The Economic Contribution of Michigan's Vegetable Farming and Processing Sectors

By Bill Knudson

Vegetable production is an important part of the Michigan agri-food system. This is despite the fact that the sector faces difficulties related to rising input prices, accessing labor (Bardenhagen et al), and government regulations. The climate and soils in some parts of Michigan make the state well suited to produce some vegetables, some of these same factors make it difficult to profitably grow corn, wheat, and soybeans profitably on current acreage devoted to vegetables.

Staff at the MSU Product Center Food-Ag-Bio were contracted by the Michigan Vegetable Council to assess the role the vegetable sector plays in the Michigan economy. This study assesses the impact at two levels:  the farm level and the processing level.  IMPLAN, a standard economic impact software package was used to generate the total economic contributions of farming and processing. IMPLAN estimates the indirect impact; impacts of related businesses such as input suppliers, brokers, food retailers, and supply chain participants, as well as the induced impacts; spending at the household level resulting from vegetable farming and processing. 

This study attempts to gauge the overall importance of the vegetable farming and processing sectors without estimating the impact of alternative activities (Bardenhagen et al). As such, economic contribution is a more accurate description of this study than an economic impact study.

This analysis will estimate the total economic impact of vegetable farming and vegetable processing in both dollar terms and in employment.  In 2022, Michigan had 3,213 farms that produced vegetables on 152,833 acres (Census of Agriculture). The estimated contribution of vegetable farming is $1.19 billion in sales, with a total contribution of $2.11 billion. These figures might be an overestimate. Vegetable farming is estimated to employed about 7,800 workers with a total impact on employment of approximately 13,000. The employment figures are almost certainly an underestimate as migrant workers are likely not counted. The employment figures are based on IMPLAN estimates.

While a very rough estimate, the vegetable processing sector contributes more than $1.92 billion in direct sales, with an estimated total contribution to the Michigan economy of $3.28 billion. The vegetable processing sector employs about 4,400 people with a total contribution of about 13,400 jobs. 

Adding the vegetable farming impacts to the impacts of processing yields an estimate of about $5.39 billion with a total impact on employment of approximately 26,400.

Economic contribution of vegetable farming

Michigan is an important producer of some vegetables and vegetable products.  The state’s sandy and muck soils make it well suited to produce vegetables (Bardenhagen et al).  Some of these soils would make it difficult to produce other crops such as corn, wheat, and soybeans.  In 2022, Michigan had 3,213 farmers that grew vegetables on 152,833 acres (Census of Agriculture).  Nationally Michigan is a leader of several vegetable commodities.  Table 1 shows Michigan’s national ranking of several vegetables in 2023.

Michigan produces about 50 percent of the nation’s asparagus. It also produces about 30 percent of the cucumbers and 25 percent of the squash. Michigan is the second largest producer of all dry beans, and is a major producer of potatoes, especially for potato chips. 

Table 2 shows the estimated sales of selected vegetables averaged from 2022 to 2024. Most of the vegetables produced in Michigan are shown in Table 1. The first column shows the level of sales at the farm level and the second column, Total Contribution estimates the economic contribution of vegetable farming. These figures should be considered rough estimates. It is becoming increasingly difficult to track the production of some vegetables. As a result, some vegetable production may be captured in the “other” category.

Total sales during the time period averaged approximately $1.19 Billion a year. The total economic contribution of vegetable farming is approximately $2.11 billion a year. These figures indicate that despite the difficulties facing vegetable farmers, the level of sales has remained fairly constant. Again, it should be noted that some of these figures should be considered estimates. This is especially true for the “other” category. The figures may be an overestimate. 

Sales of cucumbers for processing, squash, cabbage, asparagus, bell peppers and snap beans all exceed $20 million a year. Dry beans and potatoes are also major vegetable crops.

Many vegetable products are labor intensive. In fact, the cost of labor and the difficulty in obtaining labor is a major issue facing vegetable producers. The employment in vegetable farming and the total contribution to employment in the Michigan economy is shown in Table 3. These figures are based on IMPLAN estimates and should be considered a very rough estimate.