Agricultural Trade Multipliers

Agricultural Trade Multipliers (ATM) provide annual estimates of employment and output effects of trade in farm and food products on the U.S. economy. When expressed as multipliers, these effects reflect the amount of economic activity and jobs generated by agricultural exports. 

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Exports constitute a significant market for U.S. farm and food products that send ripples of activity through the U.S. economy. For instance, grain exports first generate economic activity on the farm through input purchases such as fuel and fertilizer, spurring additional economic activity in the manufacturing, trade, and transportation sectors. Then entering grain into the export market requires data processing, financial, legal, managerial, and administrative services. This additional economic activity is estimated annually by USDA’s 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. In 2022, U.S. agricultural exports valued at $197.4 billion had generated an additional $214.6 billion in economic activity, for a total of $412.0 billion in economic output. This means that, on average, every $1.00 of U.S. agricultural products exported generated a total of $2.09 of domestic economic activity. The services, trade, and transportation sector benefited the most from agricultural exports, generating an estimated $73.6 billion worth of additional economic activity. On the farm, agricultural exports supported an additional $70.4 billion of business activity beyond the value of the agricultural exports themselves.

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The U.S. agricultural sector serves as a cornerstone of the U.S. economy, not only bolstering economic output but also serving as a key driver of employment across various sectors. The process of exporting agricultural goods initiates a chain reaction of labor demands that leads to widespread employment opportunities throughout the economy.

From cultivating the crop on the farm to facilitating its journey to market, each step generates employment opportunities in manufacturing, services, trade, and transportation, which affects jobs far beyond the agricultural sector. For instance, exporting soybeans requires on-farm labor and in the manufacturing, services, trade, and transportation sectors, encompassing a diverse range of jobs. Additionally, the production of inputs and services necessary for exporting soybeans supports even more jobs beyond the agricultural sector. In 2022, U.S. agricultural exports amounted to $197.4 billion and supported 1.25 million jobs. This number refers to full-time civilian jobs, as measured in full-time equivalents (FTEs), a conversion of the number of hours worked to an equivalent number of full-time positions. This translates to approximately 6,338 jobs for every $1 billion of agricultural products exported. Notably, the nonfarm sector benefited the most, generating around 773.9 thousand jobs, while on the farm, agricultural exports supported 477.2 thousand jobs. The top 10 agricultural exports accounted for 60 percent of the total jobs created by U.S. agricultural exports, with soybean and corn bulk exports alone supporting over 364.0 thousand jobs and bovine, chicken, and swine meat nonbulk exports supporting 185.0 thousand jobs.

The above numbers were calculated with the inclusion of biodiesel as an agricultural product, given that soybean oil is the largest feedstock for U.S. biodiesel production, even though biodiesel is not classified by the WTO as an agricultural product. The inclusion of biodiesel adds about $1.5 billion to U.S. agricultural exports in 2022, bringing the total value of U.S. agricultural exports to $197.4 billion. Without biodiesel, in accordance with the WTO definition for agricultural products, U.S. agricultural exports instead totaled $195.9 billion in 2022.

The Agricultural Trade Multipliers estimates:

  • Are adjusted annually to account for changes in prices and labor productivity (see the nonbase year estimation section of the Methodology in the Documentation page for details);
  • Include detail on 124 agricultural products and product groups, ranging from soybeans to essential oils, using the World Trade Organization’s (WTO) definition of agricultural products;
  • Are only for open multipliers at either the producer (farm or manufacturer) or port stage of export (see below for further detail); and
  • Are released every Summer.

Agricultural Trade Multipliers app have two options to display multipliers:

  • Predefined USDA, ERS estimates of the economic activity and jobs supported by agricultural exports in the most recent calendar year are available in the data overview page.
  • Estimates are generated by an interactive calculator that enables users to select a basket of exports from the list of predefined estimates and/or apply a new set of trade margins to the commodity or basket of goods (see below instructions on how to use the ATM calculator).

 

Step-by-step instructions on how to use the Agricultural Trade Multiplier (ATM) calculator

Step 1 – Select a commodity, using either the predefined USDA, ERS commodity groupings or the commodity selection tree. Note that you cannot make concurrent selections from both the predefined groupings and the selection tree. To select from the predefined groupings (all agricultural exports, farm commodities, all crops, livestock, nonfarm commodities, bulk commodities, and high-value commodities), click the radio button to the left of the grouping of interest. Only one group from the USDA, ERS’ predefined list can be selected.

To select from the commodity selection tree, click on the box next to each commodity or commodity group. A checkmark (√) will appear next to each selection. At any time, you can click checked boxes to undo selections from the list, thus enabling you to tailor your analysis to a single commodity or any combination. Once selections have been made, click the "Next" button to proceed to the next step.

Step 2 – Select the type of multiplier by clicking the radio buttons corresponding to either the producer-level or port-level of the export process. The producer level includes the activity embodied in the commodity as it leaves the farm gate or manufacturer's door before shipping and handling charges have been added. By definition, both USDA, ERS’ and users’ margins for a producer-value multiplier are set to 100 percent for producer and zero for both transportation and wholesale/retail trade. You cannot select new margins for the producer level. If producer-level multipliers suit your needs, select “Producer” and proceed to step 3. Port-value multipliers reflect the value of the commodity as it leaves the farm gate or manufacturer's door, and shipping, handling, and storage charges between the farm or manufacturer and the port. If port-level multipliers suit your needs, selecting “Port-value multipliers” (and entering in the default trade margins) will provide multipliers that most closely approximate the published USDA, ERS multipliers, allowing for rounding error.

If you want to input your own trade margins, select “Port.” The ATM calculator allows you to adjust the producer, transportation, and wholesale/retail margins. Once you select “Port,” the calculator will generate a table. Input your margins in the table. The three margins can range from 0 to 100 and must be a whole integer value. The sum of the three margins must equal 100. Click the “Calculate Port” button to confirm your margins sum to 100, save them for analysis, and proceed to step 3. If your margins do not sum to 100, a warning box will ask you to correct your entries. Users can experiment with margins that differ from the USDA, ERS margins, in which case their estimated multipliers will differ from the USDA, ERS published results.

Step 3 – Click the "Review Results" button to create and display your model results table. If you selected more than 10 commodities, the table will be displayed over multiple pages. The number of pages will be noted in the blue bar at the bottom of the table. Click on a page number to display that page in the table. Note that in the results table, the asterisk (*) symbol indicates the table’s cell is empty.

All tables can be printed and/or downloaded in Microsoft Excel  format.

To start over click the “Start Over” button.

See the Documentation page for information about assumptions and methodology underlying the USDA, ERS Estimates, as well as the Glossary for more information.