Study: Animal feed industry an important contributor to US economy

The animal feed and pet food manufacturing industry in the United States is an important driver of the American economy and is expected to continue to thrive and contribute to the economic well-being of the country, according to a report prepared for the Institute for Feed Education & Research (IFEEDER) by Decision Innovation Solutions.

Patrick Jennings, Shutterstock.com
Patrick Jennings, Shutterstock.com

The animal feed and pet food manufacturing industry in the United States is an important driver of the American economy and is expected to continue to thrive and contribute to the economic well-being of the country, according to a report prepared for the Institute for Feed Education & Research (IFEEDER) by Decision Innovation Solutions.

This first-ever analysis of the U.S. animal feed and pet food manufacturing industry’s contribution to the economy found that, in 2016 the industry contributed:

  • 944,227 jobs
  • $297.1 billion in total sales, which includes 102.0 billion in value-added, including $55.9 billion in labor income
  • $22.5 billion in local, state and national taxes

The study said there are 5,715 animal feed mills and 517 pet food facilities in the U.S., including those listed by the Food and Drug Administration (FDA) as licensed medicated feed mills and non-licensed.

Missouri, California, Texas, Pennsylvania and Iowa are the states that have the most valuable combination of animal feed and pet food mills that drive economic activity. Each of these five states are home to anywhere from 17 pet food mills in Missouri to 89 in Pennsylvania, and 149 animal feed mills in California to almost 680 in Texas.

Top states, congressional districts

Together, the animal feed and pet food manufacturers in the top five states contribute the following total to the economy:

  • 337,051 jobs
  • $105.2 billion in total sales, including $37.9 billion in value-added and $21.0 billion in labor income
  • $8.3 billion in taxes at the local, state and national level

Five congressional districts consistently rank at the top of all reported economic measures: Kansas-2, Iowa-4, Iowa-2, Kansas-1 and Nebraska-3. These congressional districts are in the Midwest or Plains states, which is where a significant portion of livestock and poultry are raised. There is a wide variation in the number and size of the animal feed and pet food manufacturing facilities in these congressional districts. The animal feed and pet food and related industries in the top five congressional districts contribute the following total to the economy:

  • 97,987 jobs
  • $32.7 billion in total sales, including roughly $9.8 billion in value-added and at least $5.5 billion in labor income
  • At least $2.1 billion in taxes at the local, state and national levels

Factors that affect demand

Although demand for animal feed and pet food is expected to thrive, several factors that affect demand can play a role in the economic output of this combined industry.

For example, from 2011-13, severe drought conditions shifted animal production, particularly beef cattle, to the Upper Plains and Midwest areas (North Dakota, South Dakota, Nebraska and Iowa) of the United States, largely in pursuit of better access to key feed ingredients. Within the past two years, however, adequate rainfall and more favorable weather conditions has slowed the shift of cattle from Texas and Kansas. Similarly, in 2015, the avian influenza outbreak led to a decline in laying hen inventories in key egg-producing states, such as Iowa and Minnesota, which experienced some economic drag due to the disease.

Recently, improved environmental and weather conditions and a lack of animal disease outbreaks has led to animal populations largely recovering across the country. The current demand for feed is strong, which bodes well for the industry’s continued economic contribution.

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