Nebraskans depend heavily upon their agricultural industry. It’s the state’s largest breadwinner, accounting for 34% of the gross state product. That’s $81.88 billion from the state’s agricultural production complex, according to a study of 2017 ag economics. The same study determined that even during hard times, Nebraska agriculture’s diversity insulates it from severe downturns.
If you think 2017 data is dated, researchers tapped it because that year was the last time a census of agriculture was conducted.
Even in a year like 2017 with low commodity prices and modest farm incomes, between one-fifth and one-fourth of Nebraska’s economy was attributed to the agricultural production complex, the study found.
“Few other states have an economy with this degree of agricultural prominence,” said Mike Boehm of the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln. “Even as our cities grow and our economy diversifies, agriculture remains critically important to the economic prosperity of Nebraska, and it will long into the future.”
Many of the jobs in Nebraska — about 23.3 percent — were tied to agriculture in 2017. That’s 321,000 workers earning a total of $14.3 billion.
“Even though commodity prices were relatively low in 2017, producers still hired workers, bought and repaired equipment and made other business decisions that kept most aspects of Nebraska’s agricultural production complex strong,” the study concluded. That fact shows that farmers and ranchers tend to make investment decisions based on long-term trends, rather than based on a single good or bad season.
During the great recession of 2008-09, the tendency of farmers to make decisions based on the long term rather than short term helped insulate Nebraska’s economy from the recession. The study’s authors theorize that, like the insulating effect 12 years ago, Nebraska’s economy also will shield the state from adverse economic effects of the coronavirus pandemic.
The virus is depressing prices, especially for some commodities, but the ag sector isn’t shutting down. Rather, it is holding up Nebraska’s overall income.
The full INAR report is available at agecon.unl.edu/agimpact. Here’s the good news: Just as agriculture has strengthened our state’s economy even as other states’ economies are on the skids, Nebraskans will continues to benefit. We have a product that’s in demand.
Just look at the growing number of middle-class citizens in China. They’re developing a taste for good Nebraska products.
As trade agreements overseas, no doubt, will strengthen our state’s economy.