Agriculture adds $30bn to ND economy

According to a study by North Dakota State University, North Dakota’s agribusiness contributes $30.8 billion to the state’s economy, of which $18.8 billion comes from direct production and $12 billion from secondary production.

Direct effects represent the first round of payments, services, labor, and materials, or sales, while secondary effects represent economic activities created by goods and services purchased by firms and households.

The study, which ran from 2018 to 2020, examined the different segments within the agribusiness and their overall contributions.

The research results were presented in a press conference by Gov. Doug Burgum shared; Greg Lardy NDSU Vice President of Agricultural Affairs; and the study’s lead researchers – Nancy Hodur, Director of the Center for Social Research, and Dean Bangsund, Research Fellow at the Department of Agribusiness and Applied Economics.

“I think what everyone knew was the incredible impact of farming in North Dakota,” Burgum said. “Farming continues to be a major driver of our economy, creating prosperity and job security for North Dakota residents.”

Over half of the economic contributions came from crop production, followed by raw material processing, which Burgum says is only going to increase, and then livestock.

Regarding processing of raw materials, three soybean crushing plants are either under construction or expected to be commissioned in North Dakota.

Study covers all raw materials

This isn’t the first research study on the agricultural industry, but according to Bangsund, this was the first study to include all commodities. “This included all agricultural commodities and livestock, including grain handling [and] shipping goods in and out of state markets, including goods processing,” he said.

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“The state has a variety of value-added processing operations, including converting soybeans into vegetable oil, converting sugar beets into sugar and corn into ethanol,” he said, adding the figure is $8.2 billion.

“This is a very complex study,” said Bangsund. “There are many moving parts, many exchanges of goods and services. We work very closely with our industry representatives to ensure the information is accurate, relevant and up-to-date for North Dakota residents.”

It has been found that over 110,000 jobs derive from North Dakota’s agriculture – 43,000 direct jobs and 67,000 secondary jobs. However, Bangsund said that figure doesn’t tell the whole story. “When we say there are 110,000 jobs in the industry, those are jobs reported by employment agencies,” he said.

“We have to distinguish here that there are a large number of jobs in this industry that represent sole proprietorships or self-employment,” he said. Of the 110,000 jobs, “we need to understand that 23% of those jobs come from sole traders and the self-employed.”

To put those numbers in perspective, Bangsund said, “Approximately 20% of all wages in North Dakota comes from his industry.”

true value

“If we look at this industry in North Dakota, you can go from Crosby to Pembina, which traverses the state, and every county in the state depends on this agriculture in a very significant way,” Lardy said.

“We mention a number of different companies and things that are happening in this industry,” he said. “But any community can drive through the main streets, whether it’s Fargo or Crosby, Baldwin or Grand Forks” to find farming businesses.

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According to Bangsund, the value of the study lies in the information it gives farmers to tell their story. “We compile the reports and document what went into the study and what the results are. The value of that information is when we get it out to the public and the industry can tell their story.”

While preliminary results from this study have already been published, the research team said a more detailed report will be available soon.

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