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Food and agriculture form a cornerstone of Minnesota’s economy

As the second-largest industry in Minnesota, agriculture serves as the cornerstone of our state’s economy, creating jobs, generating business and supporting other industries.

As the second-largest industry in Minnesota, agriculture serves as the cornerstone of our state’s economy, creating jobs, generating business and supporting other industries. Since this week has been designated National Ag Week, it’s a good time to underscore the role and contributions that the food/agriculture industry plays in Minnesota’s economy. 

When people think of “agriculture,” it’s not uncommon for them to imagine fields lined with rows of corn or a red barn full of dairy cattle. But while Minnesota’s agriculture is rooted in its 80,000-plus farms, the industry is much broader than solely production agriculture. It’s an extensive industry that provides jobs and business revenue into both our state’s small towns and metropolitan centers, producing products and services that travel across state and national borders.

The foundation of the industry is its producers. According to the 2007 U.S. Census of Agriculture, our Minnesota farms generated $13.2 billion (market value) in agricultural products, with 53 percent in crops, vegetables, nursery crops and other related crops, and 47 percent in livestock, livestock products and poultry. Together these farms help Minnesota rank as the seventh top agricultural producing state in the nation.

Food, goods and energy
After the farm gate, Minnesota’s food and agriculture industry reaches out as an expansive chain of manufactures and service providers that transform and deliver agricultural commodities into food for families, fiber for our clothing and other durable goods, and energy to fuel vehicles and provide electricity to power our homes and businesses. The diverse scope of our state’s food and agriculture industry is truly impressive as it touches farm supply co-ops, marketers, financial institutions, food processors, research and development, transportation, grocery stores, law firms and other connected industries.

Right in our metropolitan areas, Minnesota’s food and agriculture industry is buzzing. Our state is home to a number of Fortune 500 companies, which include businesses tied to the food and agriculture industry, such as Supervalu in Eden Prairie (No. 62), CHS in Inver Grove Heights (No. 145), General Mills in Minneapolis (No. 214), Land O’Lakes in Arden Hills (No. 294), Hormel Foods in Austin (No. 390), The Mosaic Co. in Plymouth (No. 422), and Ecolab in St. Paul (No. 438).  Together these Minnesota businesses generated $93.4 billion in 2008, according to Fortune Magazine’s Fortune 1,000 listing. This ranking doesn’t include Minnesota-based Cargill (Minneapolis), which is a major industry player. The privately held company reported $120.4 billion in revenue for its 2008 fiscal year.

And the economic impact of these companies? Our food and agriculture industry provides 367,000 jobs when considering the “multiplier effect” that agricultural production and processing supports, according to the Minnesota Department of Agriculture (MDA). Specifically the industry accounts for 15 percent of all Minnesota jobs, while agricultural-related employment accounts for 24 percent of rural jobs and 13 percent of metro jobs. Of these agricultural jobs, more than 80 percent are off-the-farm, in processing, distribution, supply and service sectors, according to MDA data.

Over $3 billion in exports
Our state’s food and agriculture industry is also very much a global business. Food and agricultural products are the second most exported goods from Minnesota, accounting for 20 percent of our state’s exports, falling right behind computers and electronics, according to MDA data. Our state’s grains and livestock products reach foreign markets in Mexico, Japan, China, Canada, Korea, Taiwan and other countries. From a national perspective, Minnesota is the seventh-largest agricultural exporting state, with an estimated $3.58 billion in exports in 2007 (4.4 percent of total U.S. agricultural exports).

While National Ag Week is only the span of a few days, it gives us a chance to celebrate — and to reflect on just how effective Minnesota’s food and agriculture industry is in providing jobs and generating business.

Daryn McBeth is the president of the Minnesota Agri-Growth Council, a nonprofit, nonpartisan advocacy organization representing state’s food and agriculture industry, including producers, associations and businesses of all sizes.