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March 2008

State Roundups
North Dakota

State “moooves” up to beef grading

In hopes of adding value for beef processors as well as cattle ranchers that supply them, late last year the state Department of Agriculture began offering beef grading services to in-state slaughterhouses. Such grading isn't mandatory, but it helps processors improve their retail marketing because it gives consumers a better idea of quality.

The service is an expansion of a six-year-old meat inspection program and was done in cooperation with the U.S. Department of Agriculture. The state currently has 17 slaughter facilities that are state or federally inspected. But grading is not part of the inspection process, and processors have to pay for such services.

In the past, processors that wanted grading had to have an inspector flown in at their cost. Processors still have to pay similar labor costs for the state grading service, but travel and lodging costs will be significantly lower.

Farm trickle-down effect

You'd think is was Valentine's Day all last year for the state's farm economy, because it seemed that almost everything was coming up roses.

Wheat, barley and corn prices were strong, and yields were good. The same was true for many pulse crops; production of dry edible beans came within a whisker of the state record, and September prices were one-third higher than the preceding year.

Land prices were also up dramatically—which isn't necessarily a benefit to those renting, but is still a good indicator of ag health. From January 2003 to January 2007, an average acre of farmland in North Dakota rose in price by 50 percent; anecdotes suggest that commodity prices might be pushing up current land prices even faster than that heady rate.

The financial good times for state farmers can be seen in other, related sectors. For example, implement dealers in the state reported a bumper crop of their own sales. Some reported selling out their inventory.

Implement dealers and equipment makers in the state have also benefited from a weak dollar and a healthy farm economy worldwide. That dynamic has brought Canadian farmers across the border to buy machinery, thanks to the exchange-rate discount. Farm equipment exports have also reportedly surged to former Soviet Union states like Ukraine that grow similar crops and use similar farming practices.

—Ronald A. Wirtz