The Truth About Corporate Farming

Truth #1: Corporate Farming could result in a land grab by big corporations, pensions and hedge funds

Allowing corporate farming in North Dakota will result in more competition and higher land prices for farmers and ranchers trying to purchase or rent land.  Recently, Agriculture Secretary Tom Vilsack directed USDA’s Beginning Farmer and Rancher Committee to put a special focus on land ownership. Vilsack said one-third of the farmland in this country is owned by non-operating farm owners. Institutional investors, such as pension funds, see farmland as fertile ground to plow, either by doing their own deals or farming them out to specialist funds. It is not just the asset appreciation and yields that attract outside capital; it is also the diversification to portfolios that farmland offers (Source: The Economist).

Truth #2: Family Farming serves North Dakota well – we don’t need corporate ownership of farms to be successful.

North Dakota agriculture has demonstrated success time and again. We are the number 1 producer in the nation of 8 commodities, and 2nd in many more. We lead South Dakota in ag sales (Source: 2012 USDA Ag Census). Agriculture remains the bedrock of our economy, all on a foundation of family farmers and ranchers working the land and livestock, and living in their communities. The law is working.

Truth #3: Corporate Farming does not increase access to capital for farmers

Access to credit already exists in North Dakota, including financial incentive programs for beginning farmers. Current law provides channels for non-family members to invest in agriculture through partnerships, contracts for deed, loans, and other legal tools.  Access to outside investment capital is not what stands in the way of increased dairy and swine success. Instead, it’s the economics: low prices, reduced consumption, distance from markets, high costs of labor all drive return. When the cost of producing a commodity exceeds the price received, no amount of investment in machinery, land or diversification will increase farm income. 

Truth #4: Allowing Corporate Farming does not expand markets for our local corn and soybean farmers and ethanol plants.

According to the agriculture commissioner, a 1,600 head dairy operation will consume 170,000 bushels of corn in a year, or roughly 106.25 bushels of corn per cow per year. Even if we double the number of dairy cows in the state, they’ll only consume an additional .53% of North Dakota’s 5-year average corn production and another 1.37% of DDGs from ethanol plants. According to the United Soybean Board, pork production in North Dakota consumed 14,000 tons of soybean meal in 2013. The 5-year average for potential soybean meal production in North Dakota is over 3.6 million tons. Pork production consumed only 0.39% of the total soybean meal potential production; even doubling pork only increases that to .78%.

Truth #5: South Dakota has seen a decrease in the number of dairies since they introduced corporate farming.

REALITY: While the dairy herd in South Dakota has grown, individual dairies have decreased. From 2000 to 2014, South Dakota lost 76% of their dairies while North Dakota lost 74% of their dairies (Source: State of South Dakota). Despite the South Dakota Corporate Farming Law change in 2008, the decline in their dairies did not even level off, let alone was there an increase.