North Dakota might not be top of mind if you’re thinking of re-locating your dairy or building a satellite facility. Maybe it should be.
Doug Goehring, North Dakota Agriculture Commissioner, insists that his state should be on your “must see” list of states to visit if you’re considering a new facility. First and foremost, the state has excess processing capacity in its two plants, and ready access to another. Plus, reports of the demise of the Bakken oil field boom are vastly over-stated. And, most importantly, North Dakota is livestock friendly and feed rich.
While other states along the I-29 corridor--Iowa, Nebraska and even South Dakota--have had to put the brakes on new dairy facilities, North Dakota is milk deficit. “We’re having to import milk,” says Goehring. The state has two processing plants—a fluid milk plant in Bismarck and a fluid/yogurt plant in Fargo. The state also supplies milk to a hard Italian cheese plant just across its southern border at Pollock, S.D.
The Bakken Field oil boom has brought some 130,000 new consumers to the state in the form of oil-field workers and supporting infrastructure. Once oil prices recover and drilling resumes, the need for milk and other dairy products will continue to be there.
Over the past four to six years, the industry has punched more than 10,000 wells into the Bakken. “It’s estimated the oil industry will have to drill another 57,000 wells to complete the development of the field,” says Goehring.
That task could take another 30 years, he says. Plus, oil geologists suspect that there is vastly more oil at different depths and in other areas underlying the state.
North Dakota is also virtually untapped as feed source for milk production. “We have 27 million acres of farm land, and 12 ½ million acres of pasture. Feed stocks are not a problem,” says Goehring. “Plus we have an abundance of co-products and distiller by-products, and an abundance of water.”
Land prices are also relatively reasonable, with land typically selling for $3,000 to $4,000 per acre. The state’s average corn yield is about 120 bu/a, and corn silage typically runs 24 to 28 tons/acre in the eastern third of the state.
Plus, the state is livestock friendly. “We can get permitting completed within 30 to 60 days for in-state residents; outside entities might take longer,” he says. Environmental regulation and compliance is handled at the state level with an emphasis on education to help producers understand what is required. North Dakota has a higher environmental compliance rate, at 80%-plus, than the Environmental Protection Agency (at 40-50%).
Financing and capital is also readily available. “If they have the equity, we can find financing,” says Goehring. The Bank of North Dakota is available for co-financing or loan guarantees, with low-interest loans, some as low as 1 ½%, available under the right circumstances.
For more information, go to www.nddairy.com.
