Second Interim Update on the Economic Impact of Michigan's Agri-Food and Agri-Energy System


January 1, 2009 - Bill Knudson and H Christopher Peterson


This report represents the second interim update to a report published in January 2006 entitled “The Economic Impact and Potential of Michigan’s Agri-Food System.” The original report was based on a complete set of 2004 data for both agriculture and related food (manufacturing, distribution, and retail) sectors of the full economy. In January 2007, a first interim update was published reflecting 2006 actual data for agriculture and 2006 estimates for the food sectors. This report likewise updates the agriculture impacts for 2007 based on actual data and 2007 estimates for the food sectors. The next time both sets of actual data will exist simultaneously will be late 2010. As a result, this report and last year’s report are only interim updates.


The total economic impact (including direct and indirect) of Michigan’s agri-food and agri-energy system is estimated to be $71.3 billion, an increase of approximately $7.6 billion or 11.9 percent from the adjusted interim 2006 study. The direct economic impact of the agri-food system is estimated to be $42.6 billion and the direct economic impact of the agri-energy system (ethanol) is estimated to be $378 million. Table 1 summarizes the economic impact of the agri-food and agri-energy system. Much of this increase is due to higher prices for farm products. Before adjusting for double counting, the total economic impact of farm production increased from $7.1 billion in 2006 to $8.25 billion in 2007 an increase of $1.1 billion or 15.9 percent.



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