2017 Data Overview
U.S. agricultural exports support output, employment, income, and purchasing power in both the farm and nonfarm sectors. Despite an appreciation of the U.S. dollar in real terms relative to the currencies of its trading partners, U.S. agricultural exports rose 2.6 percent to $138 billion in calendar year 2017, supported by faster growth in world real gross domestic product (GDP). ERS estimates that, in 2017, each dollar of agricultural exports stimulated another $1.30 in business activity. Thus, the $138 billion of agricultural exports in 2017 produced an additional $179 billion in economic activity, for a total economic output of $317 billion. Every $1 billion of U.S. agricultural exports in 2017 required approximately 8,400 American jobs throughout the economy. Agricultural exports in 2017 required 1,161,000 full-time civilian jobs, which included 795,000 jobs in the nonfarm sector. The agricultural export surplus helped to offset some of the nonagricultural trade deficit.
Trade has always been important to U.S. farm and rural economies, from early colonial days when tobacco and cotton were the most important export commodities to today’s massive exports of grain, oilseeds, and processed foods. Even though farming today accounts for a relatively small share of U.S. GDP, U.S. agricultural trade still significantly contributes to the overall U.S. economy, with impacts felt worldwide. As the world’s economies become more integrated, global trade and the links between countries grow ever deeper. Trade agreements, in tandem with increased productivity and higher incomes, have expanded agricultural trade with developed and developing countries and, in turn, have created growth opportunities for U.S. agriculture. Trade agreements that lower trade barriers to agricultural trade potentially create demand for U.S. agricultural commodities in foreign markets. This demand would be satisfied with purchasing power partly acquired by the ability of foreign nations to increase sales of other products to the U.S. market.
At $138.2 billion in 2017, U.S. agricultural exports were 2.6 percent higher than the previous year’s level but well below the record set in 2014 (about $150 billion). In 2017, the U.S. dollar appreciated in real terms relative to the currencies of its trading partners, though to a substantially smaller degree than in 2016. Faster growth in world real GDP bolstered foreign demand for U.S. agricultural exports. World real GDP growth in 2017 was an estimated 2.88 percent, about half a percentage point above the 2.38 percent expansion achieved in 2016. Economic growth in such regions as Asia, the Middle East, the European Union (EU-28), Mexico, and Canada was supportive of foreign demand for U.S. exports. In South America, macroeconomic growth turned positive in 2017 (0.46 percent) after two consecutive years of contraction.
The U.S. dollar strengthened against the world average of all its trading partners, making U.S. products somewhat less competitive, but not by enough to prevent agricultural exports from rising in 2017. Relative to the rest of the world, the dollar appreciated in real terms by 0.16 percent in 2017. For the NAFTA countries, the U.S. dollar depreciated in real terms against Canada (2.43 percent) and Mexico (3.12 percent). Although the U.S. dollar depreciated 0.33 percent in real terms against the average of South American currencies, the dollar weakened much more substantially relative to the currencies of Brazil (8.13) and Argentina (10.32). The U.S. dollar strengthened in real terms against China (2.93 percent) and Japan (3.7 percent). The U.S. dollar rose 3.94 percent relative to the average of Middle Eastern currencies but was almost unchanged against the EU-28, appreciating only 0.09 percent.
In 2017, the United Stated exported $20.6 billion of U.S. agricultural goods to Canada, surpassing China’s total of $19.5 billion. Together with Mexico and Japan, these four countries have accounted for at least 50 percent of U.S. agricultural exports since 2002. U.S. consumers continued to demand a wide variety of imported goods in 2017, and U.S. agricultural imports were the highest ever at $121.0 billion. U.S. agricultural imports from Mexico totaled $24.6 billion in 2017 (up from $22.9 billion in 2016)—accounting for about one-fifth of all U.S. agricultural imports. Together, Canada, Mexico, and the EU-28 supplied roughly 57 percent of all U.S. agricultural imports in 2017.
Impacts of Agricultural Trade in 2017
The impacts of agricultural trade on the U.S. economy change from year to year. Factors beyond just the total value of exports affect ERS estimates of the trade multipliers. Changes in the composition of the agricultural export “basket” lead to differing direct and indirect impacts on the economy. Productivity growth tends to reduce the size of the trade multipliers—increases in labor productivity imply that the same output can be produced with a smaller workforce or that more output can be produced with the same size workforce. The structure of the U.S. economy also changes over time, influencing the domestic impacts of agricultural exports. Productivity growth rates, as well as the value and commodity composition of agricultural exports, are updated every year when developing annual estimates of the trade multipliers. In contrast, information on the changing structure of the U.S. economy is not available on an annual basis and hence is updated every several years. With the release of the Bureau of Economic Analysis’s 2007 Benchmark Input Output (I/O) accounts, the ERS agricultural trade multiplier (ATM) model was rebased to incorporate the most recently available set of interrelationships between the various sectors of the U.S. economy. This model has been used to estimate the trade multipliers for calendar years 2013 onward.
In calendar year 2017, the $138.2 billion of U.S. agricultural exports produced an additional $179.2 billion in economic activity for a total of $317.4 billion of economic output (see table: U.S. economic activity supported by agricultural trade, 2017). Agricultural exports also supported 1,161,000 full-time civilian jobs, including 795,000 jobs in the nonfarm sector. Farmers’ purchases of fuel, fertilizer, and other inputs to produce commodities for export spurred economic activity in the manufacturing, trade, and transportation sectors. (For information on how the data are derived, see Documentation.) Because the increase for agricultural imports was more than that for exports in 2017, the direct contribution of agricultural trade to the U.S. economy decreased from $20.2 billion in 2016 to $17.2 billion in 2017.
Of the $138.2 billion in direct U.S. agricultural exports in 2017, the value of exported raw products, excluding the supporting activity provided by the farm sector, was $47.7 billion, compared with $29.4 billion for processed commodities and $61.1 billion for manufacturing, transport and trade, and other services. The $179.2 billion of supporting or indirect activity generated by agricultural exports in 2017 included activities required to facilitate the movement of exports to their final destination (e.g., computer and financial services, warehousing and distribution, packaging, and additional processing). The 2017 results reflect the significant role of the services, transportation, and trade sectors, which generated $86.5 billion of the total $179.2 billion in indirect activity. At $21.3 billion in 2017, supporting activity in the farm sector is above the prior year ($20.1 billion). The farm sector’s $68.9 billion of output associated with agricultural exports is the sum of the value of exported raw products plus supporting activity in the farm sector.
The number of jobs required to facilitate total exports of agricultural commodities has been volatile (fig. 2), reflecting short-term price changes, the shifting composition of exports, and longer-term changes in productivity and economic structure. After falling for several years, employment supported by total agricultural exports began to trend upward in 1999, with some fluctuations around that trend.
In 2017, employment required to produce, transport, and service agricultural exports totaled an estimated 1,161,000 full-time, civilian jobs. Of these jobs, approximately 366,000 were farmworkers. In 2017, 795,000 jobs in the nonfarm sector were involved in assembling, processing, distributing, and servicing agricultural products for export, an increase of approximately 31,000 over the prior year (numbers may not add up exactly due to rounding). About 79,000 of those 795,000 nonfarm jobs were in food processing; 325,000 were in other manufacturing sectors; and 391,000 were in services, trade, and transportation.
Bulk exports (defined as soybeans and other oilseeds, wheat, rice, corn and other feed grains, tobacco, and cotton) have a proportionally smaller effect on the nonfarm economy than nonbulk (processed or high-value) exports (fig. 3). Bulk exports valued at $46.0 billion produced an additional $54.6 billion of business activity (i.e., each dollar of bulk exports generated $1.19 of additional output). Nonbulk exports of $92.2 billion stimulated an additional $124.6 billion of business activity (i.e., each dollar of nonbulk exports generated $1.35 of additional output). For total agricultural exports (bulk and nonbulk), each dollar of exports produced an additional $1.30 of business activity.
For bulk exports, $33.3 billion (or about 61 percent) of the additional business activity took place in the services, trade, and transportation sectors, while only 0.5 percent occurred in food processing. In comparison, the shares of additional business activity generated by nonbulk exports were 6.2 percent in food processing and 42.7 percent in services, trade, and transportation.
In 2004, the job numbers supported by nonbulk exports (trending up) and those supported by bulk exports (trending down) began to diverge (fig. 2). Of the 1,161,000 jobs related to U.S. agricultural exports, 731,000 (63.0 percent) supported nonbulk exports in 2017 (up from 679,000 or 61.9 percent in 2016). The number of jobs related to bulk exports rose to 429,000 in 2017, a 2.8-percent increase over the prior year. The number of jobs related to nonbulk exports rose by 7.7 percent to 731,000 in 2017. Nonbulk commodities account for the majority of U.S. agricultural exports and continue to support the majority of jobs supported by agricultural exports.
In terms of employment growth, sectors outside of farming have been the major beneficiaries of agricultural exports in the past dozen years. Starting around 2004, we observe a divergence between the estimated numbers for farm and nonfarm jobs (fig. 4), with the latter accounting for a rising share of total employment supported by agricultural exports. Although the number of farm jobs then stabilized with a slight upward trend, nonfarm jobs were roughly double the number of farm jobs from 2007-17. This growing importance of nonfarm jobs is consistent with the upward trend in the job numbers supported by nonbulk exports noted earlier in fig 2. Thus, the composition of agricultural exports (bulk versus nonbulk) influences not only the total number of jobs but also the distribution of employment between farm and nonfarm sectors of the economy.
Accounting for the Impacts of Agricultural Imports
Data limitations prevent us from assessing the impact of imports in the same way that we assess that of exports. It is not currently possible to measure the total economic activity associated with imports because no end-use data on imports are available. When imports enter the United States, their value is recorded. After that, they are no longer tracked as imports but instead enter the general domestic economy to be used in the same fashion as domestically produced goods.
The end use of a product determines its multiplier effects. Imports can be put into inventory (an almost negligible multiplier) or used in a highly processed product (a very large multiplier). Thus, without end-use data, the indirect or supporting impacts of actual agricultural imports cannot be measured in terms of output, employment, or value added, or as a multiplier. Only the value of imports as measured upon entry into the United States can be discerned (direct effects).
Imports can be assigned an economy-wide, domestic business multiplier between 2.00 and 2.50 based on the generally held view that the activities associated with “absorbed” imports are the same as those associated with any other domestic commodity. After adjusting for inflation from the benchmark year (2007) to 2017, the average output-weighted domestic business multiplier in 2017 for all U.S. business can be estimated as 2.148.
To illustrate this point, consider that almost all fish products consumed in the United States are imported. If reliable statistics on consumers’ demand for and consumption of fish were available, the supporting activity required to deliver imported fish could be measured. But this would be only part of the contribution of fish imports to the economy because fish are also turned into meal and feeds, processed products, pet foods, and other uses not related to direct human consumption. These uses become intertwined with domestic production. Finally, to measure outputs from fish imports fully, researchers would also have to separate the movement of imported fish products from the small but growing amount of products from domestic farm-raised fish.
Because of these data limitations, the economic impact of imports described here is the value of imported products as if they were produced in the United States and then assigned the value of that activity as a theoretical loss of economic activity to the United States. The only actual “loss” to the U.S. economy that can be measured is the actual value of agricultural imports.
When valuing output associated with imports in the U.S. economy, we calculate a theoretical loss of economic activity from imports equal to the value of the product if it were to be produced here. Many U.S. agricultural imports, such as coffee, bananas, and cocoa, have few (if any) counterparts in U.S. agricultural production; these commodities simply are not produced in substantial quantities in the United States. While the purchase of these imports does represent a loss in income to the U.S. economy equivalent to their value at the border, it does not represent a loss in production or supporting activities.
Impacts of Agricultural Imports on U.S. Output
U.S. agricultural imports equaled about $121.0 billion in 2017. If these imports had been produced domestically, the effect on domestic output would have been about $260 billion, computed by multiplying imports ($121.0 billion) by the domestic business multiplier (2.148). As is the case with exports, moving imported products to consumers supports jobs in the data processing, financial, legal, management, administrative, marketing, and transportation sectors. Each dollar spent on agricultural imports in 2017 would have required another $1.148 in supporting goods and services had those imported items been produced domestically.
Overall Impacts of Agricultural Trade
U.S. agricultural trade had a positive effect on all sectors of the economy in 2017. The farm sector’s $68.9 billion of output associated with agricultural exports more than offset the $39.6 billion of farm output implicitly lost because of agricultural imports. The U.S. economy gained a net $57.5 billion in output (after the theoretical loss to agricultural imports is considered). Outside of farming and food processing, the United States gained $29.7 billion in total output in 2017 from trade in agricultural goods not classified as farm or processed food products (pharmaceuticals and adhesives, for example). The United States had a net loss of $6.9 billion from direct agricultural trade (exports minus imports) in these nonfarm, nonprocessed categories.
Total Jobs Required Per Billion Dollars of Agricultural Exports Increase in 2017
In 2017, approximately 8,400 workers were needed to deliver $1 billion worth of agricultural exports, an increase from the 8,100 workers per billion required in 2016.
Most high-value and processed products require more total labor than do bulk farm products. This means that in years when nonbulk commodities, composed of high-value products and other types of products that require special handling, are the major share of the export basket, jobs supported by exports are higher. Per billion dollars of exports, nonbulk commodities typically support more jobs than bulk commodities. However, in some years, the opposite is true. The volume (quantity) of exports largely determines overall labor requirements. The farm sector is the single-largest generator of jobs related to agricultural exports. When farm prices are low, customers buy larger amounts of bulk grains and oilseeds. Jobs are supported on the farm and in the supporting transportation and distribution industries, but job growth by passes the processing and manufacturing sectors. In situations where the prices and value of bulk commodity exports are low and the volume exported is high, bulk commodities may support more jobs per billion dollars of exports than nonbulk commodities. This was the case from 1998-2006 and more recently as well. In 2017, 9,340 workers were needed to deliver $1 billion worth of bulk agricultural exports, versus 7,930 workers for nonbulk exports.
According to USDA’s National Agricultural Statistics Service (NASS), prices received by farmers for most major commodities changed little between 2016 and 2017. After a substantial (23 percent) downturn in 2016, prices of food grains registered a relatively small increase of about 5 percent in 2017. Oilseed prices, which fell 1.5 percent in 2016, also failed to recover fully in the following year with an increase of about 0.1 percent. Cotton prices advanced by only about 2.8 percent in 2017, after falling 5.7 percent in the prior year. Prices of feed grains decreased for two consecutive years (6.5 percent in 2016 and 3.6 percent in 2017). In contrast, for the fruit and nut category, the downturn in prices in 2017 was relatively modest (1.2 percent), and prices actually had increased by 4.8 percent during the previous year.
The jobs per $1 billion of exports grew in 2017, and the total employment supported by U.S. agricultural exports also increased, from 1,097,000 in 2016 to 1,161,000 in 2017. Nevertheless, the overall pattern is that the number of jobs per billion dollars of U.S. agricultural exports has trended downward over time. While the number of jobs supported in 2017 is nearly identical to that in 1983, the export value required to sustain this number of jobs has increased. ERS estimates for 1983 indicate that $38 billion of agricultural exports supported 1.1 million jobs that year, a multiplier of 29,000 jobs per billion dollars of exports (Foreign Agricultural Trade of the United States, 1984). In 2017, over $138.2 billion of exports were required to support the 1,161,000 jobs. Because of price changes, increased productivity, and structural and technological advances in the intervening years, the number of jobs per billion dollars of exports declined to approximately 8,400 workers in 2017.
|Item||2015 / Total||2016 / Total||2017 / Total||2017 / Bulk||2017 / Nonbulk|
|Economic activity generated by agricultural exports||302.5||306.8||317.4||100.6||216.8|
|Services, trade and transportation||96.2||98.9||98.9||43.2||60.6|
|Agricultural trade balance||19.5||20.2||17.2||42.4||-25.2|
|Services, trade and transportation||78.4||82.02||86.5||33.3||53.1|
|Nonfarm share of supporting economic activity||87||88||88||91||87|
|Export multiplier (additional business activity generated by $1 of exports)||1.27||1.28||1.30||1.19||1.35|
|Employment generated by agricultural exports||1067||1097||1161||429||731|
|Services, trade and transportation||384||394||391||187||204|
|Employment per billion dollars of agricultural exports||8.016||8.141||8.400||9.340||7.931|
|Domestic equivalent of economic activity generated by agricultural imports||244.6||246.3||259.8||8.9||251.0|
|Services, trade and transportation||75.0||75.4||82.2||4.2||78.0|
|Net domestic equivalent of total output gain or loss to agricultural imports||57.9||60.5||57.5||91.7||-34.2|
|Services, trade and transportation||21.2||23.5||21.7||39.0||-17.3|
|Nonfarm, nonfood processing sectors:|
|Net direct benefit from exports||-2.1||-3.6||-6.9||9.0||-15.8|
|Net increased output from exports||28.9||30.8||29.7||44.5||-14.8|
|Farm share of total income from exports||19||20||20||29||15|
|Trade and transportation share of total income from exports||5||5||5||3||6|
|Source: U.S. Department of Agriculture, Economic Research Service, Agricultural Trade Multipliers.
Updated November 2018.
 Due to rounding, figures in the text do not always compute exactly to those in table.
 Raw product exports exclude supporting activity provided by the farm sector. Raw products include both bulk and higher-value products.