What’s the biggest sector of South Dakota’s economy?
Many people believe it’s tourism. And while we do have a steady income stream from visitors to South Dakota’s iconic landmarks and landscapes, the economic impact of agriculture exceeds that of tourism.
In fact, agriculture provides more than 30 percent of all jobs and accounts for nearly one-third of the state’s economic output. Consider that:
Production agriculture’s direct effect on the South Dakota economy was $8.3 billion, representing the value of products produced.
An additional impact of $3.4 billion results from businesses supplying inputs, and effects of increased household spending are $1.6 billion, bringing the total to $13.3 billion for production agriculture.
Agriculture contributes more than $645 million to South Dakota’s tax revenues.
A recent Argus Leader article showed that “the rate of economic growth for South Dakota and the Sioux Falls metro rises and falls with the price of corn.”
Corn is the most common crop in the state, comprising 5.3 million acres of farmland.
The Economic Impact of Corn Production in South Dakota Study, conducted by Dave Swenson of Iowa State University, concluded:
Corn production in South Dakota accounted for 6.4 percent of statewide GDP, 6.9 percent of labor income and 5.5 percent of all jobs in the state in 2011.
South Dakota’s corn producers pumped $2.43 billion into the state’s economy, providing $1.71 billion in total labor income to 31,761 jobholders.
Currently, South Dakota has a surplus of corn, as supply exceeds demand. While this results in lower corn prices and can reduce farm income, the situation also presents possibilities.
The last time an oversupply of corn become problematic—about 30 years ago—the ethanol industry was born, providing enormous economic opportunities and growth.
“We’re looking for that ‘new ethanol,’” says Lisa Richardson, executive director of the South Dakota Corn Growers Association and the South Dakota Corn Utilization Council. “And, knowing the farmers in our great state, I’m sure we’ll find it.”