Economic Contribution of the Sugarbeet Industry in Minnesota and North Dakota

Abstract

Agricultural industries in small geographical areas with limited acreage tend to be overlooked by those not associated with the growing region or industry. Sugarbeets continue to be produced in a relatively small geographic area and on relatively limited acreage in Minnesota and North Dakota. These factors, along with continued debate over policies affecting domestic sugar industries and recent industry expansions, help justify a continued assessment of the economic importance of the sugarbeet industry to the regional economy. Revenues from sugarbeet production and expenditures by processors to Minnesota and North Dakota entities in fiscal 2011 represented the direct economic impacts from the industry. Expenditure information was provided by sugarbeet processing and marketing cooperatives. Secondary economic impacts were estimated using input-output analysis. The sugarbeet industry, which included the growing regions and processing plants located in the Red River Valley of Minnesota and North Dakota and west central Minnesota planted 652,741 acres and processed 15.5 million tons of sugarbeets in fiscal 2011. Production and processing activities generated $1.7 billion in direct economic impacts. Gross business volume (direct and secondary effects) from the sugarbeet industry was estimated at $4.9 billion. Direct and secondary employment in the industry was 2,473 and 18,830 full-time equivalent jobs, respectively. The industry paid $15.4 million in property taxes and was estimated to generate another $105 million in sales and use, personal income, and corporate income taxes in Minnesota and North Dakota. In real terms, gross business volume of the sugarbeet industry in Minnesota and eastern North Dakota has increased 185 percent since 1987. Increases in business activity from the industry have resulted from increased production, processing, and marketing activities, as well as relatively high sugar prices during fiscal 2011.