The Economic Impact of Soybean Farming in South Dakota

Soybean farming is a cornerstone of South Dakota’s economy, driving job creation, supporting local businesses, and contributing to global markets. As one of the state's top agricultural commodities, soybeans significantly bolster the economy, benefiting farmers, processors, and various industries that depend on this versatile crop. Understanding the economic impact of soybean farming underscores its importance not only to agriculture but also to South Dakota’s overall financial health.

South Dakota’s Soybean Industry at a Glance

Agriculture forms the backbone of South Dakota’s economy, with soybeans playing a pivotal role. In recent years, South Dakota has consistently ranked among the top soybean-producing states in the U.S., contributing significantly to both national and international markets. In 2024, soybean production was expected to total $2.77 billion, up 2% from the previous marketing year. (source)

1. Job Creation and Local Impact

The soybean industry stimulates employment across multiple sectors, from farm laborers and truck drivers to processing plant workers and export specialists. The soybean value chain supports thousands of jobs, generating revenue for rural communities and sustaining small businesses.

Key areas benefiting from soybean farming include:

• Agricultural Equipment Sales: Farmers invest in machinery such as tractors, planters, and harvesters, supporting local dealers and manufacturers.

• Transportation & Logistics: Soybeans are transported from South Dakota fields to processors and international ports, keeping truckers and freight companies active throughout the year.

• Processing & Manufacturing: South Dakota’s soybean processing plants convert soybeans into oil and meal, which are utilized in food products, animal feed, and biofuels. (source) 

Close to home in Mitchell, South Dakota, a new soybean processing plant is set to be operational by the fall of 2025. Once operational, this plant expects to employ 75-85 full-time employees. In addition to oils, this plant will also produce seed meal that is used to feed animals. Not only will this plant create a surplus of jobs internally, but it will also provide increased processing of commodities closer to where South Dakota farmers produce them, and ultimately create more jobs and revenue for local trucking companies, parts and maintenance firms, fuel providers, and sellers of machinery.

2. Fueling Global and Domestic Markets

South Dakota soybeans are integral to a global trade network. The United States stands as a leading soybean exporter, with South Dakota contributing a substantial portion of shipments to countries such as China, Mexico, and the European Union. These exports drive demand and help stabilize the farming industry, ensuring farmers receive fair prices for their crops. With over 60% of South Dakota’s soybeans exported overseas, soybean farmers find it critical to highlight the sustainability, quality, and reliability of their product to international customers. 

Domestically, the demand for soybeans is also on the rise. The renewable energy sector relies on soy-based biodiesel, promoting a more sustainable fuel alternative. Additionally, livestock producers depend on soybean meal as a primary feed ingredient for pigs, poultry, and dairy cows. (source)

3. Economic Sustainability for Farmers

For South Dakota farmers, cultivating soybeans represents a long-term commitment to sustainability and profitability. Advancements in precision agriculture, conservation practices, and crop rotation enable farmers to enhance yields while preserving soil health.

Many farmers employ no-till farming and cover crops to maintain topsoil, reduce runoff, and improve water quality. These sustainable practices not only benefit the environment but also boost profitability by lowering input costs and increasing crop efficiency. (source)

The Future of Soybean Farming in South Dakota

Looking ahead, soybean farming is poised to remain a driving force in South Dakota’s economy. Innovations in bio-based products, alternative fuels, and expanding export opportunities are expected to further enhance the industry's impact. As consumer demand for sustainable and locally sourced products grows, soybean farmers are well-positioned to meet future needs.

Supporting local soybean farming bolsters the state’s economy, fosters job growth, and promotes sustainable agricultural practices. Soybeans continue to be an essential component of South Dakota’s agricultural landscape, whether through food, fuel, or feed.