Agricultural Production, Productivity, and Research Investment in North Dakota

➩ North Dakota agriculture faces a profitability challenge. Farm receipts and crop yields have increased substantially, especially after 2000, but rising production costs have limited growth in real net receipts, particularly in livestock production. Higher gross revenue has not translated into equally strong farm‐level economic performance. 

➩ Rising input costs have become a central constraint. Recent agricultural growth has occurred alongside higher spending on production inputs, including labor, machinery, seeds, fertilizer, fuel, pesticides, and herbicides. This cost pressure makes productivity growth increasingly important for sustaining farm profitability. 

➩ Productivity growth has weakened after earlier long‐run gains. North Dakota’s strong productivity growth after 1960 followed rapid public agricultural research and development growth before 1960, while productivity stagnation after 2000 followed slower research investment growth in earlier decades, especially the 1990s. This is consistent with the long‐lagged effects of agricultural research. 

➩ Agricultural R&D is associated with long‐run returns. Estimated internal rates of return range from about 20.2 to 28.4 percent across research‐stock lag distributions, while modified internal rates of return remain more stable at about 9.5 to 10.4 percent. The estimates indicate economically meaningful returns across specifications. 

➩ Sustained R&D investment can support future production capacity. Counterfactual simulations suggest that continuing the 2000–2015 real agricultural research and development growth rate during 2015–2025 would have generated $7.47 billion in additional agricultural production through 2075, implying a benefit‐cost ratio of around 40. The results highlight the long‐run value of maintaining research investment before productivity losses become visible.

Recommended Citation: Junkan Li, William Nganje, and Sandro Steinbach (2026). Agricultural Production, Productivity, and Research Investment in North Dakota. ARPC Report 2026–02. Agricultural Risk Policy Center, North Dakota State University.