North Dakota is like the world’s superstore, exporting agricultural commodities and products to nearly 90 different countries. Adding value to farm products before they leave the state creates more jobs and delivers a broad range of positive economic impact.
Value-added agriculture refers to any activity adding economic value to farm-raised products by changing their state or form.
“You can add value by a wide range of processes, services and technologies,” says John Schneider, former director of Agricultural Products Utilization Commission and current economic development and finance division director at the North Dakota Department of Commerce. “Value-added agriculture is one of the pillars for economic development strategy in North Dakota.”
Wheat mills have long added value to the state’s largest crop. The North Dakota Mill, in Grand Forks, is the country’s largest flour mill. North Dakota businesses also add value to high percentages of soybeans and other oilseeds grown here (like canola and sunflower), potatoes, corn, and sugarbeets.
“A very large percentage of our sugarbeet crop is processed right here,” Schneider says. “That not only provides value to farmers, but it supports jobs for the state.”
Food and Fuel
Making ready-to-eat foods from farm products helps a farm or ranch capture a larger share of the consumer’s food dollar. North Prairie Signature in Leeds creates summer sausage, meat sticks and jerky from farm-raised bison.
Specialty foods, like North Prairie Signature’s bison products, have been a profitable value-added niche for some producers.
“Adding value can be as simple as cleaning pulses and packaging them in 5-pound or 50-pound bags for export,” Schneider says. “We are looking for new companies that complement our existing pulse companies.”
Ethanol is a remarkable value-added agriculture success story in North Dakota. The state’s five ethanol plants now purchase 40 to 60 percent of North Dakota’s corn production, annually contributing nearly $625 million to the state’s economy. Each ethanol plant has an average payroll of $3.3 million, at 47 jobs per plant. And the impact does not end there.
“Studies indicate that we create up to 4,000 indirect jobs between our two sites,” says Jeff Zueger, CEO of Midwest AgEnergy Group. The company operates Blue Flint Ethanol near Underwood and Dakota Spirit AgEnergy near Jamestown.
Corn and Soybeans
Zueger says corn farmers have benefited big from the five plants.
“Ethanol plants offer an opportunity for North Dakota farmers to have a steady, year- round processing facility market, with an offer to buy product to process on a much more consistent level,” he says. “This naturally creates opportunities for farmers to market their products into delivery periods that work best for their individual business model.”
North Dakota farmers often alternate corn with soybeans from year to year. Many soybeans are shipped to out-of-state crushing plants, which separate soy oil from soybean meal.
“We have always been looking for another opportunity to add value to soybeans before they leave the state,” says Schneider.
A new soybean crushing facility planned for Jamestown will benefit area farmers. That means another value-added enterprise for North Dakota – along with more jobs and more economic impact from a crop already growing here.