Exports constitute a large market for U.S. farm and food products and send ripples of activity through the nation’s economy.
For instance, farm purchases of fuel and fertilizer to produce agricultural commodities for export spur economic activity in the manufacturing, trade, and transportation sectors, and the movement of these exports requires data processing, financial, legal, managerial, and administrative services.
This additional economic activity is estimated annually by the Economic Research Service (ERS) using an agricultural trade multiplier that measures the employment and output effects of trade in farm and food products on the U.S. economy.
Similarly, the agricultural trade multiplier can be utilized to evaluate impacts of shocks such as COVID-19 on the agricultural sector. In 2018 U.S. agricultural exports valued at $139.6 billion generated an additional $162.9 billion in economic activity, for a total of $302.5 billion in economic output; thus, on average, every dollar of U.S. agricultural product exported generated $1.17 of additional domestic economic activity.
No sector outside of crop and livestock production benefited more than the services, trade, and transportation sector, which generated $88.2 billion worth of additional economic activity due to U.S. agricultural exports. On the farm, agricultural exports supported an additional $22.1 billion of business activity beyond the value of the agricultural exports themselves. — USDA ERS
