Detroit may be reeling from the economic downturn, but one part of Michigan's economy is bright—the food and agriculture industry.


According to the report from Michigan State University, the state's second-largest industry experienced 12 percent growth in 2007, the year the study was conducted.


"Agriculture is a force for economic stability in Michigan, with yearly economic impact estimated to be $71.3 billion, on the basis of data from 2007," says Christopher Peterson, director of the MSU Product Center and an author of the study. "This represents a $7.6 billion increase from the $63.7 billion impact projected in an analysis of 2006 data released last year."


The study, "Second Interim Update on the Economic Impact of Michigan’s Agri-food and Agri-energy System," considers economic contributions from agriculture, food and related industries, including nursery, turfgrass, ethanol, ornamental plants and food processing.


"Michigan’s agri-food system represents almost 20 percent of the state's overall economic engine, making it the second-largest industry in Michigan, and it employs a quarter of the state’s work force," says Don Koivisto, Michigan Department of Agriculture director. "This report further underscores the importance of this growing industry in rebuilding and diversifying Michigan's economy."


The study shows the agricultural economy expanding at a rate more than five times the growth rate of the general economy—11.9 percent versus 2 percent— between 2006 and 2007.


"If Michigan’s agri-food sector appeared on the Fortune 500 list, it would rank 55th," Koivisto says. "To me, that speaks volumes about the vitality of the state's dynamic food and agriculture business sectors, and the intrinsic role it plays in our state’s economic health."


Evidence also suggests that employment in the agri-food system has increased since the last economic census data was released in 2004.


"Our last analysis showed Michigan's agri-food system accounting for 1.05 million jobs, both directly and indirectly," says William Knudson, product market economist for the MSU Product Center and the study's lead author.

The university won't have updated job figures until 2010, but Knudson says he projects it will be more than 1 million.

But he cautioned that the agri-food industry may have hit its peak for the next few years.


"Food is a necessity, so the agri-food industry, unlike tourism and manufactured goods, may fare better than other industries in an economic downturn," Knudson says. "But the system is not immune to the impacts of the global recession."


The MSU data further support growth trends demonstrated in the recently released U.S. Department of Agriculture 2007 Census of Agriculture, which showed a $2 billion increase in farm gate sales since 2002.


To view the study, click here.