The U.S. agricultural equipment industry generates over $82 billion in economic activity and is responsible for nearly 250,000 jobs in all 50 states, and industry exports represent a major source of revenue for U.S. manufacturers, according to a study jointly released by three major off-road equipment industry associations.
The study, “U.S. Agricultural Equipment: Powering Jobs and Dollars,” was undertaken by the Association of Equipment Manufacturers (AEM), the Farm Equipment Manufacturers Association (FEMA), and the North American Equipment Dealers Association (NAEDA). The economic consulting firm Global Insight Inc. conducted it. (See http://Agstudy.aem.org)
The study was developed to present to Congress as it prepares to reauthorize the current farm bill, which expires Sept. 30, 2007. Researchers analyzed both the direct and indirect economic activity of the industry as well as sector employment and agriculture equipment exports.
The AEM-FEMA-NAEDA study provides an in-depth look at the entire farm equipment sector, and clearly shows that its economic impact extends far beyond making the equipment used on farms.
“The study outlines how a healthy farm economy boosts the agriculture equipment industry and generates jobs and dollars for rural America,” says Paul Kindinger, President/CEO, NAEDA. “It concludes sound governmental and trade policies, strong cash receipts and limited price shocks are factors in maintaining a healthy farm bottom line for farmers and ranchers.”
According to the study, the agriculture equipment industry directly generates $63 billion in revenue through the two major segments of manufacturing and dealer/wholesale merchandising. When the materials, services and supplies purchased by these segments are included, the overall industry powers over $82 billion of economic activity.
The ag equipment industry employs a highly skilled labor force in both rural and urban communities. Employees working directly and indirectly in the agriculture equipment industry are the recipients of a total payroll of $8.53 billion per year.
“The U.S. agriculture equipment industry not only drives farm productivity, but is an important contributor to the U.S. economy by providing well-paying jobs across the nation,” notes Bob Schnell, FEMA Executive Vice President.
Exports to other countries are an important contributor to the strength of the U.S. agriculture equipment industry, according to the AEM-FEMA-NAEDA study. For example, 2005 exports of $6.2 billion worth of agriculture equipment represented over 30% of the total revenue in ag equipment manufacturing that year. From 2001 to 2005, exports rose 49%, nearly double the increase in total U.S.-manufactured goods.
“It is clear that global trade contributes significantly to the vitality of the agricultural equipment industry in the United States,” says Dennis Slater, President of AEM. “Our industry relies on trade policies that are free and fair if we are to continue to power jobs and dollars domestically.”