Agriculture and the North
Dakota Economy
North
Dakota’s major industry is agriculture; 38 percent of its economic base
is attributed to the sector, and approximately 89 percent of the state
is comprised of farmland (North Dakota Agricultural Statistics Service).
It ranks among the top states in terms of its reliance on agriculture;
in 1989, North Dakota ranked fourth in terms of the percentage of the gross
state product that is derived from agriculture (gross state product is
the gross market value of goods and services attributable to the state’s
labor and property). Other nearby states are also highly dependent
on agriculture. In terms of agriculture as a percentage of gross
state product, South Dakota and Nebraska ranked first and second in the
United States, respectively. Minnesota's agricultural percentage
of gross state product is also high relative to most states, although it
was considerably less than that of North Dakota, due to the major influence
of the Minneapolis/St. Paul metropolitan area (Coon, Leistritz, & Majchrowicz).
Similar with other
regions, the number of farms in North Dakota has decreased over the years
while the average farm size has increased. Technological advances
in agriculture have increased the amount of land that one farmer can efficiently
operate.  In
1992, the number of North Dakota farms was 31,123, only about one-half
the number that existed in 1954. Average farm size, on the other
hand, increased from 676 acres in 1954 to 1,267 acres in 1992 (Coon &
Leistritz). The average age of a North Dakota farmer has also increased;
in 1997 the average age was 51, compared to an average age of 47 in 1982
(USDA Census of Agriculture). In spite of these changes, agriculture
remains an important area of employment for North Dakota. In 1995,
almost 24 percent of the state’s employment was in farm and farm-related
jobs, in comparison to 15 percent for the U.S. as a whole (Economic Research
Service Fact Sheets).
The state is the
country’s leading producer of many crops, including durum wheat, barley,
other spring wheat, sunflowers, and all dry edible beans. In terms
of the percentage of its total state farm receipts, North Dakota’s two
most important commodities are wheat and cattle, at 38 percent and 12 percent,
respectively (Economic Research Service North Dakota Fact Sheet).
With wheat playing such an important role, North Dakota's agricultural
economy is less diversified than most states (Economic Research Service,
1998). The state is a major exporter of wheat; in 1997, it ranked
second among all states in terms of the highest value of wheat exported.
With such a dependence on this particular commodity, however, North Dakota's
agricultural export base is narrow in relation to the other Northern Great
Plains states (Northern Great Plains Rural Development Commission).
Because agriculture
represents a significant portion of North Dakota’s economic activity, the
state is acutely affected by agriculture’s performance. Due to external
factors such as weather, price changes, farm policy, and foreign trade,
the value of agricultural output can experience great variability from
year-to-year (Coon, Leistritz and Majchrowicz). As a result, North
Dakota's net farm income can experience great year-to-year volatility.
References
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