updated: 4/11/2012 1:11:55 PM

Study Highlights Increasing Value of Agricultural Exports

InsideINdianaBusiness.com Report

 IBRC Director of Economic Analysis Tim Slaper says agricultural growth boosts other sectors across the state.

The Indiana Business Research Center says the dollar value of the state's agricultural exports has more than doubled over the past decade. An IBRC report shows Indiana exported $3.4 billion in commodities and processed goods in 2010, compared to $1.5 billion in 2000.

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April 11, 2012

News Release


BLOOMINGTON, Ind. -- Agriculture always has been historically important to the Hoosier state, but a new Indiana University report finds renewed evidence of its growing economic role in exports and employment.

The new report, "Cultivating Trade: The Economic Impact of Indiana's Agricultural Exports," noted that $3.4 billion in commodities and processed goods were exported in 2010 -- accounting for more than 10 percent of all state exports.

"The growth of foreign markets for agricultural products has only enhanced the significance of this sector in the Hoosier state," said Timothy Slaper, director of economic analysis at the Indiana Business Research Center in IU's Kelley School of Business, which conducted the study.

The ripple effects from these commodity and processed goods sales spurred $2.2 billion in additional economic activity in the state, bringing the total economic footprint of agricultural exports to $5.6 billion.

The dollar value of Indiana's agricultural exports more than doubled over the past decade, from $1.5 billion in 2000. Indiana was the eighth largest agricultural exporter nationally in 2010. The value of production increased over the decade by double or triple digits in every commodity group except vegetables. Grains had the largest increase in price per unit: 160.4 percent.

"As the world's population multiplies and the fortunes of developing countries improve, the demand for agricultural products will continue to rise," added Tanya Hall, an economic research analyst at the IBRC and co-author of the report. "The effect of worldwide demand has already boosted the value of agriculture production, contributing to sustained higher prices for agricultural commodities."

More than 100,000 Hoosiers worked directly on 62,000 farms statewide or in agricultural processing and food manufacturing in 2010.

The combined effects of agricultural exports alone supported an estimated 34,800 jobs statewide. About 18,100 of these jobs were on farms or in food-processing activities. Purchases in the agriculture supply chain and the household spending of farm workers and other industry employees accounted for an additional 16,700 jobs.

Funding from the Indiana Soybean Alliance supported the study. "This study confirms and puts a value to the positive economic impact agricultural trade has on our state," said Kevin Wilson, president of the Indiana Soybean Alliance and a farmer from Walton, Ind. "The study will draw attention to the importance of trade not only to Indiana farmers and the rest of our state's agricultural industry, but also the rest of our economy."

Soybeans and related products accounted for half of Indiana's agricultural exports in 2010, totaling $1.7 billion. These exports generated an estimated $1.1 billion in economic ripple effects, supporting an estimated 17,700 jobs throughout the state.
Other findings of the study included:

Indiana exported $800 million in feed grains and related products in 2010. Livestock and meat, poultry products and wheat products rounded out the state's five largest agricultural export commodity groups.

From 2002 to 2010, the state's agricultural product exports had a nominal value increase of 133 percent (92 percent in constant dollars), while the nominal value of non-agricultural product exports increased nearly 90 percent nominal (50 percent in constant dollars).

The value of Hoosier agricultural exports grew at an average annual rate of 8.2 percent from 2000 to 2010, exceeding the U.S. average rate of 7.6 percent in current dollars.

The economic activity generated by Indiana's agricultural exports produced an estimated $185 million in state and local government revenues and $224 million in federal government collections in 2010.

About 40 percent of Hoosier corn production is used for ethanol production and its by-products within the state. Indiana exported $5.3 million worth of ethanol in 2010.

"Efforts to expand existing export markets for agricultural goods, and to open new ones, should have significant positive ripple effects throughout the Indiana economy," the authors concluded. "With this in mind, the degree to which Indiana's agricultural exports increase in the coming years will be an important economic indicator to watch."

Source: Indiana University

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