Texas food and fiber system contributes $73 billion to Texas economy

02/15/05

COLLEGE STATION – Texas' food and fiber system contributed approximately $73 billion to the state's economy in 2001, according to a joint study by the Texas Agricultural Experiment Station, Texas Cooperative Extension, and the State Office of the Comptroller.

For 2001 – the last year for which complete data are available – the Texas food and fiber system accounted for 9.5 percent of the gross state product.

"This analysis certainly shows that the total economic impact of agriculture is still very significant to Texas as it includes the many related enterprises that support the production and marketing of food, fiber, and land resources," said Dr. Ed Smith, Extension interim director.

The state's food and fiber system encompasses all economic activities related to production, processing, and marketing of agricultural and natural resource products from the point of origin to the consumer.

Examples include energy purchases, fertilizer production, food processing and manufacturing, transportation, wholesale and retail distribution of products, and restaurants. Also included are economic activities that link the production of plant and animal fibers and hides to fabric, clothing and footwear.

"The Texas agricultural industry is a powerhouse of production and a strong foundation of the Texas economy," said Susan Combs, Texas agriculture commissioner. "Texas was settled by farmers and ranchers and has grown and prospered through the hard work of the men and women in agriculture.

"Today, this industry accounts for almost 10 percent of the gross state product, but more important, provides jobs for about one out of almost seven working Texans and sustains the economic survival of our rural communities."

To measure the economic impact, the study looked at gross state product (GSP).

"The GSP is the value added in production through the use of the land, labor, capital and management resources of the state," said Dr. Gene Nelson, department head for agricultural economics at Texas A&M University and a co-author of the study report.

From 1997 to 2001, the food and fiber system's contribution to Texas gross state product grew 22.5 percent--from $59 billion to $73 billion. For the same period, the rest of the Texas economy grew by 25.8 percent.

Production agriculture in the Lone Star state is second only to California nationwide. Texas produces a variety of high quality food and fiber products to consumers in the state and around the globe. Beef cattle and calves lead all agricultural commodities in contributions to gross state product at $4.9 billion. Cotton, including cottonseed, contributes about $1.3 billion, while the greenhouse and nursery industry adds some $1.2 billion.

"While these value-added numbers by commodities are significant in themselves, they only capture the economic impacts through the first point of sale," Smith said. "Economic impacts through further value-added processes and distribution are not easily traceable back to individual commodities."

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