BISMARCK, N.D. — Agriculture has long been considered a major economic driver in North Dakota, but a new first-of-its-kind study highlighted at the state capitol on Monday, Dec. 5, has revealed the impact may be even bigger than previously anticipated, with $30.8 billion in total economic contribution and 110,480 total jobs tied to the industry.
Agriculture makes up 24.2% of North Dakota’s value-added economy, 19.2% of all employment and 20.6% of labor income, officials announced.
“I think everybody knows agriculture is important,” said Greg Lardy, vice president for agricultural affairs at NDSU. “We say it, and as you drive through North Dakota communities and rural areas, you certainly see it. But I think the numbers now speak for themselves in the scope of the industry.”
Jenny Schlecht / Agweek
The study, completed by researchers from the North Dakota State University Department of Agribusiness and Economics and the NDSU Center for Social Research, has not yet been distributed. However, Gov. Doug Burgum joined Lardy and the study’s lead researchers, Dean Bangsrud, a research scientist in the NDSU Department of Agribusiness and Applied Economics, and Nancy Hodur, director for the NDSU Center for Social Research, in presenting highlights at the state capitol on Monday.
The news conference announcing the results of the study came on the same day the state Legislature held an organization session and administrative rules committee hearing, providing plenty of lawmakers to hear the results as well as leaders from agriculture groups.
Lardy said the agriculture and NDSU’s agricultural programs including research and Extension have found support among state lawmakers, historically. However, the study can serve as a starting point for conversations on how to make the industry stronger going forward.
Jenny Schlecht / Agweek
“We hope it demonstrates the true value of the agriculture industry in North Dakota,” he said.
That value, Hodur said, is more than just what goes in farmers’ pockets. Past studies on economic impact in ag have been more piecemeal, looking at individual commodities. On this one, they were able to “properly scope the study” to look at everything that goes into agriculture, including things like the finance aspect. There’s an economic impact to interest paid on loans, as well as input purchases and other expected quantities.
“It really helps demonstrate how important agriculture is,” she said. “Of course, we know agriculture is important to our small rural communities, but agriculture is much, much bigger than that. It’s not only important to our farmers and our ranchers. It’s also important to our rural communities and our urban communities. So agriculture doesn’t just touch a little piece of North Dakota here or a little piece there. Agriculture is throughout our economy in the state.”
The study encompasses data from 2018 to 2020, providing a “snapshot” of agriculture’s average economic contributions in those years, Bangsrud said. In that period of time, agriculture provided an average of $18.8 billion from “direct output,” defined as “the first round of payments for services, labor and materials and/or sales,” and $12 billion from “secondary output,” defined as “the economic activity created through purchases of goods and services by businesses and households.”
The study also revealed that 43,060 direct jobs and 67,420 secondary jobs in the state are tied to agriculture, resulting in labor income of about $7 billion.
All those statistics together mean “we have a very important industry in North Dakota,” Bangsrud said.
Jenny Schlecht / Agweek
Burgum pointed out that crop production accounts for the largest portion of the receipts, with $15 billion in impact. That is followed by commodity processing, with more than $8 billion. The processing number is certain to increase in coming years, the governor said, with more processing capacity in the works across the state, including two soybean crush plants under construction and a third that he expects to be announced.
What could improve, Burgum said, is livestock production. Accounting for just over $2.6 billion of the economic contribution to the state, livestock production in North Dakota lags nearby states, including South Dakota and Minnesota, he said. The lack of animal agriculture means less natural fertilizer and fewer markets for the crops and byproducts produced here, he said. Burgum blames the state’s policies for the lack of animal diversification, namely the state’s anti-corporate farming law that prevents “aggregating capital” to put up the money-intensive facilities used in modern agriculture.
“We’re restricting the flow of agriculture,” he said.
Burgum said the Legislature should take up the state’s policies that may be inhibiting animal agriculture, including zoning policies that can make it difficult to gain approval from local governments for livestock facilities.
“We’re really putting our producers in North Dakota at a competitive disadvantage,” he said.
The governor said there also is a need for the public to be educated about opportunities in livestock. The state of technology in animal agriculture means the reality might be “different than what they might have in their mind or in their nose from 40 or 50 years ago,” Burgum said.
Bangsrud said it was a complex study with a lot of moving parts. Similar studies have been done of other industries. A study released in 2021 showed that the oil and natural gas industry in North Dakota accounted in 2019 for more than $40 billion in gross business volume and accounted for nearly 60,000 jobs. However, Bangsrud cautioned that industry studies are not ranking exercises to determine which industry is most important but a way to quantify industry value and allow each industry to “tell its story.”
