MITCHELL, S.D. (MITCHELLNOW) The South Dakota processing expansion began in earnest roughly 35 years ago when Poet biofuels began production of ethanol from corn in Scotland in the late 1980s. Since then, ethanol production has expanded to nine companies processing 740 million bushels into roughly 1.3 billion gallons of ethanol worth about $3 billion annually.
South Dakota could see a huge economic benefit from the $1 billion Net-Zero 1 plant proposed by the company Gevo for a site east of Lake Preston, where corn would be processed into sustainable biofuel for jets. Officials from Colorado-based Gevo said the proposed plant, which recently received a $1.46 billion commitment from the Department of Energy Loan Programs Office, could create thousands of jobs once operational.
The state has also seen rapid expansion of milk processing, with new or expanded cheesemaking plants in Milbank (Valley Queen Cheese), Brookings (Bel Brands) and Lake Norden (Agropur). The increased processing capacity has allowed the state’s population of milk cows to more than double over roughly the past decade, from 91,000 cows in 2012 to about 210,000 in 2023, according to the U.S. Department of Agriculture.
According to the USDA, South Dakota dairy farmers produced 4.5 billion pounds of milk in 2023, up from 3.1 billion pounds in 2020 and 2 billion pounds in 2013.
Agricultural processing plants serve as major employers in several South Dakota cities. The Dakota Provisions pork and poultry plant in Huron has variable employment that can range from 600 to 1,000. The state’s largest soybean plant, the AGP plant in Aberdeen that opened in 2019 at a cost of $300 million, has about 60 full-time workers.
In addition to jobs in the plant and an increase in production capacity for individual farmers, increased processing of commodities closer to where South Dakota farmers produce them creates jobs and revenue for local trucking companies, parts and maintenance firms, fuel providers and sellers of machinery, VanderWal said.
“We’re providing jobs or creating economic activity because those processing plants need supplies and parts and people to run them, and all those things that go along with that,” he said.
VanderWal said recent efforts to expand in-state processing of beef cattle, as reported by News Watch in 2023, would also generate new income and reduce costs for South Dakota ranchers, who raised 3.5 million cattle and calves in 2023, according to USDA data.
On Nov. 13, 2024, a 30,000-square-foot beef plant proposed for a site just north of New Underwood in Pennington County was awarded a $600,000 South Dakota Works Loan from the Governor’s Office of Economic Development for first-year operational funding.
“In the cattle industry, especially years ago, most of our feeder cattle actually got shipped out of state for feeding even, and then further processing,” he said. “We’ve put a lot of effort in the last few years into feeding them here. So we’re using our own feed stuff, so corn, basically, and silage and things like that. So then the next step to avoid having to haul them so far when they’re finished and ready for market, is to process them here.”