May 31, 2023

Ag Commissioner talks about expanding animal agriculture

Topic: Issues

The 2023 Legislative Session made changes to North Dakota’s anti-corporate farming laws. Ag Commissioner Doug Goehring visits with Straight Talk with NDFB about how these changes with benefit agriculture in N.D. Listen to the whole episode here.

Changes to North Dakota’s Anti-Corporate Farming Laws

The changes to the anti-corporate farming laws have now made it possible for animal agriculture to raise capital and create the partnerships and the opportunities that really bode well for both livestock farmers and grain farmers in the state. I think there's been a misconception that this change is just about animal agriculture. All of agriculture will benefit.

North Dakota excels in many areas of agriculture but when it came to dairy, swine and poultry, we really were shut out of the game. If you look around the surrounding states, 40% to 50% of our neighbor’s gross agricultural receipts were from animal agriculture. In North Dakota, we were closer to 14 - 15% of our gross receipts in agriculture coming from animal ag.

There was a lot of discussion leading up to the session about how we could come up with a proposal and work with others to address the shortfalls. It is a challenge. If you're going to build a swine facility, one that's economically viable, mind you, it will probably cost between $17 to $30 million. A dairy will cost between $40 to $70 million. No bank is going to just step up and give you the money. Plus, if you don't have a lot of expertise, banks are going to be a little apprehensive. You really need partnerships. You need the expertise.

Five years ago, I actually had a poultry facility that wanted to come to North Dakota. I met with them and they were excited because of the biosecure environment we have and the abundance of feed. They thought they could set up a base of operations here. It was a cage free facility and they would be shipping eggs all the way to California.

They said, "Hey, we'll make money."

I said, "So how much money does it cost to build a facility?"

They said, "About $82 million. And all we need to do is partner with some of your surrounding farmers because we have to have a manure management plan in place. We also need to make sure that we're securing feed products, feed stocks, and we'd either build our own feed mill or we'd make sure that if we could have a feed mill in the area, we would let them know what we would need and then they could actually enhance their facility and make sure they did that."

At the time, I had to tell them partnerships were not going to be an option. So they left and that was unfortunate because we lost some real opportunities in North Dakota.

We struck an agreement during the 2023 Legislative Session to allow up to ten members to own an animal agriculture facility and purchase a limited number of acres. A feedlot or a dairy is limited to 160 acres for their operation. With a swine or poultry facility, about 40 acres was going to be your max. The law would still not allow these ventures to farm. If there are farmable acres owned by one of these facilities, they will have to rent it to an individual to farm. The new law creates opportunities for investment and partnering to help more animal ag facilities get established in North Dakota.

Supporting Legislation for Infrastructure and Zoning

There is legislation that will help political subdivisions become compliant with the state model zoning ordinance. We have found through studies over the last couple of years that there are a handful of counties and 30-some townships that have very strange ordinances in place, things that quite frankly have never been legal, but I think were created out of fear. We actually have funds set aside to help them be compliant by drawing new zoning ordinances with respect to what the state model zoning ordinance says and allows you to do.

There's also an infrastructure program which would help areas that have potential for animal ag operations to come into their community. Maybe that’s limitations with power or water and waste management issues. You could be looking at some potential road issues. There are some things that could really help with the infrastructure needs for any new animal ag facilities coming into our communities.

Fertilizer

Most of our grain farmers are the ones who are interested in these types of animal feeding ventures because they can sell feed and forages but the biggest aspect is getting some of that manure in that manure management plan. The manure is such a complete form of fertilizer. You may have to enhance it a little bit by adding a little more nitrogen, but you get the micronutrients and the phosphorus and the potassium which are so desperately needed in crop production, it's all there.

I've talked to farmers in other states like Iowa. And you know what their biggest thing is? It's just not about adding value to their corn and running it through those pigs. It's the manure they get on the backside because it's removing $100 to $150 an acre in a direct cost for fertility in their operation. So, yeah, they're getting the benefit of getting to feed their own feed, but that's such a small portion of their operation. It's the other side that has such a dramatic impact and effect.

These hog facilities are not like the ones of the ‘70s and the 80s. I've walked into facilities where the waste of the pit was actually beneath the barn, and you could hardly smell anything when you walked in there. Some of these new dairies are actually putting liners over the top of their pits because they're trying to capture the gas. They're looking at biodigesters. They're trying to make sure that they're minimizing the smell, but they are also capturing more of the nutrients. When they do look at expelling and distributing the manure, they have even a better product that's now being injected.

Opportunities for Producers

The opportunities are going to be different for everybody. The first step is to find partnerships that have the expertise and would be willing to come in and build some barns. They will need to look at certain aspects of what's available for resources in a community. Processing, manure management, all of these things will take community participation.

Certainly young producers would have an opportunity to potentially partner with existing companies. If someone wanted to start a facility on their own with a few neighbors, I think there's some things you would have to think about. If you're going to incorporate, you're going to have to provide a level of trust and credibility to your partners as to what's your expertise in feeding or milking or producing in an animal ag facility before you're going to get people to sign on. So generally, partnering with somebody that's already in the business is just a better option for most. But I'm not going to tell people what they should or shouldn't do, I'm just going to tell them what their options are and some of the realities.

Ultimately, companies are waiting with bated breath because they want to make sure that this isn't going to be challenged, that this law is going to stand, how it's been passed. They're also trying to understand the uniqueness of it. Where do they fit in, what type of partnerships do they have to look at and what they can do going forward.

I think it's a matter of North Dakotans and the public in general getting very familiar and seeing more of what animal ag is now that will even help it going forward more.

Agriculture Commissioner Doug Goehring has been commissioner since 2009. Commissioner Goehring farms with his son near Menoken, N.D. He served as the vice president of North Dakota Farm Bureau and has been the county president of Burleigh County Farm Bureau. He also served as president of Nodak Mutual.