Op-Ed: Value-added investments grow agriculture

Source: By Pete Ricketts, York News Times • Posted: Wednesday, August 16, 2017

Investments in the area of value-added agriculture are helping to grow our state’s number one industry. Many people think of traditional row crops when they think of agriculture, however, modern-day technology and innovations are helping the industry add value to Nebraska’s traditional commodities. This is great news for all Nebraskans because it’s attracting new investments, creating jobs, and increasing local demand for raw commodities across our state. Highly-respected national and international companies are putting down roots here with new value-added operations, and many well-known local firms are expanding their existing operations.

A recent investment from Costco is a great example of how value-added agriculture creates new opportunities for the next generation of farm families. In June, Costco broke ground on their first-ever chicken processing plant, a $300 million investment which will create 800 new jobs in Fremont and opportunities for over 100 farmers through a poultry grower network. The project is estimated to add $1.2 billion to Nebraska’s economy, and will impact more than simply the market for chicken. Some of that value will also be realized through increased demand for locally grown corn and soybeans.

In Grand Island, Hendrix-ISA is building a chick hatchery, which begins operation this month. This $40 million project will create over 40 new jobs. Additionally, ten area farmers will be building feeder barns to serve the hatchery’s needs. This will further increase the demand for locally produced crops, which the farms will need to feed the chickens.

 The ethanol industry is another great example of value-added agriculture in Nebraska. Nebraska is the second largest ethanol producing state in the nation. In the past two years, ethanol plants in Jackson, Fairmont, Adams, Columbus, and Kearney have invested approximately $190 million in new technology as they increase capacity and diversify their products. In addition to the billions of gallons of ethanol manufactured each year, these facilities also produce distillers’ grains, corn oil, corn syrup, dry starch, and specialty livestock feeds. The billions of bushels of corn consumed by the state’s ethanol plants each year support demand for our quality Nebraska commodities.

While Nebraska’s ability to produce corn has not only attracted ethanol plants to the state, our ethanol plants, like Cargill in Blair, in turn have attracted bioscience companies such as Novozymes to Nebraska. Novozymes produces enzymes for renewable fuels. Recently, the Denmark-based company announced that it plans to invest $36 million to expand its facilities in Blair. The Cargill campus in Blair also recently attracted a $200 million investment from Evonik, a German company that will produce omega-3 fatty acid oil, drawing on raw commodities in the area.

Meanwhile, Nebraska continues to lead the nation in commercial red meat production, one of our greatest valued-added ag success stories. Cattle and hog operations across the state are the biggest consumers of Nebraska corn, soybeans, and other feed stocks, supporting commodity prices and creating thousands of jobs. In turn, meat processors such as Cargill, Smithfield, and others are investing money in their facilities to produce and increase sales of Nebraska meat products and generate additional money to our state’s economy.

Growth in livestock hasn’t happened by accident – it’s been the product of support from both the industry and the state. Through the Department of Agriculture, we have established a variety of programs that have helped support this kind of livestock expansion. These include the Livestock Friendly County Program and the Livestock Siting Assessment Matrix, which help create greater predictability for producers looking to expand or add livestock to their operation. While we have already had significant investments, there is still plenty of room for additional growth and expansion.

International trade missions are another key strategy my administration has been using to grow value-added ag. Trade missions help cultivate investments in products from the crops and livestock we raise as well as attract companies to manufacture and process those products in Nebraska. For example, the Novozymes investment I mentioned above came on the heels of a trade mission I led to Copenhagen to help make the case for expanding their Nebraska presence. This year, I am leading trade missions to Canada and Japan, which will give us the opportunity to show our appreciation for two of our biggest trading partners, increase market access for our products, and pitch Nebraska as a great place to do business.

In the coming years, value-added agriculture will only continue to grow in importance as farming techniques, biotechnology, and science continue to advance. These advances will continue to help create new jobs and provide an in-state market for Nebraska’s quality commodities and livestock. It’s all helping grow Nebraska! If you have thoughts on the subject of value-added agriculture or other thoughts you’d like to share, please contact my office by emailing pete.ricketts@nebraska.gov or calling 402-471-2244.