An economic impact study of Premium Standard Farms (PSF) and Farmland Foods has been completed by the Commercial Agriculture Program, University of Missouri Extension.
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Using an economic input-output model, IMPLAN, the authors determined the combined economic impact of PSF and Farmland Foods to the state of Missouri to be $1.1 billion annually. IMPLAN is an economic input-output model originally developed at the University of Minnesota in the 1980s.
"We funded this study to be able to communicate what agriculture industries contribute to Missouri’s economy," said Rex Ricketts, director of the University of Missouri Extension Commercial Agriculture Program.
Commercial Agriculture Program economists Seanicaa Edwards, Ray Massey and Ryan Milhollin analyzed the impacts of PSF and Farmland Foods on several geographic regions. First, counties with PSF and Farmland production facilities were evaluated. Next, the regions were expanded to include the adjacent counties where many of their employees resided and were expected to spend their income. Also taken into consideration was the expectation that PSF and Farmland Foods will purchase supplies in surrounding counties. Finally, the authors analyzed the contributions that the two businesses provided to the entire state of Missouri.
The economic impact study indicated that PSF and Farmland Foods were significant contributors to the economic vitality of Missouri, particularly north-central Missouri. PSF is a vertically integrated firm that focuses on pork production and is currently headquartered in Princeton. IMPLAN results indicated that PSF’s annual revenue of $265 million had a total economic impact of $382 million on the state of Missouri, $313 million of which could be attributed to PSF’s primary production region of north-central Missouri.
Two models were run for Farmland Foods. One model represented Farmland Foods’ slaughter facility in Sullivan County. The second model represented Farmland Foods’ ham processing facility in Jackson County. Farmland Foods’ (Sullivan County) annual revenue of $425 million had a total economic impact of $601 million to the state of Missouri of which $469 million was generated in Sullivan County alone. Farmland Foods’ (Jackson County) annual revenue of $100 million had a total impact of $142 million on the state of Missouri, of which $133 million could be attributed to ham production in Jackson County.
Tax receipts in 2009 indicated that PSF and Farmland Foods paid more than $3.6 million annually in property taxes. Of these annual receipts, more than $1.9 million supported 22 school districts in eight counties where 124,750 students (K-12) were educated. Mercer and Sullivan counties received $830 and $603 per student, respectively. The two counties received the highest amount of property taxes because most PSF farms were clustered in Mercer County, while Sullivan County housed the Farmland Foods slaughter facility. Gentry, Daviess and Putnam counties received more than $100 per student from PSF property taxes paid. For reference, a home that cost $149,000 in Gentry County incurred approximately $1,115 in property taxes, equaling about 51 cents per student. PSF paid approximately 200 times more in funding per student.
Other considerations factored into the analysis were employment in the counties where PSF and Farmland Foods operate and the counties where the employees spend their income. The study credited the two businesses with sustaining more than 5,200 jobs in the state of Missouri. The Commercial Agriculture economists concluded that PSF and Farmland Foods provide valuable resources to local communities where employees and production facilities are located.
The complete economic impact study is available online at http://agebb.missouri.edu/commag/resources/ or by contacting the lead author, Seanicaa Edwards, at 573-882-9893 or [email protected].