September 5, 2017 at 3:32 p.m.

Dairy industry drives Iowa economy

Study reveals total economic impact per cow is $23,445

By by Kelli Boylen- | Comments: 0 | Leave a comment

During June Dairy Month, dairy producers send a strong message to the public about the benefits of dairy products, but it may also be worth mentioning the benefits of the cows themselves.
What is a cow worth to the community? It may not seem like much, but when looking at the whole picture, things start adding up.
According to a recently released study on the economic impact of Iowa's dairy industry, total economic impact per cow through direct/indirect and induced commerce is $23,445.
This report was written and compiled by the Value Added Agriculture Program, the Department of Animal Science and the Department of Economics at Iowa State University. Sponsors of the report include Iowa Area Development Group, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa State Dairy Association and the Midwest Dairy Association.
Mike Meissen of the Iowa Area Development Group co-chairs the economic development committee of the Iowa Dairy organization. He, and others he was working with, wanted to create this report as a "tool" which could be used by dairy producers when they talk with bankers and legislators, or even just members of their community, on why dairy is important.
The Iowa Area Development Group is a consortium organized in 1985 to serve businesses interested in expanding, or locating, within the member-owned electric co-ops of Iowa. Electric cooperatives have a vested interest in a healthy economy in Iowa, and they recognize dairying as part of that picture. The group assists dairy producers looking to relocate to Iowa, and they also work with producers looking to expand.
Of the $23,445 of economic impact for each cow, the largest share goes to dry, condensed and evaporated dairy product manufacturing at 21 percent. Wholesale trade business follows at 19 percent, dairy cattle and milk production at 18 percent and fluid milk and butter manufacturing also at 18 percent. The next largest category of economic impact is support activities for agriculture and forestry at 10 percent, and ice cream and frozen dessert manufacturing at six percent. Food service counts for three percent and real estate and transport by truck each count for one percent. Cheese manufacturing counts for less than one percent.
According to the report, each cow generates the equivalent of .1 full time job created throughout the entire dairy and processing sectors.
More than 22,000 jobs are supported by the activities directly, indirectly and induced by a strong dairy presence.
Current estimates of employment in the dairy sector (both farm and non-farm) are approximately 23,000 full-time equivalent jobs in the state of Iowa. The total economic impact in dollars is over $900 million from direct, indirect and induced employment.
In addition to the economic impact, every 100 cows create one full-time job and 1.6 children in the school systems.
"Dairying has a huge bang for the buck," Meissen said. "Without a doubt, dairy is one of the highest economic values to bring into an area."
Dairy farms in Iowa range from 18 to 8,000 head, and they have more efficiently out-produced surrounding states for the past two decades.
Meissen said the report can also be a tool when recruiting dairy producers to Iowa because it also outlines the resources available here.
This is in spite of the fact that Iowa, like many other Plains states, has seen loss of population from many of its rural areas, causing financial hardship to many rural communities. Considering the substantial impact dairy production has on rural communities, this has created opportunities for dairy producers of almost any size to locate operations in several Iowa counties, which are considered economic incentive zones. State and private development groups continually concentrate resources to bring agricultural industry and support services to these areas.
The report concludes, "...a healthy and vibrant dairy industry is a significant economic driver that not only creates quality jobs, it provides a diverse and wide-reaching ripple effect that creates substantial economic activity within their communities, resulting in more economic stability to the local and state fabric of Iowa."
To view the report in its entirety, go to http://www.iowadairy.org and click on the link that reads "Report by ISU Shows Dairy's Tremendous Economic Value"[[In-content Ad]]

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