This week, I’d like to share some information that came out in a white paper from the UNL Agricultural Economics Department on the special relationship we have here in Nebraska between crops, livestock, and biofuel production capacity not found in other parts of the U.S. to the extent we have here.  It’s called the “Nebraska Advantage”.

I think it’s important for all of ag industry to realize we need each other as it seems we sometimes forget how inter-dependent we are.  Crop producers need the livestock and ethanol industries as they are a high percentage of our end users.  Yet many times I hear of crop producers fighting livestock expansion or livestock coming into an area.  The purpose of the white paper was to share the numbers of where Nebraska livestock, grain production, and ethanol production currently stands, and what Nebraska could gain if we worked to increase livestock production in-state where we have a wealth of resources with our crops, water, and biofuel production.

Nebraska currently ranks 1^st in irrigated acres, 1^st in commercial red meat production and is tied with Texas for cattle on feed, 2^nd in corn-based ethanol production, 3^rd in corn for grain production, 4^th in soybean productions, 6^th in all hogs and pigs, and 7^th in commercial hog slaughter, and 9^th in table egg layers.  However, in reading this white paper, one quickly realizes we’re not taking advantage of the tremendous grain production capacity here in the State.

We export over 1/3 of our annual corn crop, at least half of the in-state production of distiller’s grains (a co-product from ethanol production that is fed to livestock), and more than 80% of our soybean meal output.  Corn and soybean production have increased in our State by 50 and 25% respectively, which is a blessing due to our irrigation capacity.  But increasing amounts of this grain are being shipped out-state instead of benefiting rural economies in Nebraska if it was used in-state for value-added livestock production and processing instead.

In the white paper, graphs are shown comparing Nebraska to neighboring states.  These graphs show Nebraska lagging neighboring states in growth of the livestock industry.  For example, while Nebraska overall increased in hog production, the inventory increased 17.2% during the first half of the decade, but declined 11.8% in the second half.  In comparison, Iowa realized an increase of 31.5% within the decade.  What was really interesting to me is the fact that Nebraska exports 2.5 million pigs annually to neighboring states to be finished and shipped back to Nebraska for processing, showing potential for growth in the market hog sector.  The dairy sector has also declined in herd numbers in Nebraska compared to other states and Nebraska’s poultry industry (mostly egg laying hens) has declined over the past decade in spite of constant numbers across the U.S.

When one looks at Nebraska’s economy, cash receipts from all farm commodities totaled over $25.6 billion in 2012 and livestock/livestock product sales was 45% of this total ($11.6 billion).  Increased employment, local tax revenue, value-added activity, and manure for fertilizer are all economic benefits of livestock expansion.  The paper stated,

A base expansion scenario that includes a 25% increase in market hogs, a doubling of dairy cow numbers, a ten percent increase in fed cattle production and a tripling of egg production, along with the associated processing industries, has the potential to provide an additional 19,040 jobs, with labor income of almost $800 million and value-added activity of over $1.4 billion. This activity has the potential to generate over $38 million in local tax revenue. While this amounts to a fairly small percentage of Nebraska’s total economy, these impacts will occur almost entirely in non-metropolitan areas of the state and would be quite beneficial to rural economies.

Livestock development has been held back by various issues and policies including:  limitations on corporate farming activity in Nebraska, state and local permitting processes, nuisance roles and lawsuits, and issues/concerns from the general public and interest groups.  The final conclusion of the paper was that significant growth in employment and economic output throughout Nebraska is dependent upon these issues being overcome.

I would challenge all of us to keep an open mind when producers desire to diversify by including livestock in their operations or through livestock expansion.  In many cases, doing so allows another person to come back to an operation, or allows someone to get started farming, which in the long run benefits our rural economies.  It’s ok to ask questions, to become more educated.  It’s through these questions that one learns how production practices have changed to ensure the health and welfare of our livestock and in odor reduction from the facility and manure application.  You can read the entire white paper contents here.