2019 Data Overview
Errata: On July 28, 2021, the Agricultural Trade Multiplier Data Product was revised to incorporate corrected multiplier estimates for the ethanol sector and the 2019 Data Overview was updated to reflect these changes.
U.S. agricultural exports support output, employment, income, and purchasing power in both the farm and nonfarm sectors. In calendar year 2019, U.S. agricultural exports totaled $141.2 billion. The Agricultural Trade Multiplier (ATM) model prepared by USDA’s Economic Research Service (ERS) estimates that each dollar of these exports stimulated another $1.14 in economic activity in the United States in 2019 (using a model that approximates these exports at $141.6 billion due to its inclusion of biodiesel as an agricultural product). Thus, the $141.6 billion of agricultural exports produced an additional $161.4 billion in economic activity, for a total economic output of $303.0 billion. Every $1 billion of U.S. agricultural exports in 2019 required approximately 7,784 full-time civilian jobs throughout the economy. U.S. agricultural exports in 2019 required a total of 1,102,000 such jobs, including 607,000 jobs in the nonfarm sector. Throughout this webpage, the word "jobs" refers to full-time civilian jobs, as measured in full-time equivalents (FTEs). An FTE is a conversion of the number of hours worked to an equivalent number of full-time positions; for its ATM model, ERS uses a ratio of 2,080 hours per year per FTE.
The Importance of Agricultural Trade
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 diverse range of exports across multiple product categories. Grains, oilseeds, and animal products are currently among the most prominent product categories within U.S. agricultural exports. Even though farming accounts for less than 1 percent of U.S. gross domestic product (GDP) today, U.S. agricultural trade still contributes to U.S. economic activity in sectors other than farming, with impacts felt worldwide. In tandem with increased productivity and higher incomes, trade agreements have expanded agricultural trade with both developed and developing countries and, in turn, have created growth opportunities for U.S. agriculture. Trade agreements that lower barriers to agricultural trade potentially create demand for U.S. agricultural commodities in foreign markets. This demand would be satisfied with rising purchasing power in those economies, partly acquired by the ability of foreign nations to increase sales of their products to the U.S. market.
One way in which agricultural trade is essential is that it generates employment—for more than farmers, ranchers, and growers. Many others depend on agricultural trade for their jobs, including the people who process, transport, and market agricultural output and those who manufacture, transport, and market the inputs used in farming. The number of jobs supported by U.S. agricultural exports depends on various factors, such as the quantities of products sold abroad and the quantities of labor required to produce, process, market, and transport those products. In turn, these quantities depend, in part, on the prices of exported products. The quantity supplied of the export and the quantity of labor demanded tend to rise with the product’s price, and the quantity demanded of the export tends to fall when its price rises. Quantities of agricultural products can be measured in terms of mass (metric tons), volume (liters), or numbers (for instance, head of cattle), but ERS's ATM model measures exports and imports in terms of value (dollars).
The United States exports a diversity of agricultural goods. Still, eight commodity groupings account for nearly three-fifths of total U.S. agricultural exports in terms of value: 1) soybeans and soybean products; 2) corn and corn products; 3) tree nuts; 4) cattle, beef, and beef products; 5) swine, pork, and swine products; 6) live poultry, poultry meat, eggs, and products; 7) wheat and wheat products; and 8) cotton and cotton products (see figure, “Composition of the value of U.S. agricultural exports by selected products (2019)”). The labor required to produce, process, market, and transport agricultural exports varies by product. For instance, each $1 billion of soybean exports in 2019 supported about 5,700 jobs, while each $1 billion of beef exports supported about 11,700 jobs.
Impacts of Agricultural Trade in 2019
The impacts of agricultural trade on the U.S. economy change from one year to the next. Factors beyond 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 indices and the value and commodity composition of agricultural exports are updated every year when the trade multipliers' annual estimates are being developed. In contrast, information on the changing structure of the U.S. economy is not available on an annual basis; for instance, detailed input-output accounts are published every five years.
With the publication of the 2012 Benchmark Input Output (I/O) accounts by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) in November 2018, ERS’s ATM model was rebased to incorporate the most recently available set of interrelationships between the various sectors of the U.S. economy. The resulting new ATM model is used for the first time to estimate the trade multipliers for calendar year 2019 and to re-estimate the multipliers for calendar year 2018.
ERS's new ATM model relies upon the definition of agricultural products used by the World Trade Organization (WTO). Agricultural products are those products listed in Chapters 1-24 of the Harmonized Commodity Description and Coding System (HS), less fish and fish products, plus a handful of products in other chapters, such as cotton, essential oils, and hides and skins. USDA adopted the WTO's definition of agricultural products as its standard definition to report agricultural trade at the start of calendar year 2021 (see USDA, Foreign Agricultural Service, “Updated ‘Agricultural Products’ Definition for Trade Reporting”). In addition, we include biodiesel as an agricultural product, given the use of soybean oil and other agricultural products as feedstocks for U.S. biodiesel production. This inclusion is made even though biodiesel is not classified by the WTO or USDA as an agricultural product. The inclusion of biodiesel is a new feature of ERS’s ATM model and adds about $380 million to U.S. agricultural exports in 2019.
The table “U.S. economic activity supported by agricultural trade, 2018-2019” reports the results of the new ATM model for calendar years 2018 and 2019. Due to rounding, figures in the text do not necessarily match those in the table, and individual numbers in the table do not necessarily sum to the totals shown. The results for 2018 (discussed further below) are obtained using the new ATM model. Consequently, they differ from the results reported for 2018 in February 2020, when the previous ATM model was used (see 2018 Data Overview).
In calendar year 2019, the $141.6 billion of U.S. agricultural exports (line 6) produced an additional $161.4 billion (line 9) in economic activity for a total of $303.0 billion of economic output (line 1). The figure of $141.6 billion in exports is freight on board (f.o.b.), meaning that the total export value includes trade and transport margins added to the production or farm cost to bring the product to the export port for shipping. Agricultural exports in 2019 supported 1,102,000 full-time civilian jobs—495,000 jobs in the farm sector and 607,000 jobs in the nonfarm sector (lines 16-18). In the farm sector, these jobs included labor provided by farm operators, their family members, hired farmworkers, and contract workers. In the nonfarm sector, farmers' purchases of fuel, fertilizer, and other inputs to produce commodities for export spurred economic activity in manufacturing, trade, and transportation. (For information on how the data are derived, see Documentation.)
|Line||Item||2018 total||2018 bulk||2018 nonbulk||2019 total||2019 bulk||2019 nonbulk|
|1||Economic activity generated by agricultural exports||311.3||93.1||218.2||303.0||85.5||217.5|
|5||Services, trade and transportation||114.3||39.9||75.5||110.5||36.1||74.3|
|8||Competitive agricultural imports (agricultural imports less noncompetitive agricultural imports)||127.8||4.8||123.0||131.3||4.3||127.0|
|13||Services, trade and transportation||92.4||33.8||58.7||89.0||30.5||58.5|
|14||Nonfarm share of supporting activity||80.8||93.4||76.0||80.6||93.1||76.3|
|15||Export multiplier (additional business activity generated by $1 of exports)||1.15||0.98||1.23||1.14||0.95||1.22|
|16||Employment generated by agricultural exports||1,168||372||797||1,102||324||778|
|21||Services, trade, and transportation||434||156||278||417||142||275|
|22||Employment per billion dollars of agricultural exports||8,054||7,891||8,133||7,784||7,386||7,962|
|23||Domestic equivalent of economic activity generated by competitive agricultural imports||263.9||9.5||254.4||270.8||8.5||262.3|
|27||Services, trade and transportation||97.3||4.2||93.1||100.0||3.7||96.3|
|28||Net domestic equivalent of total output gain or loss to competitive agricultural imports||47.4||83.7||-36.2||32.2||77.1||-44.9|
|32||Services, trade and transportation||17.1||35.7||-18.6||10.5||32.4||-21.9|
|Nonfarm, nonfood processing sectors:|
|33||Net direct benefit from exports||-3.4||5.3||-8.7||-4.8||4.9||-9.7|
|34||Net increased output from exports||17.8||43.9||-26.1||9.5||39.8||-30.4|
|35||Farm share of total income from exports||25.3||39.5||18.3||25.5||41.0||18.4|
|36||Trade and transportation share of total income from exports||24.1||18.5||26.9||24.2||18.1||27.0|
Note: Competitive agricultural imports are defined as total agricultural imports less noncompetitive agricultural imports. Noncompetitive agricultural imports are products assumed not to compete with U.S. agricultural production because they are not grown by U.S. farmers in large quantities for commercial purposes; these imports are defined to include bananas, plantains, pineapples, cocoa beans, coffee, palm oil, and tequila.
Source: USDA, Economic Research Service, Agricultural Trade Multipliers, updated April 2021.
The $161.4 billion of supporting or indirect activity generated by agricultural exports in 2019 includes—not only activities in the farm sector (i.e., crop and livestock production), food processing, and other manufacturing sectors—but also activities required to move exports to their final destination. These activities include computer and financial services, warehousing and distribution, packaging, and additional processing. The 2019 results underscore the importance of agricultural exports to the services, transportation, and trade sectors—which account for $89.0 billion (line 13) of the total $161.4 billion in indirect activity. Supporting activity in the farm sector is estimated to be $31.3 billion (line 10). The farm sector's $80.3 billion of output associated with agricultural exports (line 2) is the sum of exported raw agricultural products ($49.0 billion, not shown in the table) and the value of supporting activity in the farm sector ($31.3 billion). Overall, the farm sector’s share of the income supported by agricultural exports is 25.5 percent (line 35)—while the services, trade, and transportation sector’s share is 24.2 percent (line 36).
For total agricultural exports, each dollar of exports produced an additional $1.14 of business activity (line 15). This export multiplier equals the ratio of the economic value of activities supported by agricultural exports ($161.4 billion) to U.S. agricultural exports ($141.6 billion).
In its Bulk-Intermediate-Consumer Oriented (BICO) classification scheme, USDA divides agricultural trade into three broad categories of products: bulk, intermediate, and consumer-oriented. The last two of these categories make up nonbulk products. The bulk export total in the multiplier model ($43.8 billion) differs somewhat from the total reported in U.S. agricultural trade statistics, due to the model’s treatment of biodiesel as an agricultural product. For the latest U.S. agricultural trade statistics, as well as a complete listing of the products in each BICO category, see USDA's Global Agricultural Trade Statistics (GATS) database.
Bulk exports (defined as soybeans, other oilseeds, corn, sorghum, other feed grains, cotton, wheat, rice, tobacco, pulses. cocoa beans, and coffee; estimated at $43.8 billion in the multiplier model) produced an additional $41.7 billion of supporting business activity (i.e., each dollar of bulk exports generated $0.95 of additional output). Nonbulk exports (all agricultural exports other than bulk exports; estimated at $97.8 billion in the model) stimulated an additional $119.7 billion of supporting business activity (i.e., each dollar of nonbulk exports generated $1.22 of additional output).
Bulk exports have a proportionately larger effect on the nonfarm economy than nonbulk exports. For bulk exports, 93.1 percent ($38.9 billion) of the additional business activity took place in the nonfarm economy—including $30.5 billion in the services, trade, and transportation sectors. In comparison, 76.3 percent ($91.3 billion) of the additional business activity resulting from nonbulk exports occurred in the nonfarm economy, including $58.5 billion in services, trade, and transportation.
In relative terms, however, the farm sector’s share of the total income supported by agricultural exports is larger for bulk exports (41.0 percent) than for nonbulk exports (18.4 percent). This outcome makes sense because the processing of these bulk exports, and the marketing and retailing of the resulting final products primarily take place abroad. The shares of total income obtained by the services, trade, and transportation sectors are 49.3 percent for bulk exports and 49.6 percent for nonbulk exports.
Accounting for the Impacts of Agricultural Imports
For the multiplier estimates, imports are interpreted as a subtraction from economic activity that would have occurred in the United States in the absence of those imports. This simplifying assumption is made due to data limitations that prevent us from accurately assessing the impact of imports in the same way that we assess exports. Currently, it is not 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.
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).
To illustrate this point, consider the case of cocoa. Almost all the cocoa consumed in the United States is imported. If reliable statistics on consumer demand for cocoa and its many uses were available, the supporting activity required to deliver imported cocoa could be measured. This would be only part of imported cocoa's contribution to the U.S. economy, however, since cocoa is used as an input for various products (e.g., cocoa powder, cocoa butter, and different types of chocolate). Some of these products serve as intermediate inputs for producing other products; examples include chocolate bars, powdered drink mixes, candy, pastries, medicinal products, skincare products, ointments, and suppositories. To measure the U.S. economic activity supported by cocoa imports fully, one would also need to distinguish the impact of imported cocoa products from domestically produced cocoa products. The data for making this distinction do not exist.
Impacts of Agricultural Imports on U.S. Output
U.S. agricultural imports equaled about $146.4 billion in 2019 and are approximated at $142.1 billion in ERS's ATM model, due to some imprecision in the mapping of the product codes for trade data to the economic sectors in the model. Noncompetitive imports are products that are assumed not to substitute for domestic production. Unlike ERS’s previous ATM model, the new ATM model treats certain agricultural products, primarily grown or manufactured in tropical areas, to be noncompetitive with U.S. production (as the United States lacks the extensive tropical climatic zones needed to produce these items in large quantities for commercial purposes). These noncompetitive imports include: bananas, plantains, pineapples, cocoa beans, coffee, palm oil, and tequila. All other imported agricultural products are treated as being potentially competitive with U.S. production. Within the total of $142.1 billion of U.S. agricultural imports, $10.8 billion are considered to be noncompetitive imports, and $131.3 billion are considered to be competitive imports.
If competitive imports had been produced domestically, the effect on domestic output would have been about $270.8 billion. 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 2019 would have required another $1.06 in supporting goods and services had those imported items been produced domestically. This import multiplier (1.06) is the ratio of the economic value of the supporting activities assumed to be displaced by imports ($270.8 billion) to the value of competitive agricultural imports ($131.3 billion), minus one.
Overall Impacts of Agricultural Trade
U.S. agricultural trade (exports and imports) had a positive effect on all sectors of the economy in 2019. In the farm sector, $80.3 billion of output was either directly or indirectly associated with agricultural exports. This number more than offsets the estimated $46.9 billion of domestic economic output associated with competitive agricultural imports, had those imports been produced domestically instead. Thus, the farm sector’s net gain from agricultural trade was $33.3 billion. For all sectors of the economy, the net economic activity gained from U.S. agricultural imports (after the theoretical loss from competitive agricultural imports) was $32.2 billion. This number is slightly smaller than the net economic activity obtained from agricultural imports by the farm sector, primarily because many agricultural imports embody food processing activities conducted abroad. Considering both exports and competitive imports, trade in bulk agricultural products was associated with a net gain in economic activity of $77.1 billion, while trade in nonbulk agricultural products was associated with a net loss of $44.9 billion. The services, trade, and transportation sectors accounted for 42.1 percent of the net gain in economic activity obtained from bulk agricultural imports and 48.9 percent of the net loss of economic activity resulting from non-bulk agricultural imports.
The Number of Jobs Supported by U.S. Agricultural Exports Decreased by 5.7 Percent Between 2018 and 2019
To compare the number of jobs supported by U.S. agricultural exports in 2019 with the number supported the previous year, we applied ERS's new ATM model to economic data for 2018. We compared those results with those from the 2019 model (see table, "U.S. economic activity supported by agricultural trade, 2018-2019"). This exercise indicates that the total number of jobs supported by U.S. agricultural exports decreased by 5.7 percent between 2018 and 2019, from 1,168,000 to 1,102,000. The number of jobs required per billion dollars of agricultural exports decreased by 3.3 percent, from 8,054 to 7,784.
U.S. agricultural exports also declined in 2019, which helps to explain why the total number of jobs supported by U.S. agricultural exports decreased. Between 2018 and 2019, total U.S. agricultural exports declined from $144.7 billion to $141.2 billion in terms of value (a decrease of 2.4 percent) and from 219.7 million metric tons to 199.5 million metric tons (a decrease of 9.2 percent) in approximate mass. As a result, every billion dollars of agricultural exports, on average, corresponded with a smaller quantity of product in 2019, thereby requiring less labor.
The larger decline in approximate mass than in value suggests that the decline in the total value of U.S. agricultural exports in 2019 was due more to a decrease in export quantities than a drop in exported products' prices. Indices calculated by USDA's National Agricultural Statistics Service (NASS) for the prices received by farmers also support this conclusion. Between 2018 and 2019, the annual average of the monthly index of the prices received by farmers for agricultural products remained unchanged at 90.6 (base year of 2011 = 100). The annual average of the monthly price index for crop production decreased from 86.2 to 85.9 (0.3 percent), while the average for livestock production increased from 94.3 to 97.1 (3.0 percent).
At the product level, some U.S. agricultural exports decreased in either volume or value (if not both) in 2019, while others saw increases (see table, "Change in selected U.S. agricultural exports, 2019 versus 2018"). Corn registered a particularly sharp year-to-year decline in both export volume (40.4 percent) and export value (38.6 percent), due in part because the U.S. corn crop in 2018 (exported mainly during calendar year 2019) was smaller than the previous year's crop. Two co-products of corn-based ethanol production—distillers dried grains with solubles (DDGS) and fuel ethanol—also saw large year-to-year declines in exports in 2019. Exports of these three products declined by a total of $5.3 billion between 2018 and 2019.
|2018 value, billions of dollars||2018 volume, millions of metric tons||2018 unit value, dollars per kilogram||2019 value, billions of dollars||2019 volume, millions of metric tons||2019 unit value, dollars per kilogram||Change between 2019 and 2018 value percent||Change between 2019 and 2018 volume percent||Change between 2019 and 2018 unit value percent|
|Total agricultural exports||144.7||--||--||141.2||--||--||-2.4||--||--|
|Distillers dried grains with solubles||2.5||11.8||0.21||2.2||10.8||0.21||-9.2||-8.4||-0.9|
|Fuel ethanol (1)||2.5||5,923.1||0.41||2.2||5,209.9||0.41||-12.2||-12.0||-0.2|
|Beef and beef variety meats||8.4||1.4||6.18||8.1||1.3||6.13||-3.1||-2.4||-0.8|
|Cotton, excluding linters||6.5||3.6||1.83||6.1||3.6||1.72||-6.2||-0.4||-5.9|
|Pork and pork variety meats||6.0||2.4||2.53||6.6||2.6||2.53||9.5||9.4||0.1|
|Chicken, fresh or frozen||2.9||3.1||0.94||3.0||3.1||0.96||3.4||0.8||2.6|
|All other agricultural products||71.4||--||--||71.1||--||--||-0.4||--||--|
(1) Volume is measured in millions of liters, and unit value is measured in dollars per liter.
Source: Data from U.S. Department of Commerce, Bureau of the Census, as compiled by USDA, Foreign Agricultural Service, Global Agricultural Trade Statistics.
- 2018 Data Overview (February 2020)
Due to rounding, figures in the text do not always match those in the table, and figures in the table do not always sum exactly to their totals.