Farm Management

Agriculture & Forestry Grow Alabama: An Economic Contribution Study

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A collage of images related to the ag and forestry section.

In 2022, the economic contribution of Alabama’s food, fiber, forestry, and green industries was $77.3 billion and 273,271 jobs, which accounted for 10% of Alabama’s workforce.

Letter from the Commissioner

Letter from the Commissioner

Alabama Department of Agriculture and Industries logoI am honored to present Agriculture & Forestry Grow Alabama: An Economic Contribution Study. This in-depth report demonstrates the profound influence agriculture and these allied industries have on the prosperity and sustainability of Alabama’s economy. As Commissioner of the Alabama Department of Agriculture and Industries, I am proud to highlight vital contributions of our farmers, foresters, landowners, and industry professionals. Their daily work adds to the economic and environmental well-being of our state.

In the following pages, you will find a comprehensive analysis of the economic benefits driven by Alabama’s agricultural and forestry industries. These sectors contribute $77.3 billion annually to the state’s economy, support 10% of Alabama jobs, and help shape the economy and well-being of Alabama’s rural and urban communities.

Alabama’s diverse agricultural output includes everything from poultry, cattle, and catfish to peanuts, cotton, and soybeans. Additional powerhouses include greenhouse, nursery, and floriculture production, plus fruits, vegetables, hay, corn, wheat, and small grains. Many of these commodities help feed and clothe people in our state and across the globe. Others add beauty to our environment while sustaining our economy. Many times, they are the engines for sustainability in rural Alabama.

Similarly, the state’s abundant forests are essential to both the state’s economy and a healthy environment. Visitors and Alabamians alike are reminded of our natural resources’ dominance when traveling across the state, two-thirds of which is covered in forestland. Through responsible forest management, Alabama remains a leader in timber production while promoting sustainability and protecting our natural resources for future generations.

I encourage you to review Agriculture & Forestry Grow Alabama: An Economic Contribution Study. You’ll gain a greater understanding of our impactful industries. With plans to release biennial updates, this study also tells of a promising future of these industries and rural communities. With your help, I look forward to continuing our work, providing for our communities and growing Alabama’s economy.

Rick Pate Signature

Rick Pate, Alabama Department of Agriculture and Industries Commissioner

Highlights

Highlights

Alabama’s agricultural and forestry industries significantly contribute to the state’s economy. There are many ways to define the sectors that make up these industries. Based on 2022 data, this report focuses on the production, input, service, and processing/manufacturing components of the food, fiber, forestry, and green industries. In 2022, the economic contribution of Alabama’s food, fiber, forestry, and green industries was $77.3 billion and 273,271 jobs, which accounted for 10% of Alabama’s workforce. Total labor income, including employee wages, fringe benefits, and proprietor income, is $15.4 billion.

  • For every $1.00 of agricultural and forestry output, $1.40 of activity is generated in the local economy. This is the original $1.00 of output plus an additional $0.40.
  • The total output contribution of the agricultural and forestry industries translates to $15,131 per capita.
  • The agricultural and forestry industries generate 5 jobs per $1 million in direct sales.
  • Employment contributions represent 10% of the total state employment.
  • An additional 0.64 jobs are created for each direct job in the agricultural and forestry industries.
  • For every $1 of income in the agricultural and forestry industries, an additional $0.66 of income is generated in other industries in the local economy.

The results of this study illustrate the importance of the agricultural and forestry sectors to the Alabama economy. There are additional benefits not accounted for in this analysis, including further economic activity from the distribution and retailing of related agricultural and forestry products and social benefits that enhance the quality of life of Alabama residents.

Timber Production & Processing: $30.6 BILLION and 91,372 JOBS. Poultry & Egg Production & Processing: $19.0 BILLION and 47,205 JOBS. Soybean, Corn & Wheat Production: $812.4 MILLION and 4,736 JOBS. Beef Production: $703.6 MILLION and 10,063 JOBS. Cotton Production: $566.9 MILLION and 4,797 JOBS. Greenhouse, Nursery & Floriculture Production: $510.6 MILLION and 4,360 JOBS. Peanut Production: $238.0 MILLION and 1,940 JOBS. Catfish Production: $161.3 MILLION and 676 JOBS.

These values represent the total economic activity of the agricultural and forestry sectors including production of goods and services, inputs to production, and expenditures from household income.

Conservation Practices

Investments in Agricultural and Forestry Conservation Practices

Agricultural and and forestry producers in Alabama continuously work to preserve the natural resources their land provides. The Alabama Soil and Water Conservation Districts, together with the US Department of Agriculture Natural Resource Conservation Service (NRCS), has programs to help provide the technical and administrative assistance necessary for producers to adopt practices that may otherwise not be implemented. In 2022, producers utilized more than $44 million through NRCS programs in the form of Environmental Quality Incentives Program (EQIP) contracts, Conservation Stewardship Program contracts, and other conservation programs such as installation of riparian buffers of irrigation systems.

This contribution study does not directly measure the effects of investment in conservation practices, but it does include the impacts of increased production outputs that may result from adopting these practices, where applicable. Measuring the impact of investment in conservation practices would require the additional assessment of sectors necessary for the capital investment, such as related materials and income for technical assistance.

 

Introduction

This study focuses on determining the contribution of the agricultural and forestry industries to the Alabama economy. This combined industry plays a crucial role in providing food, fiber, forest, and green industry products and services, contributing to the Alabama economy through production, employment, and income. According to the 2022 Census of Agriculture, Alabama farms have approximately 8.6 million acres of land, including 2.9 million in cropland and 1.9 million acres of pastureland. Forestland covers 69% of the total land mass in the state.

1.2 BILLION Broilers Produced, 434.6 MILLION Eggs Produced, 1.3 MILLION HEAD OF Cattle in Inventory, 23.1 MILLION ACRES OF Forestland, 833 THOUSAND BALES OF Cotton Harvested, 1.8 MILLION TONS OF Hay Produced, 57.4 MILLION BUSHELS OF Corn, Soybeans & Wheat, 554.2 MILLION POUNDS OF Peanuts Harvested, 1.2 BILLION CUBIC FEET OF Forest Production.

Some key facts about the 2022 agricultural and forestry production sector include the following:

  • With 1.2 billion head, Alabama had the second largest number of broilers produced in the United States.
  • A total of 1.3 million head of cattle were in inventory, including 672,000 beef cows and 580,000 calves.
  • There were 1.8 million tons of hay produced, the second largest total of immediate neighboring states to Alabama.
  • Alabama has diverse row crop production with more than 1.4 million planted acres, including 435,000 acres of cotton; 360,000 acres of soybeans; 300,000 acres of corn; 180,000 acres of wheat; and 165,000 acres of peanuts.
  • Alabama was the third largest producer of cotton and peanuts in the United States, with 833,000 480-pound bales of cotton and 554.2 million pounds of peanuts.
  • Production of timber products totaled 1.2 billion cubic feet.

While production is at the core of this study, essential manufacturing of inputs and processing of outputs exist in Alabama because of the production activities on the land. Thus, this study focuses on the supply chain through the processing and manufacturing of agricultural and forestry production activities.

The following pages provide a breakdown of each category included in the report and the value of direct output or the percentage of the direct category output produced by that industry.

 

Alabama’s Ag and Forestry Industries      Methods     Results     Regional Breakdown     Sector Data

 

Glossary

Glossary

  • Agricultural Statistical District: a group of counties in a region identified by the US Department of Agriculture to represent similar geographic, climate, and cropping practices.
  • Contribution analysis: a method used to provide evidence of how important a particular sector is to the existing economy.
  • Direct effects: the value of production, sometimes referred to as output, of an economic activity.
  • Employment: jobs that are generated through modeled economic activity including full-time, part-time, and seasonal employment and proprietors. This does not represent a full-time equivalent.
  • Impact analysis: a method used to determine how a direct change in expenditure of a specific project will affect the local economy.
  • IMPLAN: a regional economic analysis software package that uses input-output modeling to estimate the effects of a specific economic activity within a specified geographic area.
  • Indirect effects: the additional output, sales, or employment generated from business-to-business purchases, i.e., the purchase of raw materials needed for production.
  • Induced effects: the additional output, sales, or employment generated by the household expenditure from earned income generated from the modeled economic activities.
  • Industry: a group of businesses engaged in similar economic activities.
  • North American Industrial Classification System (NAICS): a standardized system of codes used to group businesses based on their primary operation and similarity in production process.
  • Sector: an industry or group of industries that produce similar products or services.
  • Total economic contribution: the sum of the direct, indirect, and induced effects.

References

References

Partners, Sponsors, Contributors, and Friends

Partners

The Alabama Department of Agriculture and Industries, Economic Development Partnership of Alabama, the Alabama Department of Commerce, Alabama Ag Credit, the Alabama Farmers Federation, the Alabama Nursery and Landscape Association, the Alabama Farmers Cooperative, Alabama Farm Credit, and the Alabama Poultry and Egg Association.

Logos of the partnering organizations for the Agriculture & Forestry Grow Alabama: An Economic Contribution Study

Sponsors

The Alabama Treasure Forest Association, the Alabama Cattlemen’s Association, Alabama Soybean Checkoff, Alabama Cotton Checkoff, Alabama Wheat and Feed Grain Checkoff, and Alabama Catfish Checkoff.

Logos of the sponsoring organizations for the Agriculture & Forestry Grow Alabama: An Economic Contribution Study

Contributors

The Alabama Peanut Producers Association and First South Farm Credit.

Logos of the contributing organizations for the Agriculture & Forestry Grow Alabama: An Economic Contribution Study

Friends

Syngenta, the Walker County Farmers Federation, and the Alabama Fruit and Vegetable Growers Association.

 

 

ACES,-Alabama-Agribusiness-Council,-and-Grow-Alabama-logos

Adam N. Rabinowitz, Associate Professor and Extension Economist, and Dennis Brothers, Associate Extension Professor, both with Auburn University

The authors wish to thank the many supporting partners that participated in discussions and provided feedback, improving the overall project outcome.

Studies, results, and reports that rely on IMPLAN data or applications are limited by the researcher’s assumptions concerning the subject or event being modeled. This study is in no way endorsed or verified by IMPLAN Group, LLC.

New January 2025, Agriculture & Forestry Grow Alabama: An Economic Contribution Study, ACES-2817

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