Michigan’s Total Economic Impact of the Potato Industry is USD2.53bn

An estimated USD2.53bn is the total economic impact of the potato industry in the state of Michigan, of which approximately USD1.50bn comes from direct economic activity related to the production, processing, distribution, and retailing of potatoes and potato-related products.

According to “The Economic Contribution of the Michigan Potato Sector” report, the remaining USD1.03bn is made up of indirect activity from related industries and household consumption resulting from activity generated by the potato sector.

Total employment generated by the potato sector is estimated to be approximately 21,700 Michigan jobs, of which approximately 15,600 are directly employed along the potato supply chain and close to 6,000 more are employed in related industries or other businesses. These jobs generate about USD832m in wages and salaries and contribute USD2.53bn to the annual gross state product.

Potatoes are Michigan’s second-leading produce commodity. In 2022, Michigan ranked 8th in the nation in potato production, and 6th in terms of sales (USDA, NASS). In 2022, Michigan potato growers produced 856,382 tons of potatoes with farm sales of USD246.18m (USDA, NASS). Michigan potatoes generally sell at a premium because the state is a major producer of seed potatoes and chipping potatoes.

“Michigan is the leading national supplier of potatoes used for potato chips. Some of the largest potato chip manufacturers in the country use Michigan potatoes as well as smaller regional and specialty potato chip processors. Chips use a wide range of inputs besides potatoes; some examples of these inputs include oil, salt, packaging, and transportation services. All of these activities are captured in the economic impact estimates,” the report reveals.

In terms of employment and economic impact, potatoes are a vital vegetable for its prosperity. Nationally, Michigan plays an important role in potato production and is critically important in the chip industry.