New opportunities for ag with Ag Commissioner Doug Goehring

In the final episode of NDFB's Straight Talk legislative season, your host, Emmery Mehlhoff visits with N.D. Agriculture Commissioner Doug Goehring.

The 68th Legislative Assembly was a success for agriculture in North Dakota.

Landmark changes to the "corporate" farming structure in North Dakota will help expand animal agriculture and create partnerships that were unavailable before.

Zoning and infrastructure changes to help counties and townships come into compliance ag zoning ordinances and upgrade services were all passed by legislators and signed by the governor.

To learn more about how NDFB lobbyists viewed legislative outcomes this year, read the highlights from the last episode of Straight Talk here.

Contact Ag Commissioner Doug Goehring at ndda@nd.gov

Contact Straight Talk host Emmery Mehlhoff at emmery@ndfb.org

To learn more about NDFB policy positions, visit ndfb.org/policy

Transcript

[Straight Talk theme]

[00:08] Emmery Mehlhoff: Welcome to Straight talk with NDFB. This is your host, Emmery Mehlhoff. In today's episode, I visit with Agriculture Commissioner Doug Goehring about the 2023 Legislative Session and how the landscape has changed for agriculture in North Dakota. Commissioner Goehring visits with me about how bills passed during the 2023 session will benefit our livestock and crop producers around the state. Join me for our conversation. 

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[00:40] Emmery: Well, welcome. I have Commissioner Doug Goehring with me today. Commissioner Goehring, why don't you just go ahead and actually tell us a little bit about yourself. You've been the Ag Commissioner for quite a while now, and I believe you are still a good, honest farmer, is that right?

[01:01] Commissioner Doug Goehring: [Laughs] Yes. I'm, Doug Goehring, North Dakota Agriculture Commissioner, have been the agriculture commissioner since 2009, so 14 years now. I would like to say that I've loved every part of my job up until COVID. Then the world all of a sudden wanted to just stay home, shut down, tune out, and it's like, holy cow, people, we still have life out here. We still have an economy. There are still national security issues. So that made it a little daunting there for a while, but we've worked through it. I believe we're really starting to engage or at least get the rest of the world to engage with us again. 

I'm proud of the fact that in spite of executive orders during that period of time that sent people home and told them to go isolate, we stayed to the task, which was, as a government, we are here to serve. And that means we need to be engaged. We need to assist people and really help try to migrate through all the issues in the world. 

Our job is not to provide everything for you. Our job isn't to do everything for you. Our job is to assist you and help you be successful and in a sense, be all that you can be to society and be a functioning individual in our economy, our communities. We're all here to be a part of and serve others. 

My background has been I've been a farmer all my life. I've served on various boards, commissions, local, state, national level. Was the vice president of North Dakota Farm Bureau for many years. I'm trying to do this by memory, but I wanted to say all the way from 2002 until 2008, I was the vice president. I've also been the county president of Burleigh County Farm Bureau, been a member of various organizations, soybean, corn, even the grain growers. Served an executive position there. I have served at the national level on the United States Soybean Board and part of international marketing there in the United States Soybean Export Council. Served as president of Nodak Mutual for many years, up until 2009, 2008, I guess it was at the end of 2008. So played a role in many areas and have enjoyed it thoroughly and now understand what the path the good Lord was taking me down. All of that was to expose me to things in the world that ultimately I would end up having to use in this job. So it's a good thing.

[03:56] Emmery: We just finished the Legislative Session and all of the representatives and senators are back at home, either on their farms or back to their normal jobs. And what I want to talk about today is really how we see agriculture faring post Legislative Session, it was probably one of the hardest working sessions for animal agriculture in North Dakota. So if you could touch a little bit on, from your perspective, what you see we've accomplished in the animal agriculture sector, that would be awesome.

[04:34] Commissioner Goehring: I'll tell you that a lot of legislators on the very last couple of days came up and visited and said, we're proud that after decades of being here, this has probably been one of the better sessions for agriculture in general. And a handful of them cited the fact that even the changes to the anti-corporate farming law has now made it possible for animal agriculture to have a place and raise the capital and create the partnerships and the opportunities that really bode well for many grain farmers in the state. And I think there's been this misconception that it is about animal agriculture, but many of our animal ag producers weren't necessarily looking to add more aspects to their operation. I mean, maybe some of our livestock producers, beef producers, might have wanted to do a little bit more with feed lots, but there was nothing to preclude them from doing that now, other than if they were going to try to go to a bigger size sometimes. Capital was certainly a limiting factor. 

But when it came to dairy and it came to swine and poultry, we really were shut out of the game. And if you look around the surrounding states, all of our neighbors, 40% to 50% of their agricultural receipts, their gross receipts in agriculture were from animal agriculture. In North Dakota, we were closer to 14- 15% of our gross receipts in agriculture came from animal ag. So we could tell through all this, and there had been a lot of discussions leading up to this session, how can we come in with a proposal, work with others to address the shortfalls we have? Because if you're going to build a swine facility, one that's economically viable, mind you, you're probably going to be $17 to $30 million. 

[06:48] Emmery: Wow!

{06:49] Commissioner Goehring: And no bank is going to just step up and give you the money. Plus, if you don't have a lot of that expertise, they're going to be a little apprehensive. You really need partnerships. You need the expertise. 

If you're looking at dairy, oh my God, dairy. You were $40 to $70 million for an economically viable facility. If you're looking at a poultry facility and actually I had a poultry facility that wanted to come to North Dakota five years ago. Met with them and they were excited because of the biosecure environment we have, the abundance of feed. They really thought they could set up a base of operations here and I forget how many laying hens, but it was a cage free facility and they would be shipping eggs all the way to California. And they said, "Hey, we'll make money." But I said, "So how much money does it cost to build a facility?" [They said]"About $82 million. And all we need to do is partner with some of your surrounding farmers because we have to have a manure management plan in place. We also need to make sure that we're securing feed products, feed stocks, and we'd either build our own feed mill or we'd make sure that if we could have a feed mill in the area, we would let them know what we would need and then they could actually enhance their facility and make sure they did that." The problem is I had to tell them at the time partnerships were not going to be an option. So they left and that was unfortunate because we lost some real opportunities and that's what's happened. 

Over a period of time, we've continued to see our dairy industry falter and fail. Our swine industry has not really done much and it's just been unfortunate we haven't been able to do much there. So along those lines, ultimately what happened was there was an agreement struck that an animal ag facility, something along the lines of either a feedlot or a dairy, could purchase up to 160 acres for their operation. 

If you were a swine facility or a poultry facility, about 40 acres was going to be your max. Keep in mind the law would still not allow you to farm. So even if you had a few set aside acres there on that dairy operation, let's say you had 40 acres there, you're going to have to work with a neighbor to come in and you're going to have to rent that to him. And he's going to farm and either produce some forage for you or feed, or he's maybe going to do a different cash crop with it. But that's the way it is. You could have up to ten members, although looking at that structure, there's ways in which you can work within those ten members to make that all work because of the way the entity clause is. But it does create opportunities for investment and partnering so that you could have some animal ag facilities get established in North Dakota and we could start building from there. 

And most of our grain farmers are the ones that are interested in these types of ventures because they can sell, feed and forages. But the big aspect is getting some of that manure in that manure management plan. So big deal. There is a belief that we're going to be able to do a lot more going forward.

[10:32] Emmery: In a year where fertilizer costs are very high. So with some of those supply issues, having that local, honestly, the most natural fertilizer God gave to man available is a significant benefit for our crop producers.

[10:54] Commissioner Goehring: It is. And to your point, whether you want to call it all natural or not, yes, but it's such a complete form. You get the micronutrients, you may have to enhance it a little bit by adding a little more nitrogen, but the phosphorus and the potassium which are so desperately needed in crop production, it's all there. And it's a big deal. When I've talked to farmers, producers in other states, Iowa, and those places where they're already saturated with hogs, they really don't have an opportunity to have any more farrowing facilities. So they like to see if they can do partnerships in other states. And then what they really want out of the deal is the little pigs so that they can feed them up and finish them out. And you know what their biggest thing is? It's not about adding value to their corn and running it through those pigs. I mean, that helps, too. And they like that. It's the manure they get on the backside because initially, right off the bat, it has a bottom line difference when they're farming because it's removing $100 to $150 an acre in a direct cost for fertility in their operation. So, yeah, they're getting the benefit of getting to feed their own feed, but that's such a small portion of their operation. It's the other side that has such a dramatic impact and effect. And I see opportunities for north Dakota continue to grow on that. 

We're at the front end of this, so we have years to develop it to get better, just as the industry has done. And a lot of these new animal facilities, they are not what we remember of the '70s and the '80s. I've walked into facilities where.... a hog facility, for example, the waste of the pit was actually beneath the barn, and you couldn't even hardly tell when you walked in there. When you drove up, you didn't smell anything. You could barely smell anything. You knew it was an animal ag facility. Same way with these dairies, some of these new dairy, the way that they're built and what they're doing, they're actually putting liners over the top of their pits because they're trying to capture the gas. They're looking at biodigesters. They're also trying to make sure that they're minimizing the smell, but they're capturing more of the nutrients. So when they do look at expelling and distributing the manure, they have even a better product that's now being injected and managed out there. So they're so impressive. And I think it's a matter of North Dakotans and the public in general getting very familiar and seeing more of what animal ag is now that will even help it going forward more.

[13:55] Emmery: So what are the opportunities for a young producer or somebody who's interested in diversifying in this way? How can we jump on board and make it happen?

[14:07] Commissioner Goehring: That's a good question. I think it's going to be different for everybody. I don't think there's one particular model that fits any one operation. Certainly finding partnerships. Those that have the expertise, those that would be willing to come in and build some barns, look at certain aspects of what's available for resources in a community. Processing, for example, might be part of it, or future processing. 

There are facilities, there are those entities, those individuals in other states that are looking to come to North Dakota. I don't know if it's a matter of playing matchmaker. Maybe somebody needs to set up a website and say, "Hey, interested animal ag for North Dakota? Here, sign on here. We have producers that are interested. We can give some locations." Maybe it's a matter of filling out that questionnaire that says, "Hey, I got so many acres in my area and there's so many others in my area that are interested also in animal ag. We'd love for someone to come and we could do a partnership and sell you a quarter of land and you could get established and potentially could write contracts for 30,000 acres for your manure management program or 10,000 acres." Because you're going to be looking at that type of deal. First they have to do the manure management. 

Then you're going to be looking at the feedstock side of it for forages and feeds and commodities. We do have an abundant, I want to say an abundance of feed mills in North Dakota. I think there's about 68 of them. So those are things that are going to be of interest to any of these companies coming in. But I'll tell you right now, they're waiting with bated breath because they want to make sure that this isn't going to be challenged, that this law is going to stand, how it's been passed. They're also trying to understand the uniqueness of it. Where do they fit in, what type of partnerships do they have to look at and what they can do going forward. 

Certainly young producers would have an opportunity to potentially partner with some of these. If someone wanted to do it on their own, I think there's some other things that you have to think about. That if you're going to incorporate, you're going to have to provide a level of trust and credibility to your partners as to what's your expertise in feeding or milking or producing in an animal ag facility before you're going to get people to sign on. So generally, partnering with somebody that's already in the business is just a better option for most. But I'm not going to tell people what they should or shouldn't do. I'm just going to tell them what these are, some of the realities of it.

[17:08] Emmery: Yeah, it really is new territory for our state. And there's been supporting legislation passed too to give the townships and local communities some extra help for infrastructure and some incentives for them, is that correct?

[17:25] Commissioner Goehring: Yes. In fact, there's a couple of other bills out there, some that will help political subs become compliant with the state model zoning ordinance. We found through studies over the last couple of years, there are a handful of counties and 30-some townships that have very strange ordinances in place, things that quite frankly have never been legal, but I think were created out of fear. I remember back in '90s, had DRC and a few other activists and groups out there that were going around and handing out templates of, "This is what your zoning ordinance should look like." And it was nowhere close to being compliant with state law. And until they were challenged or it was pointed out, they are not compliant, they need to be compliant. So we actually have funds set aside to help them be compliant to drop new zoning ordinances with respect to what the state model zoning ordinance says and allows you to do. 

There's also the ad program. There's an infrastructure program aspect added to it too, which would help where you have potential processing for animal ag or animal ag operations that may come into a community. And let's say there's some limitations with power. Maybe some of it is switching from single phase to three phase. Maybe it's some water issues, waste management issues. You could be looking at some potential road issues. And although that's kind of a slippery slope you got to go down, there are some things that could be considered though, that could really help with the infrastructure needs for any new animal ag facilities coming into our communities.

[19:29] Emmery: It's exciting to have that support out there, realizing that this is new for our state, this is new opportunities, but also comes with the responsibility of getting all that zoning up to snuff, to be able to handle it and the infrastructure. And so it'll be interesting to see how that develops over the next few years. So briefly here, could you just touch on some of the other opportunities that are coming down the pike for agriculture as a result of the session? I understand we're getting a new experiment lab. That's exciting, a new building there. And then what are some of the other things that we'll see in the agriculture sphere?

[20:14] Commissioner Goehring: My duties and responsibilities cross over into so many different areas, energy and ag and infrastructure and trade and business development. There's a lot of stuff going on. For example, we're dealing with it right now is building the framework for a new post production royalty program, an ombudsman program that's going to help with respect to some of the issues that exist out there on post production requirements and payments that are being made for mineral owners. That's been fashioned a bit after our reclamation and restoration pipeline program, that ombudsman program. Plus we had one in place for wind energy, so we're putting some of the framework together. There no promises that we're going to resolve things, because one of the things we first have to recognize and work through is there is a working contract in place. It's a legal document. It's trying to find out how can we have compliance with that contract, but also have clarity. We know it's going to take a while and it's going to be daunting, but we're going to put our best foot forward and try to help a lot of those producers, a lot of those royalty owners who are landowners and citizens of North Dakota. 

We also saw some bills that got passed that deal with the disposal issue on those wind turbine blades and trying to find other uses for them, maybe even potentially looking at recycling, potentially even doing some coal fire for some of our electric generation facilities. Just because our department runs with 140 plus programs, we have a lot of things that are just updated language and rules based on what's happened at the federal level. Continuing appropriation on the FELIR Committee, which is the Federal Environmental Litigation Review Impact Committee, $5 million there will continue to support any WOTUS litigation, Waters of the US. And also studies in the future that we'll need to defend ourselves from those entities out there that continue to try to petition for endangered and threatened species, which continues to hamstring the energy industry, the ag industry, developers, anybody trying to do anything out here with this precious natural resource that we have that we manage. 

Understand, in North Dakota, 90% of all of the land is either owned, operated, or managed by farmers and ranchers. We do a great job. We have great habitat. So why punish us? Why try to take more control away from us and believe you can do it better as a federal entity or some NGO. A lot of that stuff. I would say we'll continue to watch and monitor.

[23:21] Emmery: It's really exciting to hear about everything that has come down the pike this session that will be implemented in this next biennium here. And to see just the development and opportunities in the countryside and all the hard work that you guys do, obviously, in your role, Commissioner, on all of the different boards and committees that you sit on, but also, like you said defending North Dakota on the federal level, representing agriculture. And then all the work that your department does supporting our farmers and ranchers out there. Thank you so much for visiting with me, and I'm sure we'll be talking again to see how things continue to develop over the next two years and all the opportunities out there for our producers.

[24:06] Commissioner Goehring: You bet. It's been great. Emmery, thank you.

[Straight Talk stinger]

[24:12] Emmery: You've been listening to Straight Talk with NDFB. Thank you for joining me for this legislative season as we've discussed, agriculture policy around the state. Keep a lookout for our next season of Straight Talk with NDFB coming soon.

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