Commentary: Agricultural jobs boost economies of state, nation


Issue Date: April 3, 2019
By John Newton and Michael Nepveux
California leads the nation with 2.8 million jobs directly tied to food and agriculture. About 11 percent of the nation’s food and agricultural jobs occur on the farm, with the rest in sectors including manufacturing, wholesale, grocery and food service.
California leads the nation with 2.8 million jobs directly tied to food and agriculture. About 11 percent of the nation’s food and agricultural jobs occur on the farm, with the rest in sectors including manufacturing, wholesale, grocery and food service.

A recent Feeding The Economy study, sponsored by the American Farm Bureau Federation and other organizations, was designed to measure the direct and indirect impact of U.S. food and agricultural industries on various economic factors, including employment, wages, economic output, tax revenue and exports. In this article, we review agriculture's direct impact on the U.S. economy and provide a state-level overview of direct agricultural jobs.

The Feeding the Economy study revealed U.S. jobs directly related to food and agriculture—including direct farming and ranching, manufacturing and wholesale and retail functions—total 22.8 million jobs, representing approximately 15 percent of all U.S. employment based on February 2019 Bureau of Labor Statistics employment data. These direct jobs represent total wages of $729 billion and generate an economic output of $2.1 trillion.

The underlying data of the model used in this study is based on 2016 employment and output data, which is used in conjunction with industry growth rates to estimate 2019 levels.

Direct food- and agriculture-related jobs include a variety of functions such as commodity production and farming activities, manufacturing and wholesale and retail channels. Importantly, industries included in this study go beyond purely agricultural jobs and include many jobs further down the supply chain, such as food manufacturing and service.

The largest direct job category in food and agriculture is retail—that is, grocery and food service—which represents 17 million jobs, or 75 percent of all direct agricultural and food jobs. Principal farming jobs total 2.6 million and represent 11 percent of all direct food and agricultural jobs. Following direct farming activities are manufacturing jobs, such as rice milling or tortilla manufacturing, at 2.1 million jobs or 9 percent, and then wholesale jobs at 942,000 jobs or 4 percent of all direct food and agricultural jobs.

The number of direct food and agricultural jobs is the highest in states with agricultural- and labor-intensive industries, as well as large population centers that support the retail food sectors. California leads the nation with 2.8 million direct food and agriculture jobs, followed by Texas at 2 million jobs and Florida at 1.4 million jobs.

At the national level, as outlined above, approximately 11 percent of food and agricultural jobs are in farming-related activities, while 89 percent of food and agricultural jobs are downstream in the supply chain. To measure the agricultural job intensity across the U.S., the percentage of direct agricultural jobs to total direct jobs in food and agriculture—agricultural jobs divided by the sum of direct food and agricultural jobs across the agricultural, manufacturing, wholesale and retail supply chain—was calculated. This intensity level will identify which states have a higher percentage of food and agricultural jobs directly tied to farming.

At the state level, the agricultural job intensity ranges from less than 2 percent to as high as 40 percent. The intensity of direct agriculture-related jobs is the highest in North Dakota and South Dakota, where 40 percent and 36 percent of all food- and agriculture-related jobs are directly tied to agriculture, respectively. In many states, primarily in the West and Midwest, the percentage of direct food- and agricultural-related jobs is greater than 25 percent.

In portions of the country with higher metropolitan populations and less agricultural production, the percentage of jobs directly tied to agriculture is lower. For example, in Massachusetts, Connecticut and New Jersey, fewer than 3.5 percent of food and agricultural jobs are directly tied to farming activities. In California, 9 percent of agricultural jobs come in direct food and agriculture categories.

Another measure of employment intensity in agriculture is direct agricultural jobs as a percentage of the state population. The percentage of the population directly employed in food or agriculture was 6.9 percent at the national level, but ranged from a low of 5.6 percent in West Virginia to a high of 11.3 percent in South Dakota. In California, the figure was 7 percent. As expected, the percentage of the population directly employed in food and agriculture was the highest in portions of rural America with high concentrations of food and agricultural activities and a lower population.

The Feeding the Economy study determined the 22.8 million total direct jobs related to food and agriculture generated not just the total wages of $729 billion, but federal tax contributions of $537 billion, state tax contributions of $376 billion and economic output of $2.1 trillion—proving that agriculture and its related industries have a sizable impact on the U.S. economy.

(John Newton is chief economist and Michael Nepveux is an economist with the American Farm Bureau Federation. This commentary is adapted from a posting on the AFBF Market Intel blog.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.