News Release Distributed 03/15/10

Louisiana agriculture contributed $8.3 billion to the state’s economy in 2009, which was the lowest contribution since 2002 and down from $9.5 billion in 2008, according to the latest figures compiled by the LSU AgCenter in its annual Ag Summary, which was released today (March 15).

In 2002, the contribution was $7.5 billion, and the high in the intervening years was $10.9 billion in 2007, said LSU AgCenter economist John Westra, who serves as project director of this annual survey, which has been conducted since 1978.

“Many people don’t realize the significance of production agriculture to Louisiana’s economy,” Westra said. “That was one of the original reasons for starting this annual report more than 30 years ago.”

The $8.3 billion figure is a combination of two numbers – the sale price the farmer gets for the raw commodity, which totaled $4.9 billion, and the sale price of the next step in the journey from farmer to consumer, called value-added, which was $3.4 billion.

For example, with sugarcane the $752 million contribution in 2009 includes the price the farmers received for their cane and the price the mills received for producing raw sugar from the cane.

“Our figures only go to the first stop beyond the farm,” Westra said. “The level of value-added varies among the commodities.”

The LSU AgCenter also develops a Value of Agriculture report, which includes retail, shipping and further processing. That number in 2007 was $29 billion.

“We’re working on the new version of this report, and that should be out in April,” Westra said.

One reason for the lower number in 2009 compared to 2008 was the 25 percent drop in each of the state’s two biggest agricultural industries – forestry and poultry, Westra said.

Forestry went from $3.3 billion to $2.5 billion, and poultry went from $1.2 billion down to $884 million in 2009.

“The recession and the housing market collapse in many regions of the country were the biggest factors that hurt the forestry industry,” Westra said.

Two paper mills in the state have closed in the past two years, causing a drop in demand for paper and wood products.

“There’s an excess stock of housing available, which has depressed the home construction business and demand for lumber products,” Westra said.

Westra doesn’t think a rebound for the forestry industry is likely in 2010.

“The housing market won’t rebound until unemployment goes down,” he said.

The recession is also partly to blame for the poultry industry downturn, Westra said.

Although Foster Farms took over the poultry processing plant in Farmerville closed by Pilgrim’s Pride, which left the state over a year ago, Foster Farms is not operating the plant at the level it had been before the sale, Westra said.

The third most valuable commodity in 2009 was sugarcane, which went up 25 percent from 2008.

“The increase was due to higher sugar prices from changes in U.S. sugar policy and decreased production worldwide,” Westra said.

The horse industry came in at fourth place with its $579 million contribution to the economy, which was just about the same as last year, Westra said.

“This industry is bigger than most people realize and has stayed pretty steady from year to year,” Westra said, adding that this number doesn’t include gambling revenue.

The second most valuable plant commodity was rice at $519 million. Near-record yields helped the rice industry rebound from flooding and saltwater intrusion problems caused by hurricanes from a few years back.

However, the overall value was down 6 percent from 2008 because of lower prices, Westra said.

Soybeans are next in line for value from row crops, moving up 9 percent in 2009 to $369 million. Soybeans continue to be the crop that takes up the most land in Louisiana – about a million acres.

“Soybeans are planted on twice as many acres as either sugarcane or rice,” Westra said.

Cotton, once the king of row crops in Louisiana, doesn’t even make the top 10 list in value to the Louisiana economy.

“Farmers have been getting relatively higher prices from corn and soybeans than from cotton,” Westra said.

Beef cattle, which is an industry in every parish but Orleans, was down slightly – 4 percent – from 2008. The contribution in 2009 to the state’s economy was $365 million.

Ninth place in terms of contribution to the economy were the feed grains at $363 million. Feed grains – meaning grains fed to livestock – include corn, grain sorghum and oats. Their value was down almost 20 percent from 2008.

“Corn prices went down. There were fewer acres harvested, and yields were down,” Westra said, adding that sorghum and oat acreage was down about 50 percent from the year before.

The aquaculture and marine fisheries industries also were down from the year before. Aquaculture includes fish-farming operations, such as crawfish, alligators, oysters and bait minnows, and contributed about $319 million to the economy. The marine fish industry – which includes products from the sea such as shrimp, blue crabs and menhaden – had a value of $441 million in 2009.

All together the Ag Summary provides facts on 175 different commodities that are part of the Louisiana agriculture economy.

“Outside of California, we have the most diverse agricultural economy in the country,” said Paul Coreil, LSU AgCenter vice chancellor for extension.

The report is compiled each year by parish and regional extension agents in the state.

“The Ag Summary helps us keep track of changes in the agricultural community so we know how to shape our research and extension programs for the most impact,” Coreil said.

Many people use the Ag Summary as a source for Louisiana agriculture facts including politicians, the media and other governmental agencies such as the U.S. Department of Agriculture.

“In instances in the past, the USDA has used our figures as a resource for allocation of staff effort in Louisiana,” Westra said, adding that such decisions have been made based on the level of commodities produced in various parishes.

The latest Ag Summary is available online. Go to www.lsuagcenter.com/agsummary. Also online are the reports back to 1997.

Linda Foster Benedict