Agriculture and ag-related industries are a $742 billion industry in the United States and accounts for nearly 5 percent of the annual GDP. In North Carolina, agribusiness is the largest contributor to the state’s economy, estimated to be in excess of $70 billion. The military is a distant second, contributing roughly $23 billion to the NC economy.
It is not common that reports on agriculture sector business contributions per state are released to the public, but the NCEast Alliance provided information on the huge impact that agriculture is having on the North Carolina economy. This should be of interest to those not familiar North Carolina, other than the agricultural headquarters for some of the nation’s crop protection companies located at Research Triangle Park near Raleigh, N.C.
The NCEast Alliance is a regional economic development agency serving more than 1 million residents within several small metropolitan and micropolitan areas from the fringe of the Research Triangle to the Atlantic Coast. The Alliance provides community capacity building and assists companies with site location and expansion assistance.
There are over 120 firms in the value-added agriculture cluster in the region served by the NCEast Alliance. The cluster employs nearly 20,000 workers, including those employed in producing/harvesting raw materials (i.e. farmers, foresters and others providing food and fiber). Major processing companies include Butterball, Mt. Olive Pickle, Hillshire Brands (Sara Lee), Sanderson Farms, Weyerhaeuser, and Smithfield. The extended cluster includes a robust supply chain of companies that design and make production/packaging equipment (Aylward), refrigerated/cold storage units (Bally), insulated doors (Frank Door) packaging materials or glass containers (Verallia/St. Gobain) and many other components as well as numerous service providers (United States Cold Storage).
Much like the Life Science and Aerospace industries, the Value-Added Agriculture (VAA) cluster has continued to grow in eastern NC, even during the recession. A series of announcements made over the past year will add in excess of $300 million in investment and greater than 800 jobs.
BioChemtex, an Italian owned technology company announced in December 2013 that it will invest $200 million in eastern NC. The plant will employ 65 on site and estimates another 250 indirect jobs. BB&T, which has its origins in Wilson, NC, provided the financing for the project.
The plant will make use of 20,000 acres in rural eastern NC to gather biomass for the production of ethanol; including 6,000 acres under contract with Murphy-Brown. An agreement signed earlier this year between the two companies will allow BioChemtex to grow crops on acreage that is not used for food production. The BioChemtex facility, slated to begin operations in 2016 will be the nation’s first to make liquid fuel on a commercial scale from purpose grown energy crops.
In another first, ACX Goldsboro is the first major hay export processing facility on the east coast of the US. ACX Pacific Northwest plans to invest $4.7 million over the next 3 years and will create 38 new jobs. The company plans on purchasing hay products direct from local farmers and will export to the Middle East and other global regions from Wayne County through the Port of Norfolk.
In recent months, Mt. Olive Pickle Company (Wayne County) announced a 77,000 square foot expansion to its production and warehouse space. The $4.1 million expansion will provide infrastructure to accommodate two new production lines. When finished the facility will be a total of 385,000 square feet. From a modest beginning in 1926, Mt. Olive has become the bestselling brand of pickles in the country.
Even more food processing jobs are coming to eastern NC thanks to Natural Blend Vegetable Dehydration’s investment in Pitt County. The company announced it will create 57 jobs and invest more than $12 million over the next 3 years in Farmville. Natural Blend is being developed by Ham Produce Company, Inc. for the purpose of dehydrating significant quantities of quality vegetables for use as an ingredient in various food products.
Two major ag companies in Lenoir County have experienced growth recently. Sanderson Farms is now the largest employer in the county with more than 1,600 employees. Additionally, Smithfield Foods now employs over 600 and has completed their expansion of an additional 190,000 square foot facility, creating over 300 new jobs with $85.5 million in capital investment. In September, Shauanghui International and Smithfield Foods announced the completion of their strategic combination, creating a leading Global Pork enterprise with expectations that exports to China to increase as a result.
The most recent announcement in the booming value-added ag sector was in Nash County. Carolinas Gateway Partnership and Nutkao USA, Inc. announced in December the company will be locating its nut butter manufacturing operation in Rocky Mount and it is expected to invest more than $17 million over the next 5 years and create 100 jobs.
With expectations for the world population to increase by another one billion people in the next decade, the region should continue to experience significant investment and employment growth in food production/processing in addition to the production/processing of woody biomass to satisfy the growing demand for ‘drop-in’ liquid biofuels by military and civilian activities.
For more information on the NCEast Alliance, visit www.nceast.org.