Many rural communities need more diverse economies to support their agricultural activities, wrote Mark White, agriculture and consumer economist at the University of Illinois. His report was published by the Illinois Farmdocdaily.
A recent report—sponsored by CoBank—showed that 82% of farm household income came from off-farm sources, White said, 56% from the principal farm operators in 2017 and the rest from spousal jobs. Off-farm jobs provide operators with additional income and access to benefits like health insurance, allowing many farmers and their families to continue participating in production agriculture.
Rural Counties Contribute To US GDP
Agriculture, forestry, fishing and hunting, or production agriculture, accounted for $206.6 billion, or 0.9% of total US GDP in 2021, he said. But while nonmetropolitan counties generated only 10% of total GDP, these counties contributed more than half (52.3%, or $108.1 billion) of GDP created from production agriculture.
Over the past two decades, the share of GDP created by the sector has been split relatively evenly between metro and nonmetro counties with the latter producing a slight majority almost every year since 2008, White said.
Production agriculture generated 4.8% of the total 2021 GDP in nonmetro countries, White said. This sector was the 8th largest behind other sectors like manufacturing (15.9%); finance, insurance and real estate (15.5%), and Government (13.6%), the latter of which included public school employees.
Using inflation-adjusted estimates, the annual GDP generated by the nonmetro, production agriculture sector has grown by almost 50% since 2001, he said. As a share of total nonmetro GDP, however, the agricultural sector has ranged from 5% to 6.5% over the past two decades.
During that time, other sectors grew at a faster pace, notably professional and business services (80%) and mining (65%), White said.
Nonmetro Economies Diverse
Production agriculture’s economic importance is not consistent across nonmetro counties, however, he said. US Bureau of Economic Analysis’ county-level GDP estimates showed the relative contributions that production agriculture made to each county’s economy.
The agricultural sector is a leading source of economic activity for many counties located in the Great Plains and in parts of the Midwest, he said.
In many instances, the counties where production agriculture represented the greatest share of GDP have relatively smaller populations and more limited sources of other economic activity, White said. Production agriculture generated more than 20% of total GDP in 323 counties nationwide; 262 of these counties (82%) had 10,000 or fewer residents.
In the five counties where the agricultural sector accounted for more than 70% of total county GDP, all had fewer than 3,000 residents and three had fewer than 1,000.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $160.55 to $161.05 per cwt, compared with last week’s range of $156.00 to $159.91. FOB dressed steers, and heifers went for $253.07 to $253.34 per cwt, versus $244.52 to $252.19.
The USDA choice cutout Monday was up $0.29 per cwt at $269.95 while select was up $1.92 at $256.21. The choice/select spread narrowed to $13.74 from $15.37 with 91 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were steady to down $0.07 at $1.50 to $1.70 a bushel over the Mar corn contract. Bids in Kansas were steady at $0.75 over Mar, which settled at $6.85 a bushel, up $0.04 1/2.
No live cattle contracts were tendered for delivery on Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $183.33 per cwt, up $0.24. This compares with Monday’s Mar contract settlement of $187.20 per cwt, up $0.80.