Agriculture and food processing in Wisconsin had $116.3 billion in industrial revenues in 2022, with the food and beverage industry dominating the sector.
That’s according to UW-Madison’s Contributions of Agriculture to the Wisconsin Economy report, authored by economists economists and Profs. Steven Deller and Jeff Hadachek. It was produced by the university’s Department of Agricultural and Applied Economics.
Gov. Tony Evers and DATCP Secretary Randy Romanski yesterday touted the report’s findings, noting the overall impact figure has increased 11% since 2017 and represents 14.3% of Wisconsin’s total economic output for 2022. In a statement, Evers said the state’s farmers, producers, ag industries and rural communities “are such an important part of our state’s heritage and tradition as well as our economy and our future.”
The higher impact comes as fewer farms but more food and beverage processors are operating in the state, report authors wrote. The number of farms dropped from 64,793 to 58,521 between 2017 and 2022 — the latest year for which data are available — while food processors rose from 1,160 to 1,245 over the same period.
At the same time, employment for the sector declined 19.1% from 437,700 jobs in 2017 to 353,900 jobs in 2022,. Labor income fell 5.5% over that time to $21.2 billion, while total income rose from $37.6 billion to $37.78 billion.
Of the $116.3 billion figure, on-farm activity contributes $30.5 billion to industrial revenue, or 3.7% of the state’s total. It supports 143,690 jobs, provides $6.4 billion in labor income and $13.7 billion to total income.
Meanwhile, food and beverage processing contributes $107 billion, or 13.1% of the state’s total for industrial sales and revenues, and supports 298,400 jobs, the report shows. It provides $18.7 billion in labor income and $32.4 billion in total income.
Report authors note both on-farm activity and food processing are “relatively diversified,” noting this “helps protect the Wisconsin food processing industry from outsized shocks to any one part” of the industry.
“While dairy processing (i.e., cheese) and animal processing (slaughtering) accounted for more than half (51.5%) of employment in the food processing sector, food processing in Wisconsin has a wealth of diversity including breweries, distilleries, and wineries,” authors wrote.
Because dairy bridges both parts of the sector, the report includes a separate breakdown of its economic impact. Both on-farm activity and dairy processing, which is “dominated” by cheese production, collectively contribute $52.8 billion to the industrial revenue total, or 6.5% of the state’s total. It supports 120,700 jobs and provides $7.9 billion in labor income and $13.7 billion in total income.
The report also explores the environmental impacts of these industries, with the broad “all agriculture” category contributing 17 million metric tons of CO2 equivalent in greenhouse gas emissions in 2022, or 14% of the state’s total emissions.
Report authors acknowledged agriculture’s role in both the state’s economy and its culture, touting Wisconsin’s “considerable comparative advantage” in certain ag sectors such as dairy, grains and vegetables. Still, the report outlines “key challenges” defining the changing industry, as on-farm economic activities decline and contribute less to the state economy over time.
“With this trend, income from on-farm activity has grown smaller and more people have transitioned out of the industry,” they wrote. “But at the same time, food processing in its many unique forms has grown in economic importance … Looking forward, a central challenge is identifying these opportunities to capitalize on this shift and discovering ways for both on-farm activities and food processing to best complement each other.”
