FARGO — Gov. Doug Burgum hosted an ag roundtable with leaders of the state’s top commodity groups Monday, June 14, in Fargo. The topics at hand were related to the ongoing drought the state is experiencing and a carbon market, which could be a new revenue stream for farmers and ranchers in the coming years.

The most concerning issue of the afternoon was the drought. According to the U.S. Drought Monitor’s latest report, nearly 50% of North Dakota is categorized in an extreme drought. Nearly 20% is in exceptional drought — the most dire rating on the drought monitor.

“The situation is very tough and we heard that during the roundtable today from all the major commodity groups. It’s tough all over, but it seems to be particularly tough in central North Dakota and north central North Dakota,” said Burgum. “That’s an area that hasn’t been able to pick up any rain at all this spring. This has been one of the driest periods in the history of the state since we started recording moisture.

“We started in a real deficit this spring. Some places have got a little bit of relief, but we need moisture all over the state,” continued Burgum. “Some of the crops have already taken a yield hit because of the dryness they have been experiencing so far. Our producers are some of the best in the nation and the world, but this is another year that is going to call for perseverance and innovation as we work our way through a tough situation.”

Brenda Elmers with the North Dakota Corn Growers said corn is faring well overall amid the drought conditions. “We are very much concerned and very much watching what happens around the state. Corn, overall, will maybe be OK if we continue to get rain,” she said.

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Harrison Weber with the Red River Valley Sugarbeet Growers noted during the roundtable that as of now, the American Crystal sugarbeet crop is “OK.” Of the 400,000 sugarbeet acres that were planted, about 10,000-15,000 were replanted caused by poor emergence due to the seed being put into dry ground. “The middle of the valley, around Hillsboro and Ada, is in a little bit tougher shape than the rest of the valley, but all in all, we are OK.”

“The stands are not good. They are thin. The soybean conditions right now are 1% excellent. For this time of year, that is not good at all. 46% fair, 23% good, 20% poor and 10% very poor. With 7 million acres, 20% poor is pretty astounding at this time,” said Joe Ericson with the North Dakota Soybean Growers.

The theme for Dan Wogsland with the North Dakota Grain Growers was, “small grains are in trouble.”

“We’ve experienced some excellent yields over the past couple of years. We aren’t going to see that this year,” Wogsland commented.

During times of adversity and crisis, Burgum noted it is crucial that he and the commodity grower groups meet to share their struggles and concerns.

“It’s super valuable to hear from these folks who represent the growers. Of course, with the diversified ability we have in North Dakota to grow dozens of crops, and grow them well, it’s important that we have the soybean growers, the grain growers, the corn growers all together in a room,” he said. “It’s great to have all of the perspectives, great to have them here. They do a great job to represent all of their respective grower groups and each have got different issues, but they are a fantastic resource.”

Carbon markets

The implementation of a carbon market may mean a new revenue stream for growers and producers.

“It’s an opportunity that will grow over the coming years for North Dakota farmers and ranchers to get paid for what they are doing right now,” said Burgum. “Naturally, the soil we have, the crops that we have, the rangeland that we have absorbs carbon, and in a world where there is $45 trillion being driven towards the ESG (Environmental, Social, and Governance) investing, which is investing, that is creating capital flows which move towards those that can help manage in a carbon-constrained world. We can see on the horizon now that there are a lot of things coming that would allow payments to be made. In our office, we’ve heard examples as high as $20 per acre.”

How it would work is the grower or producer would be paid for practices they already have implemented in their operation, and in turn, that becomes a carbon offset for another company or individual that is emitting carbon somewhere else.

“For the most part, our farms and ranches are absorbing carbon as opposed to emitting carbon, and those offsets could create a business opportunity for North Dakota farmers and ranchers," said Gov. Burgum.

“There are all kinds of innovation that is occurring, whether that is carbon sequestration, that means taking the carbon out of the emissions and putting it back into the ground, using CO2 for enhanced oil recovery, using CO2 to put into greenhouses to grow crops faster year round,” said Burgum. “We really think that CO2 has an opportunity to become a value-added element and that people will pay us to store it. Some people may actually be paying to use it because it’s going to be valuable to them. A whole industry will be built around CO2, and in North Dakota we can play a very important role because we have the geology to store it.

“We’ve got the resources to utilize it, and that innovation is going to create a future where both the energy industry and ag industry, our two most important industries, are actually going to have an opportunity to work together economically to solve some of the world's problems, but also those are business opportunities,” continued Burgum. “For North Dakota, this could be a big plus, where we can actually make money and make more money in a carbon-constrained world.”

Through this opportunity, Burgum noted that North Dakota can be a carbon-neutral state by 2030.