October 16th, 2024 | Nebraska Farm Bureau News Release
The latest study of agriculture’s economic contribution to Nebraska’s economy found that “agriculture has a presence in every Nebraska county, and for may counties it is the primary driver of economic activity.”
The study sponsored by the Nebraska Soybean Board and performed by Decision Innovations Solutions estimated agriculture contributed nearly $32 billion in value-added activity to the state’s economy in 2023. It also contributed $97.4 billion in total output, 244,000 jobs, and $16.4 billion in labor income. Each measurement is a different means for quantifying a sector’s economic contribution.
The study, an “economic contribution analysis,” accounts for the contribution of production agriculture (crop and livestock production) and the first round of value-added processing. It analyzes the direct economic impact of each sector as well as the multiplier effects on the rest of the economy. The multiplier effects come about through purchases of supplies and inputs and purchases of goods and services by owners and employees with income generated in agriculture.
The report found agriculture supports more than 40% of the jobs in 54 counties and between 20% and 40% of jobs in another 30 counties. Agriculture is also an important contributor to counties value-added activities (akin to the gross domestic product). Figure 2 shows the estimated value-added contribution from agriculture in each county. Somewhat surprisingly the highest total dollar contribution is found in Douglas County, $3.9 billion, mostly due to the large processing sector in the county. Hall County ($1.9 billion) and Lancaster County ($1.4 billion) follow.
However, in terms of agriculture’s share of overall economic activity in counties, a different picture appears. Figure 3 shows the estimated percentage of total value-added activity within each county that is driven by agriculture. Wheeler (96%), McPherson (92%), and Saline (88%) Counties rely most heavily on economic activity from agriculture as a share of the counties’ total economy.
Douglas and Lancaster Counties fall to the bottom by this measure with only 6% of their economic activity generated by agriculture. For most counties, though, agriculture is a significant contributor. The study states, “Of Nebraska’s 93 counties, 66 derive more than 40% of their value added from agriculture, and 12 derive more than 80% from agriculture.”
FIGURE 2. VALUE-ADDED BY AGRICULTURE TO COUNTY ($ MILLIONS)
Source: 2023 Economic Contribution Study of Nebraska Agriculture, Decision Innovation Solutions, prepared for the Nebraska Soybean Board, May 2024.
FIGURE 3. PERCENT OF TOTAL VALUE-ADDED FROM AGRICULTURE
Source: 2023 Economic Contribution Study of Nebraska Agriculture, Decision Innovation Solutions, prepared for the Nebraska Soybean Board, May 2024.
The Soybean Board study shows that, with the exception of jobs linked to agriculture, the contribution by agriculture to the economy has grown compared to a few years ago. A 2020 analysis by the University of Nebraska Department of Agricultural Economics and Bureau of Business Research found the agricultural production complex accounted for $82 billion of total output, 321,000 jobs, $25.7 billion in value-added activity, and $14.3 in labor income.
Part of the difference in estimates between could be that different assumptions were made concerning economic activities to be included as part of agriculture. But growth in economic activity linked to agriculture has to be part of the story as well. Either way, the latest study suggests agriculture is still a powerful economic force in Nebraska.
