New Study Shows Livestock Production Has $616 Million Economic Impact in Phelps County Economy

1 Sep 2019

Livestock production creates a $616 million economic impact and is responsible for providing all or part of 1,500 jobs in Phelps County, according to a recent study.

While local economic development officials always knew Phelps County had a strong agricultural sector, the study shows a fuller picture and the breadth of the county’s production, and it provides guidance for future development.

“We are well positioned to add diversity of production as well as expand what we have,” said Ron Tillery, Phelps County Development Corporation’s Executive Director. “We need to be prepared for it and plan for it. This information gives us something to start with.”

Nebraska Public Power District Economist Brian Williams, Ph.D., prepared the study based on figures recently released in the 2017 Census of Agriculture.

The report showed that livestock production, mainly cattle, has an overall $616,054,519 economic impact in Phelps County.

“How would we react to a new industrial prospect that would create a $600 million impact on our county?” Tillery said. “I think we would be excited about that!”

The report also provided additional details on business sectors that are impacted by the industry, including medical care, retail and utilities. It showed that livestock production has a $7.6 million economic impact on the local hospital, a $2.5 million impact on restaurants and a $1.6 million impact on motor vehicle sales and parts dealers.

According to the ag census statistics, Phelps County sold $578.2 million in agricultural products (crops and livestock) in 2017. This averaged out to $1.5 million per farm, which ranks Phelps County first among Nebraska’s 93 counties for per farm value of products sold. Of the $578.2 million in agricultural sales in 2017, livestock generated $406 million.

As far as jobs, the report estimated 428 employees in Phelps County are directly employed in raising livestock. An additional 964 employees are indirectly employed to support livestock production resulting in a 1,498 jobs benefiting from livestock production in Phelps County.

Local ag producer and PCDC Board Member Reed McClymont said he was not surprised by the report’s findings, and he always knew Phelps County ranked high in ag production. He said that a key to future growth is focusing on these strengths.

“I think the report shows that we’ve got a livestock mentality in Phelps County in addition to having a lot of top-notch grain operations, so we need to, in my opinion, play on those strengths,” McClymont said. “Hopefully, we can attract some other livestock businesses to the county.”

Tillery said these numbers demonstrate to livestock-related processing companies the scope of the industry in our county and region. He agreed that growth should be encouraged in this area of local expertise.

 “We should play to our strengths when it comes to economic development,” Tillery said. “We should do whatever we can to improve conditions that affect existing or future operations including the regulatory environment. Like all industry, this is an evolving business sector and Phelps County should be at the cutting edge to promote responsible livestock development.”

Tillery said the report may be interesting to existing operators regarding their place in the market so they can make informed decisions about their growth and future investments. He also mentioned the value to other “main street” businesses that rely on livestock operators as customers and other civic leaders in Phelps County.

“I think there are some policy issues that we need to look at as a county to be sure we are well prepared for expansion by existing operators or new operations that are interested in our area,” Tillery said.
“There’s room for growth. We need to protect and nurture this important business sector, and we need to grow responsibly.”

The dairy industry, and possibly poultry, are two areas where Tillery said he sees opportunity for growth.

McClymont said dairy is a livestock segment that could be “real attractive” for local ag producers. Dairies need products like corn and alfalfa, which would add value to products local farmers are already producing.

Tillery said he also sees opportunities as major food suppliers look for alliances with ag producers, such as the Costco-Lincoln Premium Poultry project in Fremont. Food industry trends point to more development of this kind that is often called vertical integration.

Tillery said meat-processing operations will likely gravitate to larger population centers due to a need for greater numbers of available workers, but he went on to say companies that use agricultural byproducts, such as pet food companies, may provide opportunities for growth.

“There are multiple livestock related growth opportunities in front of us. We must be ready. And, we must be willing to provide visible support and encouragement to the risk takers and investors,” Tillery concluded.