At the Watertown Chamber’s Farm Business Banquet November 20, Governor Larry Rhoden felt the need to repeat the agriganda that agriculture is South Dakota’s number one industry:
In South Dakota, we know that ag is king, and it’s our number one industry, But I’ve said many times that that’s an understatement, because our ag industry outpaces our number two industry by like six times or seven times [Gov. Larry Rhoden, audio in Steve Jurrens, “Governor Larry Rhoden Highlights Agriculture’s Economic Power at Watertown Farm Banquet,” Northeast Radio, 2025.11.21].
I don’t know what chronic inadequacy Larry and ag industry are compensating for, but they need to stop telling economic fables. A November 5 report from the Dakota Institute on South Dakota’s volatile economy notes that by GDP, agriculture is far from the biggest player in South Dakota’s economy:
Agriculture dominates headlines and drives quarterly volatility, but it accounts for less than 8% of South Dakota’s economic output. Figure 2 breaks down the state’s $58.14 billion economy in Q2 2025 by industry, revealing a structure far more diversified than the state’s rural image might suggest. Finance and insurance leads at $8.03 billion (13.8% of total GDP)—nearly twice agriculture’s contribution. This reflects South Dakota’s decades-long cultivation of a banking-friendly regulatory environment, particularly for both credit card operations and trusts. Healthcare and social assistance follows at $6.33 billion (10.9%), while real estate and rental operations contribute $5.98 billion (10.3%). Together, these three service industries account for more than a third of the state’s economic output.
Agriculture, forestry, fishing, and hunting generated $4.52 billion in Q2, representing 7.8% of GDP [Devan Schaefer, “From Fields to Finance: South Dakota’s Economic Landscape in Early 2025,” Dakota Institute, 2025.11.05].
Wow—if agriculture did outpace our number two industry (“number two industry”—that would be agriculture with all of its bullshit, right?) by “like six times or seven times,” it would be generating gross domestic product of between $38 billion and $44 billion, around half of South Dakota’s $77B GDP in 2024. Governor Rhoden’s exaggeration outpaces ag’s actual $4.5B output by like eight or ten times.
Contrary to the numbers Governor Rhoden pulls out of his hat, by GDP, agriculture is our number five industry. It does not outpace our number two industry, health care, by any times; health care generates 1.4 times the economic output of agriculture, and our number one industry, finance and insurance, generates 1.8 times ag’s output.
But the funny thing is, I never hear my investment manager bragging about how much more business he does than his farmer neighbors. I don’t hear bankers or doctors or real estate agents or government workers bragging that they outpace the tractor jockeys in economic output. They all just keep investing and banking and healing and closing and serving touting their economic superiority, never mind inflating it with imaginary numbers.
Funny: that very same day, at a meeting in Sioux Falls, Governor Rhoden accused fellow Republican and Senate President Pro Tempore Chris Karr of spreading “misinformation” for advocating stronger regulation of the ag-industry’s pollution. Senator Karr was responding to actual evidence of agriculture’s actual harmful outputs. Governor Rhoden is the actual misinformer, carrying on a long industry and state tradition of exaggerating agriculture’s economic output.