The North Dakota legislature passed a new law designed to attract more livestock operations and take advantage of feed production that is both currently produced and will be coming online in the next few years.

State Rep. Paul Thomas, a Republican from Velva, North Dakota, introduced House Bill 1371, which would amend North Dakota’s strict anti-corporate farming law to allow limited corporations to operate feedlots, dairy operations and slaughterhouses. It passed the state House 72 to 20 and the Senate 41 to 5. Gov. Doug Burgum is expected to sign the measure.

North Dakota Farmers Union, which has long opposed changing the state’s corporate farming law, was “neutral” on the measure after Mark Watne, the group's president, testified the bill was amended to address several of his group’s concerns.

Livestock operations will be able to attract outside investment, but with several limitations.

For example, the majority of shareholders in any livestock corporation must be operators, the number of shareholders will be limited to 10, and the amount of farmland the corporation can own is capped at 160 acres.

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The North Dakota Ethanol Producers Association supported the bill, noting its industry produces 1.5 million tons of dried distillers grains (DDGs), a high-quality, protein-rich livestock feed, and 90% of that is exported out of state.

In a background paper on the bill, the North Dakota Department of Agriculture pointed out the state is falling behind neighboring states, like South Dakota, in attracting livestock operations, in part because of the significant capital required.

“A typical dairy has startup costs between $50-$67 million and a typical swine production facility has startup costs between $30-40 million. Not many family partnerships have access to this level of funding,” NDDA noted in a fact sheet.

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