol industry during the last five years.

As of June 2014, Nebraska’s production capacity was 2,077 million gallons per year with 1,301 full-time employees at 24 facilities. During the past five years, Nebraska’s value of production for ethanol and dried distillers grain with solubles (DDGS) ranged from slightly less than $4 billion to more than $6.6 billion.

“The quantifiable economic impact of ethanol production on the Nebraska economy is clear,” said Paul Kenney, chairman of the Nebraska Ethanol Board. “But we should also understand the enormous savings in health and environmental costs associated with displacing toxic petroleum products with cleaner burning biofuels like ethanol. Choosing ethanol fuels brings additional cost savings in terms of our health.”

Nebraska’s large ethanol production results in 96 percent (1.805 billion gallons) being shipped out of state and makes Nebraska one of the largest exporters of bioenergy. In addition, 58 percent of DDGS produced in 2014 were shipped out of state. These out-of-state shipments result in a net positive for the state and represent a direct economic impact by bringing new money into the state economy.

The study noted that Nebraska’s ethanol industry could be affected by emerging trends and at least four are worth watching – the recovery of carbon dioxide (CO₂), the extraction of corn oil, and world export markets for both ethanol and DDGS. Many of these upcoming trends will be discussed later this week during the annual Ethanol 2015: Emerging Issues Forum in Omaha April 16-17.

“Canada imports 40 percent of the U.S. ethanol exports and China imports 39 percent of the U.S. distillers grains,” said Todd Sneller, Nebraska Ethanol Board administrator. “There is a strong demand throughout the world for ethanol and its co-products, so we continue to look for ways to expand the Nebraska market as well as international markets in an effort to bring more economic prosperity to Nebraska.”

The purpose of the “Economic Impacts of the Ethanol Industry in Nebraska” study was to estimate the value of production during five years and compare that value to major commodity production values in Nebraska. In addition, the study measured productive capacity, employment, net returns, in-state utilization and out-of-state shipments. To view the full study, click here.

A rocky or joyous road ahead in the ag economy?

Nebraska has always boasted that the State’s economy is strong because of agriculture. And it’s true.

The combination in the agricultural production complex involves crop and livestock production, agriculture-related manufacturing, agriculture-related transportation and wholesaling, agriculture-related research and education and agri-tourism. The jobs directly and indirectly involved in these production systems are great and have been growing in the past few years.

However, what does the agricultural economy look like for 2015?

In the latest long-term forecast released by the Bureau of Business Research at the University of Nebraska-Lincoln, Nebraska is depicted as a haven of steady growth in an uncertain world. Though the national economy likely will fluctuate, most Nebraskans can expect modest but steady economic growth during the next three years, economic forecasters say.

However, the state's grain farmers likely will see declining income as the agriculture sector rebalances from a record $8.4 billion income in 2013. Farm income dropped more than 36 percent in 2014, to about $5.3 billion, and is expected to continue to decline another 7 percent in 2015, leveling off at about $4.8 billion to $4.9 billion in 2016 and 2017.

On the other side, livestock producers recently have benefited from lower feed costs and record prices for their animals because of shortages caused by drought. Lower livestock prices will contribute to a 7 percent decline in farm income in 2015, thought the sector should stabilize at about $5 billion annual income in 2016 and 2017.

The state as a whole is predicted to add more than 32,000 jobs through 2017 -- a 1.1 percent annual increase. Many of the new jobs will come in the construction industry, with the forecasters predicting an upswing in new home construction, commercial construction and road construction – which do affect agriculture.

Nonfarm income is expected to grow by an average annual rate of about 3.9 percent, nearly double the rate of inflation. Recovery will be less robust in Nebraska, in part because declining farm income will limit rural job growth, but also because the state's small population creates less need and capacity for quick job growth. (Remember, Nebraska is one of the 10 states with ridiculously low unemployment.)

So where do you see Nebraska’s ag economy headed? Will it be a rocky road for grain farmers as prices remain low and supply high? Where will new markets lead us?

This is just one of the goals of the Nebraska Corn Board. We are committed to serving our industry in market development, research, education and promotion. We see the challenges that Nebraska corn farmers face. And we want to build more markets and expand on current ones to create more demand for our high quality corn and co-products. Learn more about what we are doing at NebraskaCorn.org.