By SHELLY STRAUTZ-SPRINGBORN
Michigan Correspondent

LANSING, Mich. — Reports recently released by Michigan State University and the Michigan Department of Agriculture (MDA) explore the economic impact of the state’s food processing industry.

Of the nearly 134,000 Michigan jobs it provides, 40,828 are in that sector and the others are jobs resulting from the impact of food processors.

Researchers reported that employment “appears to be holding steady,” and noted the total number of jobs include full- and part-time positions.

The state boasts 1,588 licensed food processors. Of those, 963 are small processors with less than $25,000 in annual gross sales. Michigan Agricultural Processing Renaissance Zones, which encourage economic development by making the select areas virtually tax-free at the state and local levels, have created 1,558 new jobs and generated $742 million in new capital investment in agricultural processing businesses.

Michigan is ranked 19th nationally in food processing. The state has a diversified portfolio of food processors, including such well-known names such as Kellogg’s, Michigan Sugar and Leprino.
According to the report, Michigan’s fluid milk and butter manufacturing processors top the list of employers, with 16,785 workers.

Fruit and vegetable canning, pickling and drying was ranked second with 15,976 employees, followed by the state’s breakfast cereal manufacturing industry, which employs 14,628 workers.
Rounding out the top five are bread and breakfast product manufacturing, with 12,872 workers, and soft drink and ice manufacturing, with 12,286 employees.

Small-scale employers included distilleries, pet food manufacturers, flavor syrup and concentrate manufacturing, tortilla manufacturing, non-chocolate confectionery manufacturing and seafood processing, adding another 1,875 jobs.

In addition, the state has a well-developed fruit and vegetable processing sector. Researchers noted “this diversity is likely a function of the wide range of crops produced in the state.”
Agriculture is Michigan’s No. 2 industry, contributing $71.3 billion annually to the economy. The state produces more than 200 diverse products and is ranked as having the second most diverse variety of crops of any state, behind California.

While the state is only ranked No. 8 in the nation for milk production, it is the top ranked Michigan commodity in terms of cash receipts. In 2009, the state’s dairy industry contributed about 20 percent of the total cash receipts in Michigan’s agriculture.
From 2005-09, the state’s total dairy farm receipts averaged $1.2 billion. Overall, the dairy industry has a $5.9 billion annual impact on the state’s economy.

Michigan ranks No. 1 in the nation in potato chip production. Statewide, 90 potato farmers grow about 40,000 acres of potatoes with an estimated annual value of $156.2 million.

Dry beans also tops the charts nationally, with Michigan ranked first for production of small red beans, cranberry beans and black beans, and second for navy beans. Nationally, Michigan ranks second for production of all beans. About 12.5 percent of the U.S. production this year was grown on 230,000 acres of Michigan farmland.

The state’s pork industry generates $250 million in annual sales, and producers support $400 million in gross state product, exporting 28 percent of state’s pork. The pork industry also provides 700 Michigan jobs, or $30 million in personal income, and generates another 5,300 pork-related jobs in the state.
Other top commodity areas include apples, asparagus, beef, carrots, cherries and corn.

With growth in various commodity fields, Michigan’s food processing sector has also shown strong growth between 2002-07, expanding by nearly 20 percent in terms of direct (in-sector) impact, representing a compound annual growth rate of 3.7 percent, according to the researchers’ findings.

Global diversity is also a bright spot for food processors. Michigan exports more than one-third of its agricultural commodities every year, generating an estimated $1.55 billion in economic activity and employing more than 19,000 of the state’s residents.

In 2009, 43 Michigan companies made a first-time export sale in a new market. MDA Director Don Koivisto said all of this is good news, as the state continues to struggle with record unemployment and an ailing budget.

“Michigan food processors play a substantial role in supporting the state’s economy and have the potential to be instrumental in diversifying our economic base while creating new jobs,” Koivisto said.

“With continued investment and policy support, there is tremendous opportunity for both small- and large-scale operations to grow and expand the food processing industry in Michigan.”