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Texas food, fiber system contributed $72.8 billion

The food and fiber system in Texas contributed as much as $72.8 billion to the state economy from 1997 through 2000 despite periods of drought and low prices, according to a joint study by the Texas Agricultural Experiment Station and Texas Cooperative Extension.

During the four-year period, the food and fiber system accounted for 10 percent of the state's total economy, “a sizeable fraction when you consider the size and diversity of the Texas economy,” said Dr. Ed Smith, associate director for agriculture and natural resources with Texas Cooperative Extension and one of the members of the study team.

The study was presented recently to the state Agriculture Policy Board, chaired by Texas Agriculture Commissioner Susan Combs, with members representing both the state Senate and House of Representatives.

“Even in challenging economic times, Texas agriculture is an engine of economic growth,” Combs said. “This study confirms what we've always known that our state's robust agricultural sector contributes to the economic well-being of all Texans.”

Texas' food and fiber system encompasses all the economic activities related to agricultural production — the inputs purchased by farmers, production and processing, distribution and retail. Examples include machinery repair, 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.

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

“The gross state product is the value added in production through the use of land, labor, capital and management resources of the state,” said Dr. Gene Nelson, department head for agricultural economics at Texas A&M University.

Since 1997, overall food and fiber system contributions to the Texas economy have remained consistent despite periods of drought and low prices. From 1997 through 2000, the food and fiber system's contribution to the gross state product grew by 22.8 percent and the rest of the Texas economy grew by 21.9 percent.

The food and fiber system accounted for 9.7 percent ($59.3 billion) of the total economy in 1997, 9.9 percent ($63.5 billion) in 1998, 10.2 percent ($69.6 billion) in 1999 and 9.8 percent ($72.8 billion) in 2000.

Nelson said the components of the food and fiber system are “much more interrelated than in the past.” The food and fiber supply chains have become more integrated and closely coordinated.

“There are important reasons for that in terms of quality control, efficient delivery of product, food safety and the ability to trace a commodity to the retailer or food service industry,” Nelson said.

“The food and fiber industry is very dynamic, with hundreds of new food products being introduced monthly,” he said. “That's an important source of value-added and economic activity.

“Consumers are interested in convenience and in nutritional qualities. Food processors are developing new products to respond to that demand.”

Nelson said that trend will continue as more value is added to agricultural products produced throughout the state.

“This study recognizes the way the whole food and fiber system has evolved over time,” he said. “As we look at this integrated system, it becomes an important contributor to our economy.

“The processing adds value to our economy, and consumers also benefit as we add convenience and more nutritional products to our food system.”

The report may be viewed on the Web by clicking on:

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