Employment Growth Forecasted For Food Processing Industry

Although employment is predicted to grow by three percent for 2004-2014, energy costs are also increasing, which can have a significant impact on food processors, according to a recently published study.

COLUMBUS, Neb. – The food processing industry is expected to increase employment approximately three percent 2004-2014, although manufacturing employment is expected to decline by more than five percent in the same time period, according to a recent study of the food processing industry by Nebraska Department of Economic Development researchers, Nebraska Public Power District (NPPD), and the University of Nebraska.
Food processing is one of the largest manufacturing sectors in the United States, accounting for 11.9 percent of the total value of shipments by U.S. manufacturers and 11.3 percent of total manufacturing jobs, the study said.

The report examined select characteristics of food processing production including the cost of energy and materials, the value of industry shipments and labor-related costs. For the food processing industry, the cost of materials inputs decreased between 1997 and 2002, while energy costs have increased, the report noted.

“The study points out that energy costs can vary greatly between states, and food processing companies can gain a significant cost advantage by locating their manufacturing plants in states with lower rates,” said Donis Petersan, Ph.D., an economist at NPPD and lead author of the report.
Petersan said of the 16 states examined in the study, Nebraska’s industrial electric rates were 37 percent lower than the average for the other 15 states, and natural gas rates were 15 percent lower.
“Whether a location has high or low energy costs can have a significant impact on the competitive position of a food processing establishment,” Petersan said. “It’s a critical factor, and site selectors should look closely at electric and gas rates when they are locating or expanding a plant.”
Click here to view the complete study.
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