Food and agriculture’s economic impact packs punch

The U.S. food and agricultural sector—including food retailers—contributes about 18.5%, or $8.61 trillion, to national gross domestic product (GDP), according to the 2023 “Feeding the Economy” economic impact report, sponsored by FMI-The Food Industry Association and 24 other industry trade groups.

Overall, the food/ag industry’s total economic output grew 21.8% since the Feeding the Economy study for 2019, covering the pre-pandemic period, FMI said. The annual report measures the food/ag sector’s impact on local and nationwide economic activity year over year.

FMI noted that all 50 states boosted food/ag economic output compared with the 2022 report, reflecting a rebound in U.S. economic activity. The biggest gains in total output were generated by Hawaii (31%), North Dakota (26%), New York (23%), Nevada (22%), and Florida (21%). California led with total food/ag economic output of $1.1 trillion, followed by Texas ($733.5 billion), Florida ($433.8 billion), New York ($420 billion) and Illinois ($413.7 billion).

Aside from dollar output, food and agriculture accounted for 46.3 million jobs ( 1.5% since the 2019 report), $2.61 trillion in wages ( 26.2%), $947.93 billion in taxes ( 3.8%) and $202.2 billion in exports ( 24.4%).

“FMI is proud to sponsor this research to help shed light on U.S. food and agriculture’s $8.6 trillion contribution to the American economy, which has increased nearly 22% since 2019,” FMI-The Food Industry Association President and CEO Leslie Sarasin said in a statement.

Source: "Feeding the Economy" 2023 report, provided by FMI-The Food Industry Association.

Of total food and agriculture dollar output in this year’s Feeding the Economy report, retailing represented $1.54 trillion, or about 17.9%, in direct economic impact. That includes $1.26 trillion for on-premise and $279.45 billion for off-premise retailing. In addition, retail accounted for $559.35 billion in wages and nearly 17 million jobs in the food/ag arena.

The study’s research, conducted by John Dunham & Associates, also examined supplier and induced economic impact for food and agriculture. For retail, supplier economic impact totaled $28.12 billion in output, $9.65 billion in wages and nearly 202,828 jobs. Retail’s induced impact for food and agriculture—i.e. how it affects other parts of the ecomony—was reckoned at $176.5 billion in output, $62.72 billion in wages and 1.4 million jobs.

“Americans say that farmers (53%) and primary food stores (46%) are on their side when it comes to helping them stay healthy, according to our most recent national survey among grocery shoppers,” Sarasin added. “The food supply chain remains committed to doing everything it can to keep food price volatility at bay. We all play a role in improving food access and affordability across this nation, and this research conveys the important role that food retailers, food makers and agriculture play in our nation’s economic prosperity to both policymakers and consumers.”

In assessing the direct impact of other food/ag industry segments, the Feeding the Economy report pegged wholesaling as contributing $278.35 billion in output, $99.03 billion in wages and 1.05 million jobs. Meanwhile, manufacturing generated total output of $1.14 trillion, wages of $158.69 billion and 2.4 million jobs. Agriculture contributed $458.7 billion in output, $110.34 billion in wages and almost 2.5 million jobs.

Besides FMI, trade associations sponsoring Feeding the Economy included the American Bakers Association, American Beverage Association, American Farm Bureau Federation, American Frozen Food Institute, American Soybean Association, Association of Equipment Manufacturers, Corn Refiners Association, CropLife America, The Fertilizer Institute, Global Cold Chain Alliance, Institute of Shortening and Edible Oils, International Dairy Foods Association, National Association of State Departments of Agriculture, National Grain and Feed Association, National Grocers Association, National Milk Producers Federation, National Oilseed Processors Association, National Pork Producers Council, North American Meat Institute, Peanut and Tree Nut Processors Association, SNAC International, The Sugar Association, U.S. Dairy Export Council and U.S. Grains Council.