Legislators get an up-close look to interconnected ag industry of central North Dakota

JAMESTOWN, N.D. — Desiree van Oosting’s first week after being elected to the North Dakota Legislature included a whirlwind look at one of the state’s most important industries: agriculture.

The voters of North Dakota’s District 36 on Nov. 5 elected Van Oosting to represent them in the state Senate. Van Oosting, a Republican from New Salem, grew up on a farm, as did her husband. So while she knew the importance of agriculture to North Dakota, she hadn’t seen some facets of the modern industry up close.

Van Oosting was among a group of new and experienced legislators to take a tour through central North Dakota agriculture on Nov. 8.

The group started off with a behind-the-scenes look at Cavendish Farms, a potato processing plant, before going to the Gayne Gasal farm and feedlot. Lunchtime included a look at North Dakota’s ag economic contribution, and an outlook panel featuring Howard Olson, the senior vice president of government and public affairs for AgCountry Farm Credit Services, along with ag producers Justin Sherlock, of Dazey, Ed Kessel, of Dickinson, and Warren Zenker, of Gackle. After lunch came a walking tour of Dakota Spirit ethanol plant and a bus tour of Green Bison Soy Processing.

For Van Oosting, it was an eye-opening day.

“I haven’t seen any of these places. This is my first tour of the soybean plant, the ethanol plant and Cavendish farms,” she said.

At Cavendish Farms, the group donned hard hats and hair nets to see what happens as potatoes are brought in, washed and processed into a variety of products, including french fries, hash browns and more. At the Gasal farm, they heard about what happens on a corn and soybean farm and walked through a 3,000-head feedlot. And the tours of the ethanol and soybean crush plants gave a better idea at how the state’s biggest crops get turned into feedstocks for fuels, along with other products.

Each stop included opportunities for participants — which also included representatives from ag groups in the state — to ask questions. Topics discussed included the Renewable Fuels Standard, labor and transportation.

“Everything is just so interconnected,” Van Oosting said.

Nowhere was that connection more apparent than at the Gasal farm, where Gayne Gasal, Blayke Gasal and Josh Daulton answered questions and showed everyone around the feedlot. The family has been in the Jamestown area for generations and on the current farm since 1949. Gayne Gasal boasted that the farm no longer is in the farm program, being able to operate without crop insurance or other government programs and payments. The farm grows corn and soybeans, which can be sold at the nearby plants.

The farm is also located near Cavendish Farms, which has put the feedlot sector in a unique position to use byproducts from the processing plants as feeds. The feedlot feeds waste products from Cavendish, along with dried distiller’s grain from Dakota Spirit and waste products of the soybean crush process from Green Bison.

“French fries make good cattle feed,” Gayne Gasal said.

“The feed costs are the key to the operation,” Daulton said.

And all of the manure from the feedlot gets spread back on the fields, where more crops are grown.

The feedlot purchases calves around 500 pounds and feeds them to finish, shipping them to a Tyson plant in Dakota City, Nebraska. Having a beef packing plant closer would certainly be helpful for transportation costs, the Gasals and Daulton said. The size of finished cattle means the cost per head to truck to Nebraska gets steep.

“Trucking would be significantly better,” Daulton said.

Infrastructure was a big takeaway for Van Oosting.

“What I’m hearing today is the importance of roads and infrastructure for these businesses that bring in a lot of product to the soybean plant, the potatoes to Cavendish farms,” she said. “Learning a lot, especially as a freshman.”

Over lunchtime, the group heard from Matt Perdue, government relations director for North Dakota Farmers Union, about what ag means to North Dakota, including that the industry supports 110,480 jobs in the state. While researchers at North Dakota State University who completed a study on

ag’s economic contribution to North Dakota

, wouldn’t say that ag is the “largest driver of employment in the state,” Perdue said, “that is probably a fair assumption.”

While the industry’s success means a lot to the state, there have been struggles in recent years. Olson, Sherlock, Zenker and Kessel discussed low grain prices and high input costs. Olson stressed that things aren’t as bad as the 1980s, when high interest rates and low prices were devastating to many family farms. But the problems are very real.

“We’ve got commodity prices that have dropped considerably the last two years, input costs have come down a little bit, but they still remain very high, and we find many of our farmers are in a net-loss situation this year where they’re losing money,” Olson said. “When you have those kinds of losses, they’re burning through their working capital. They’re burning through their cash. Now they have to figure out, how am I going to rebuild that working capital?”

While Sherlock said he might lose $300,000 this year — money that he says he “tucked away” over past years of better prices and high government payments — he said there are important things in North Dakota that make the future of agriculture look positive.

“Because of the Bank of North Dakota and some of the groundwork laid in the past” he said he can afford advancements like drain tiling that should make his land more productive in the future.

He and Kessel also talked about the importance of having value-added opportunities in the state, like the North Dakota State Mill’s white wheat program and ethanol and soybean plants. Domestic demand is vital, Sherlock said, pointing out that during the

trade war in 2018-19

, “50% of the revenue on my farm had nowhere to go.”

While

cattle prices

have been a bright spot in the ag market, Zenker, who has a cow-calf and feeder operation, compared equipment costs as an illustration that it’s still tough to make a profit. In the mid-’90s, he bought a new baler for $14,000. That was when a 500-pound calf brought about 40 cents per pound. Now, with like-sized calves bringing well over $3 per pound, his new baler cost $70,000.

“That 500-pound calf is not going to pay for that baler,” Zenker said.

A big talking point in the state in recent legislative sessions has been about expanding animal agriculture in North Dakota, which lags nearby states in livestock numbers. Zenker said lack of end processing remains an obstacle, with freight charges lingering around $60 per head, but he’s not sure whether communities in North Dakota would accept the changes that come with a processing plant. Sherlock suggested that a government entity should take the lead on looking into factors keeping animal agriculture in the state from growing.

In closing remarks to legislators, Kessel said lawmakers should keep regulations friendly to agriculture. Zenker agreed and said property tax relief also is important. Sherlock said things like working toward helping ensure affordable daycare are important.

“We’ve got to keep our small communities livable,” he said.

After the tours were finished, Olson said it is important to “help (legislators) get a better understanding of production agriculture, what we’ve got going on, the uphill battles that our farmers always face.” Showing them the importance of what value-added agriculture means for producers and the state is vital, he said.

“We’re so dependent on our export markets, whether it’s foreign exports or even just export out of the state. If we can be processing that product here and send it out in components, or feed it in the livestock and send it out as meat instead of meal, that’s just so much better for our agriculture,” he said.