For Immediate Release: December 30, 2008
Contact: Jennifer Holton, 517-241-2485 or holtonj@michigan.gov

Michigan’s Agri-Business Sector on the Grow in 2008
Ag-based businesses poised for job creation, business expansion

LANSING, MI –Michigan Department of Agriculture (MDA) Director Don Koivisto today highlighted a sample of agriculture successes in 2008 from agri-food business expansion to job creation and noted ag-based businesses are important components for diversifying Michigan’s economy in the long-term.

“Michigan’s agri-business sector is more than just cows, plows, and overalls. It’s a cutting edge, growing business industry generating more than $38 billion in direct economic activity, $64 billion in total economic activity, and employs 1 million people,” said Koivisto. “As a matter fact, if Michigan’s agri-food sector appeared on the Fortune 500 list, it would rank 62nd, which speaks volumes on the importance of agriculture to Michigan’s economic health.”

From 2006 through 2011, the state could see an additional $1 billion economic boost from Michigan’s agri-food sector and create up to an additional 23,000 new jobs annually, according to a 2006 study by Michigan State University’s Product Center. Also, Michigan’s agricultural economy expanded at a rate of more than one full percentage point above the growth rate of the general economy (5.9 percent vs. 4.8 percent) between 2004 and 2006 and has continued to grow.

“Michigan’s agri-food business industry is changing and expanding at a rapid pace. By investing in the agri-food industry with incentives such as Agricultural Processing Renaissance Zones, we are significantly contributing to the state’s economic development,” said Koivisto. “These expansions are creating good paying opportunities for Michigan’s skilled workforce in areas such as food research and development and food science.”

The following showcases a small sample of Michigan’s agri-business success stories in 2008:

Agricultural Innovation Grant Program
MDA’s Agricultural Innovation Program, funded through the 21st Century Jobs Fund, had a $10 million total appropriation, with $5 million earmarked for FY07 grants, with the charge to accelerate the growth of Michigan’s $63.7 billion food and agriculture industry.
This grant program helps establish, retain, expand, attract, or develop value-added
processing and production operations in Michigan through innovative financing assistance to processors, agri-businesses, producers, local units of government, and legislatively-authorized commodity boards in Michigan.
Thanks to the investment in these 40 companies, MDA has been able to leverage state funds to private industry investment at an 8:1 ratio helping to create nearly 120 new jobs. This program has helped generate more than $36 million in private capital investment in the agri-food sector - the state’s fastest growing economic sectors.

Business Expansion:
Gerber Products Company, Fremont
Thanks to a two-year public-private partnership, Gerber Products Company, headquartered in Fremont, was awarded an Agricultural Processing Renaissance Zone (APRZ) as part of their expansion plans and commitment to Michigan. Gerber’s expansion includes modernization of the existing manufacturing facility, the addition of production lines, purchasing of new equipment, and a new warehouse and distribution center.
Gerber Products Company will invest $75 million in the Fremont facility, maintain 1,100 jobs, and create an additional 200 new jobs. Indirect jobs may also be created as the Company purchases 61,000 tons of produce for their product line from more than 200 Michigan growers. Additionally, they purchase $36 million in packing and raw materials from 11 key Michigan-based suppliers.

W.K. Kellogg Institute for Food and Nutrition Research (WKKI), Battle Creek
WKKI is the epicenter of Kellogg’s global research, development, and innovation activities. New product innovations created at WKKI are eventually produced and marketed all over the world. The largest percentage of commodities used at WKKI is from United States producers. Based on 2006 data, approximately 18 percent of grain, flour, fruit, honey, and other food products are purchased from Michigan agri-business producers.

In February 2008, an APRZ was approved. The APRZ guarantees $54 million in private investment over the next decade and the addition of 300 jobs in the food science research and development field. This designation enables Kellogg Company to continue to fuel top-line growth through additional pilot plant space, enhanced process scalability, and additional space for a flexible team environment and total technical community. Many of the new products WKKI creates will be manufactured in Battle Creek, Grand Rapids, and Wyoming. Kellogg also utilizes Michigan co-manufacturers to produce products created at WKKI.

Michigan Milk Producers Association (MMPA), Ovid
MMPA, the largest dairy cooperative in Michigan, represents 1,430 of Michigan’s approximate 2,500 dairy farms. In 2007, Michigan dairy farms produced approximately 7.5 billion pounds of milk, and MMPA member farms accounted for approximately 3.7
billion of those pounds. In addition, MMPA owns and operates two processing facilities in Michigan - Constantine and Ovid.

With slightly over five million pounds of daily processing capacity, the Ovid plant could process 25 percent of the state’s current annual milk volume of 7.5 billion pounds.

MMPA has committed to investing $35 million in their existing Ovid facility, maintaining 86 existing jobs, and creating 10 new jobs. Additionally, 166 indirect and induced jobs will be created by their commitment to Michigan as well as 344 construction jobs. MMPA is also considering an additional investment of $25-27 million for a new spray dryer for manufacturing milk products, which brings their total new expansions and private investment to approximately $62 million within the designated APRZ.

In the long-term, MMPA’s investment will lead to $182.6 million in both direct and indirect economic impact according to the MSU Product Center for Agriculture and Natural Resources.

“These are just a few examples of what Michigan’s homegrown businesses are doing to attract new investment and create jobs in our local communities,” said Koivisto. “When government and private business work together, great things can be accomplished for Michigan’s business community.”

For more examples of growth and expansion in Michigan’s agri-food sector, visit the MDA Web site at http://www.michigan.gov/.

###Editor’s Note: Director Koivisto’s last name is pronounced Coy-Vis-Toe.