Meat industry contributes $832 billion to U.S. economy

by MEAT&POULTRY Staff
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WASHINGTON — Together, the meat and poultry packing and processing industries, including hide and skin production and offal processing, contribute $832 billion, or nearly six percent of the U.S. gross domestic product, according to a new study made by economist John Dunham that was supported by the American Meat Institute.

Moreover, the industry directly employs 1.8 million people, pays $45.5 billion in wages and benefits as well as more than $81 billion in taxes. The industry, in one way or another, touches on all 509 sectors of the U.S. economy, according to the report, as it contributes 5.8 percent to GDP. During a teleconference today, Mr. Dunham said his data, which was drawn from sales figures less taxes paid plus wage data, is accurate through the first quarter of 2009. The study required three months to complete.

Patrick Boyle, president of AMI and who also participated in the teleconference, said that to the best of his knowledge, a study of the magnitude of the Dunham report has not ever been made before of the meat industry. He said he was surprised to learn that the industry his organization represents in part contributes such a significant portion to the national economy.

In a prepared statement, Boyle commented: "Companies and individuals in America that produce, process, distribute and sell meat and poultry products continue to be a vital part of the U.S. economy. During this uncertain economic climate when we are experiencing the highest unemployment rate in 25 years, every job is important. Our industry can be proud that we provide millions of quality jobs in every state and every sector of the U.S. economy."

At the conference Boyle said the study’s data will be used "as an added value in our lobbying efforts," and will help introduce members of Congress to the industry’s economic impact "with real dollars." The study comes at a time when the meat and poultry industry is trying to push back against a proposal by the Environmental Protection Agency to raise the allowable limit of corn-based ethanol in gasoline from 10 percent to 15 percent. In two studies released earlier in the week, consultants Tom Elam and Bill Lapp showed that raising the limit could significantly raise the price of corn and thus of livestock feed, which would have a negative effect on the meat and poultry industry.

During the teleconference, Boyle agreed that the industry’s economic impact could potentially shrink due to economic problems in the livestock sector.

We’re in a period of national shrinking herd sizes. Shrinking herds put pressure on packing and processing capacity and on pricing," he said. "There’s a close alignment between a healthy livestock sector and a healthy packing and processing sector. The bottom line is, economic impact will shrink under this scenario" of shrinking herd sizes. A summary of the new Dunham study can be downloaded at: www.meatfuelsamerica.com.

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