The Emerging Role of Agriculture in Economic Development Rex Ricketts, Director University of Missouri Extension Commercial Agriculture Program Commercial Agriculture Program 1

Overview Importance of Missouri's Agriculture Historical Changes in Agriculture Tractor Electricity Trailer Truck Economic Impact of Animal Production 2

Missouri Agriculture 2006 $5.62 billion in farm receipts 55% livestock 45% crops Missouri ranks 2nd in the US in the number of farms 105,000 farms Source: USDA-NASS 3

Missouri Livestock Receipts - 2005 $3.1 billion Source: USDA-NASS 4

What technology has changed agriculture the most? Tractor Electricity Trailer Truck Bio Fuels 5

Number of U.S. Farms Source: USDA-NASS 6

Number of U.S. Tractors Source: USDA-NASS 7

Number of U.S. Farms with Electricity Note: The use of electricity on farms after 1954 was so widespread throughout the states that there seemed no need to obtain further information Source: USDA-NASS 8

Number of U.S. Tractors, Farms and Farms with Electricity Thousands of Farms 9

Trailer Trucks 10

One Trailer of Market Hogs 53,000 lbs. live weight 200 hogs 10,000 pork chops 11

One Trailer of Milk 50,000 lbs. of milk 5,813 gallons of milk 93,000 8 oz. glasses of milk 5,000 lbs. of cheese 12

600 Sow Farrow to Finish (25-ton Truck Lots) Weekly Annual Market Hogs 2 104 Corn 3.7 194 Soybean Meal 1.1 58 Supplement 0.12 6 Total 6.9 362 13

700-cow Dairy (25-ton Truck Lots) Weekly Annual Milk 7 365 Feedstuffs (includes Corn Silage, Alfalfa Silage, Alfalfa Hay, Grass Hay, Corn, Soybean Meal, Cotton Seed and Mineral/Vitamins 10.5 507 Total 17.5 872 14

Economic Impact of Animal Agriculture 15

2,400-head Contract Finishing Unit Swine Construction Economic Impact Construction Cost = $520,000 (includes buildings, manure storage and water supply) Overall construction project cost will be $520,000. These costs represent investments in construction of buildings, manure storage and water supply. A significant portion of these dollars will be spent locally for contractors, specialized labor, and building supplies for constructing the operation. 16

2,400-head Contract Finishing Unit Farm level annual economic impact $122,000 in gross revenue to swine operation including contract payments and manure value $3,500 spent on real estate and property taxes $5,000 spent on utilities 500 acres needed for feed (corn) 320 acres for manure application in corn soybean rotation $50 per acre fertilizer value $207,000 in annual economic activity state wide (multiplier effect) 17

700-cow Dairy Operation Dairy Construction Economic Impact Construction Cost = $2,483,000 (includes milking parlor, freestall barn, holding area, bunker silo, manure storage and water supply) Dairy machinery needed = $250,000 Overall construction cost will be $2,483,000. These costs represent investments in construction of a milking parlor, freestall barn, holding area, bunker silo, manure storage and water supply. Additionally, at least $250,000 worth of machinery will be purchased for the dairy operation. A significant portion of these dollars will be spent locally for contractors, specialized labor, building supplies for constructing the dairy and for purchasing equipment. 18

700-cow Dairy Operation Farm Level Annual Economic Impact $2.4 million in gross revenue to dairy $6.0 million in economic activity (multiplier effect) $10,000 spent on real estate and property taxes $60,000 spent on utilities, fuel and oil 11 full-time positions created ($260,000 in labor expenses) 1,466 acres needed for feed (corn silage, alfalfa, etc.) At least 1,626 acres needed for nutrient management $32 to $56 per acre fertilizer value The dairy will generate at least $2.4 million in gross revenue per year for over the next 20 or more years An estimated six million dollars in economic activity will be generated annually in the state due to the multiplier effect of the annual expenditures of the dairy. Most of that economic activity will be generated in the surrounding rural area. For every dollar spent by the dairy, approximately $2.50 in business purchases and wages are created in the state’s economy. The dairy will generate $10,000 per year in real estate and property taxes. The dairy will spend $10,000 per year in insurance fees The dairy will spend $60,000 per year in utilities, fuel and oil The dairy will provide direct employment to 11 full-time positions such as a dairy manager, herdsman, milkers, feeders and others. Total labor expenses including benefits for the dairy operation will be $260,000. Indirect jobs in the community supported by dairy operation include: equipment repair and maintenance, insurance, banking, custom manure hauling, dairy supplies, and veterinary services. The dairy will provide local crop producers with a new market for their crops; total crop acreage needed for the dairy will be 1,466 acres. Corn silage, alfalfa silage, alfalfa hay, grass hay and corn will be needed to supply feed to the dairy. Nutrient management from the dairy will help local landowners save $19 - $73 per acre in reduced fertility costs by the use of dairy manure. A minimum of 1,626 acres will be needed for accepting manure 19

Multiplier Effect of Missouri’s Livestock Sector 2005 Cash Receipts Additional Impact Total -- Millions of dollars -- Beef 1.2 1.1 2.3 Poultry 971 ? Pigs 616 484 Dairy 298 631 929 20

Biofuels Industry 21

Annual Operation Impacts of the Four Ethanol plants (160 MGY) Category Direct Indirect Induced Total Employment (jobs) 161 2,146 715 3,022 Labor income (million dollars) $20 $73 $27 $121 Value added (million dollars) $36 $130 $50 $215 Net total output (million dollars) $285 $192 $45 $522 Tax revenues at the federal, state and local level - $43 million Corn Used in Production – 56 million bushels Golden Triangle Energy, LLC. Craig, Missouri 22

Yearly Operating Expenses for Ethanol Plants Purchases Current Production 500 MGY 800 MGY Corn $126 million $592 million $942 million Natural gas $40 million $132 million $212 million Electricity $5 million $17 million $27 million Enzymes and chemicals $15 million $50 million $82 million Repairs and maintenance $6 million $19 million $31 million Labor $8 million $28 million $45 million Water $2 million $10 million Depreciation $14 million $43 million $70 million Other $24 million $75 million $120 million Total operating expenses $241 million $961 million $1.5 billion 23

Why agriculture has changed Conclusions Why agriculture has changed Animal agriculture is an important economic contributor to Missouri’s economy Animal agriculture faces new opportunities and challenges with the growing biofuels industry 24

The Emerging Role of Agriculture in Economic Development Rex Ricketts, Director University of Missouri Extension Commercial Agriculture Program Commercial Agriculture Program 25