January 31, 2008

LANSING - Today Governor Jennifer M. Granholm and Michigan Department of Agriculture Director Don Koivisto applauded the outstanding achievements and economic growth made by Michigan’s food and agriculture industry during 2007. From a new record reached in the state’s annual agricultural exports to the benefits from the bio-economy boom in renewable fuels to expansion in the state’s general farm economy, the agri-food sector exhibited significant broad-based economic growth during the year.

“Michigan’s food and agriculture industry helps drive our economy and the industry had a successful 2007,” Granholm said. “It’s poised to reach even greater heights in 2008 as we continue to focus on diversifying the state’s economy, creating jobs and investment.”

“Last year was very good year to be in agriculture,” said Koivisto. “Michigan agriculture is a growing segment of the state’s economy. Michigan’s agri-food sector is the state’s second largest industry, employing more than 1 million people, and generating $63.7 billion for Michigan’s economy - an increase of $3.6 billion since 2005.”

The following highlights agricultural successes in 2007:

Renewable Fuels and Bio-Products

Michigan ranks 7th in the nation in ethanol fuel production at 267 million gallons (mmg) capacity, according to the Renewable Fuels Association. To date, nearly $1 billion has been invested in Michigan’s biofuels plants - both ethanol and biodiesel - with an annual estimated state economic impact of approximately $600 million.

The Michigan Renewable Fuels Commission issued their Initial Report in June 2007, with numerous key recommendations for growth and development in the renewable fuels industry. Renewed focus must be applied to the development of biofuel pump infrastructure in Michigan, including a “green retailer” program.

There are five corn-based ethanol plants operating in the state - Albion, Caro, Marysville, Riga, and Woodbury - creating 220 direct jobs. Total ethanol production by the end of 2007 reached 200 mmg, with ethanol fuel consumption estimated to be approximately 210 mmg.

The biofuels boom has generated large-scale spin-off business expansions for Michigan. For example, due to national higher demand for corn varieties, Monsanto Company began expanding their Constantine DeKalb Seed Corn Production facility by $40 million, with completion expected by the summer of 2008. As a result of this expansion, 500 additional seasonal jobs and about 10 processing jobs will be created, along with adding 6,500 acres of seedcorn production in southern Michigan.

Agricultural Exports

According to a recent USDA Agricultural Trade Update report, Michigan’s annual agricultural exports generated more than $1 billion and supported 12,800 jobs. The state exports almost one-third of its 200 agricultural commodities. In 2007, Michigan inched out Kentucky for the 19th spot among the top 20 state agriculture exporters in the nation.

Dairy Industry

Dairy farming is the leading segment of Michigan’s agricultural industry. Milk production has increased 30 percent over the last 10 years with a six percent increase in 2007. According to the Michigan Milk Producers Association (MMPA), the increase translates into 2 million pounds per day increased milk processing capacity and created approximately 500 new farm jobs.

In 2007, General Mills’ Yoplait Yogurt Reed City plant began a $32 million expansion of their Reed City facility. The company received a MEGA tax credit from the Michigan Economic Development Corporation for the expansion, which will result in 25 new jobs. The MMPA will be one primary supplier of milk and nonfat dry milk to the Yoplait plant. Once the plant expansion is complete, the plant will employ over 400 employees and will become the largest yogurt production plant in the U.S. The plant will purchase more Michigan food products totaling over $50 million annually from state farms and agri-businesses.

More Michigan Food and Agriculture Growth

In 2007, Michigan wineries and grape growers received attention from a national study demonstrating that the state's grape juice and wine industry contributes more than $789 million annually to the economy, and supports employment of approximately 5,400 Michigan residents. There are approximately 450 Michigan grape farmers with 14,600 bearing acres. Michigan's booming grape juice and wine industries also significantly impact tourism with more than 800,000 tourists visiting the state’s 50 wineries.

MDA’s Julian-Stille Agriculture Innovation Grant Program, funded in 2005 as part of the
21st Century Jobs Fund, awarded $4.7 million to 40 companies. The program’s goal is to accelerate the growth of Michigan’s $63.7 billion food and agriculture industry. In 2005, the program was appropriated $10 million from the 21st Century Jobs Fund with $5 million earmarked for FY07 grants.

By December 2007, 10 out of 40 grant awardees completed their projects. This program has leveraged state funds generating private industry investments at a 7:1 ratio; and creating 46.5 new jobs. These companies have made $7,958,665 in new private capital investment with MDA paying $1,115,856 in grant reimbursements.

Additionally, Michigan’s agricultural commodity groups provide approximately $2.4 million annually to support research at Michigan State University and other Michigan colleges and universities.

For more information on Michigan agriculture or the above programs, please visit www.michigan.gov/mda or contact MDA’s Office of Communications at 517-373-1104.

Read more about Michigan's Agricultural Achievements here.