News Agribiz Regional economic partnerships with food, ag key to reinventing Michigan
Regional economic partnerships with food, ag key to reinventing Michigan
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By Keith Creagh | Special to FoodBiz
Director, Michigan Department of Agriculture
& Rural Development
Agriculture is one of the dominant land-based industries in Michigan, making it the state’s second largest economic driver. West Michigan is at the center of one of the most diverse and abundant food and agriculture clusters in the U.S.
Michigan’s producers are trusted providers of the finest agricultural products and lead the nation in the production of several specialty crops and floriculture products. On a national scale, Michigan leads the nation in the production of 17 commodities and ranks in the top 10 for 46 other commodities.
According to a Michigan State University report, the state’s agri-food industry contributes $71.3 billion to our economy. When you factor in production agriculture, food processing and related businesses, it employs more than one million Michigan residents. The agri-food industry is a robust and high-tech industry that will undoubtedly serve as one of Michigan’s foundations to our long-term, sustainable economic growth.
In the next decade, technology, broadband, infrastructure and energy may be the single most important driving forces for economic vitality. While technology can overcome the disadvantages of distance, it continues to be a challenge providing it in rural areas with low population density. Nevertheless, rural areas must be competitive with metro areas in technological, infrastructure and energy advancements if they are to attract businesses and employment.
Rebuilding local economies requires social capital, physical capital and financial capital. Local leaders and state agencies can work together to create a positive business climate, including a strong infrastructure, allowing businesses to access markets. Equally important is that local businesses can access financial capital to start or expand operations.
There are numerous economic development opportunities in our growing food processing industry. Michigan has a dynamic food processing industry currently generating $24.9 billion annually and employing 134,000 people. There are both large and small-scale investment opportunities within Michigan’s food processing industry. Given the state’s economic situation, location, diversity and population center access, there is great potential to expand processing.
Merely siting a food processing facility in a community does not necessarily address the long-term economic variables. To ensure growth and sustainability, we must conduct a thorough and extensive review of the proposed facility to ensure the infrastructure is in place, as well as a trained workforce and the capability to deliver goods on a predictable basis.
There are countless reasons why Michigan’s food and agriculture companies should consider exporting their products — one of which is 95 percent of the world’s consumers live outside of the United States. Current projections are that we will have 9 billion people to feed worldwide by 2050. Because of our production capacity, Michigan can certainly play a role in meeting those needs. If a company is only selling in the domestic market, it’s only reaching just a small share of its potential customer base. Through exporting, companies can reduce dependence on existing domestic markets and offset slow sales related to economic changes, consumer demands and seasonal fluctuations.
Our state internationally exports over one-third of its agricultural commodities every year, generating $1.75 billion in economic activity. Agricultural exports help boost farm prices and income, while supporting jobs both on and off the farm in food processing, storage and transportation. This means we export one in every three rows grown in Michigan annually, with our top international export markets being Canada, Mexico, South Korea, China and Taiwan.
More than 60 percent of all Michigan’s agricultural exports go to our number one export market, Canada. Our strong business relationship with Canada, increasing trade volumes and current traffic congestion demonstrate the need for additional capacity with the New International Trade Crossing (NITC).
The NITC will provide a direct freeway-to-freeway connection built by the private sector at no cost to Michigan taxpayers. This project adds capacity to meet long-term food and agriculture demands, provides system redundancy that will prevent traffic disruptions and reduces delays for more efficient trade.
Other states and countries look for Michigan’s food and agriculture products because of our food safety, research and innovation. Michigan producers and processors can trace ingredients back to their sources, preserving product identity through out production and distribution. In addition to cultivating great crops, Michigan develops strong partnerships among government agencies, universities and the business sector. Michigan’s academic and government institutions foster an environment that supports agriculture production, research and development.
There is something we all can do to help our local economy: Buying locally directly supports our farmers, food processors and our state’s economy. Stop by a farmers’ market, and look for Michigan food and agriculture products at your local retailer.
