Feed Bites

Economic Contribution? Or Impact of the Feed Industry?

Written by: Sarah Novak   |   April 27, 2021

Economies, IFEEDER

As Benjamin Franklin once said, “Nothing can be said to be certain, except death and taxes.” We knew the U.S. animal food industry paid taxes – but we just didn’t know how much of an impression on the economy it had, until the Institute for Feed Education and Research commissioned a report on the animal feed industry’s economic contribution in 2016.  

What we found was that not only does the animal food industry feed America’s livestock and pets, but it also contributes significantly to the economy in terms of sales of products, purchases of goods and services, and employment of people and taxes!  

So, when I saw that Auburn University, Alabama A&M and the Alabama Cooperative Extension System published a report on the economic impact of adding just one new poultry feed mill that manufactures 520,000 tons of feed a year to Alabama’s economy, I wondered how it would compare to what IFEEDER discovered. 

From the IFEEDER report, the Alabama animal food industry contributed to the state economy: 

  • $5.8 billion in total sales (animal feed and pet food) 

  • Of which $1.7 billion is considered value-added (sales minus the cost of inputs) 

  • 16,972 jobs 

  • $353.04 million in taxes (paid to local, state and federal levels by all directly and indirectly affected industries) 

What is interesting about the Alabama organizations’ data is that they report not only on the impact once the mill is running, but also the impact during construction. Their data show that the impact of one, new feed mill is:  

  • $207 million in sales ($51.5 million during construction) 

  • Of which $42.3 million is considered value-added ($25.7 million during construction) 

  • 499 jobs each year (398 during construction) 

  • $5.4 million in taxes ($8.5 million during construction) 

When comparing the Alabama study to the IFEEDER study, it turns out these numbers can’t simply be compared – the key word is “contribution” versus “impact.” The difference between the two is one, “contribution,” looks at what an industry (or group of industries) contributes currently to the local (as defined) economy while the other, “impact,” looks at what the change would be if a business expanded/contracted or entered/left a local economy. 

Bottom-line: whether you are looking at the animal food industry’s economic contribution or the industry’s impact, the animal food industry creates tons of jobs, pays millions of dollars in taxes and supports rural America. 

I invite you to look at the economic contribution the industry makes in your state using our interactive tool here

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