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Agribusiness stimulates struggling Mich. economy

February 22, 2009

Editor’s note: This article was corrected to fix a factual error.

While Michigan’s overall economy stumbles, one sector is growing at an unprecedented pace.

An MSU study released this month found Michigan’s agribusiness sector increased 12 percent in 2007, the year the data was collected. The number represents more than double the amount of growth in the industry during the previous two years combined.

William Knudson, an MSU professor of agriculture, food and resource economics, said population growth and a resulting growth in food demand is the main reason for the rapid agri-food and agri-energy expansion.

“There are several little reasons for the expansion, but one primary,” he said. “Westernized Eastern countries like China and India have increased their calorie consumptions exponentially since the 1980s.”

The increase in calorie consumption has put added stress on the rest of the world to produce crops and meet increased food needs. Agriculturally rich states such as Michigan are prime places to increase production to meet those needs, Knudson said.

The industry growth in the state shows one of the few bright spots in Michigan’s economy as the auto industry has lost thousands of jobs in the past year.

Agri-foods make up 20 percent of the economy and 25 percent of the state’s work force, said Jennifer Holton, Michigan Department of Agriculture spokeswoman.

“It’s been a force of economic stability here,” she said. “Folks still need to eat. There will always be jobs to make food.”

MSU professor of labor and industrial relations John Beck said there are several in-state companies creating jobs and expanding operations, which will lead to opportunities for unemployed auto workers.

“Gerber, Minute Maid, Post and Kellogg’s, just to name a few staples,” he said. “They offer jobs all over, from farming to manufacturing to retail.”

Gerber recently made the decision to continue operations in Fremont, Mich., and undergo a $75 million expansion, Holton said. The expansion will keep 1,100 jobs in the state, while adding 200 new jobs and more from indirect sources, she said.

“They buy food from 200 Michigan growers and packaging from 11 Michigan suppliers,” she said. “With all these great things going on, the future is bright in Michigan’s agricultural industries.”

The idea of Michigan being an agricultural powerhouse goes back to Henry Ford’s belief that automobiles should be built using only Michigan resources, Beck said.

Other major food companies, like “JIFFY” Mix, Kellogg’s and Yoplait USA, along with beer and wine makers, are maintaining and expanding their holds in Michigan, Beck said.

“There are so many cutting-edge opportunities in this industry,” Beck said. “It should definitely help pick up some of the slack from the growing unemployment.”

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