NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
July 15, 1999
Soybeans have become an increasingly important crop in North Dakota, with state acreage increasing from about 500,000 acres in 1990 to more than 1.5 million acres in 1998. Estimated direct annual economic impacts to the state now stand at $221 million, according to a study by North Dakota State University agricultural economists.
Soybeans have consistently been one of American agriculture's top three commodities in terms of acreage and value of production, with most production concentrated in the Corn Belt states. Recently, however, soybean acreage has increased in less traditional row-crop regions, including North Dakota.
According to the NDSU study by research scientist Dean Bangsund and professor Larry Liestritz of the Department of Agricultural Economics, soybeans accounted for 26 percent percent of all row crop acreage in the state in 1998, second behind sunflower. That year soybeans accounted for 8.3 percent of all crop acreage. Much of the increased acreage has occurred in the Red River Valley, the state's traditional soybean production region, but there have been substantial increases in other areas of North Dakota.
The economists say several factors have led to the increased soybean acreage in the state. The Freedom to Farm Act greatly increased planting flexibility, and current farm program provisions for loan deficiency payments have provided less price risk and greater revenue potential than found with other traditional crops. Also, yield, price and crop quality problems common to traditional small grain crops during the 1990s have forced producers to seek alternative crops.
The North Dakota economy has benefitted from the increased soybean acreage, say Bangsund and Leistritz, because the per-acre impacts have been greater than those from traditional crops such as wheat or barley. Annual direct economic impacts from soybean production were estimated at about $184 per acre from 1996 through 1998.
In addition to the $221 million in direct economic impact from soybean production, additional direct impact of $4.3 million from grain handling and $10.1 million retained in the state from soybean transportation bring total annual direct economic impact from all soybean activities in the state currently to $235.4 million. Using an input-output mathematical model to estimate secondary economic impacts, gross business volume in North Dakota attributable to the soybean industry during 1996 through 1998 was an estimated $617 million annually.
Nearly all the economic activity from the soybean industry is generated from production as there is currently very little processing in the state.
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Sources: Dean Bangsund (701) 231-7471
Larry Leistritz (701) 231-7455
Editor: Gary Moran (701) 231-7865