When economist want to “take the temperature” of the economy, two of the most important factors tend to be Gross Domestic Product (GDP) and employment. How much is the country producing and are the people working? When considering agriculture you can apply a similar line of thinking: For example how much is agriculture and related industries contributing to U.S. gross domestic product? and how many jobs does agriculture and related industries provide to the U.S. economy? The latest data from the USDA, Economic Research Service gives us an insight into these questions and the overall importance of agriculture to the nation’s economic well-being. In 2015, agriculture and agriculture-related industries contributed $992 billion to the U.S. GDP. This comes out to about 5.5% share of the total GDP. When looking at the production of just American farms, they contributed $136.7 billion of this sum — or about 1% of GDP. The overall contribution of the agriculture sector to GDP is larger than this because related sectors rely on agricultural inputs like food and materials used in textile production in order to contribute added value to the economy. Interestingly, but not surprising, farming’s contribution to GDP in 2015 fell for the second consecutive year after reaching a high point of $189.9 billion in 2013. A major reason for this downward trend has been falling commodity prices like corn and soy, which peaked around 2013 and have since fallen by around -30%. As for the contribution agriculture makes to national employment, in 2015 there were 21 million full and part-time jobs related to the agricultural and food sectors — or just over 11% of total U.S. employment. Direct on-farm employment accounted for about 2.6 million of these jobs, or about 1.5% of total U.S. employment. The agricultural sector makes an important contribution to the U.S. economy, I actually thought the numbers would have been higher. Regardless, it’s still obvious that success in agriculture equals success for the overall U.S. economy. Interesting numbers…(Source: USDA, ERS – Ag Food and Statistics)
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