Governor ties South Dakota's economic future to U.S. defense, national security
Coalescing ag, energy, banking prowess with national security focus of Rhoden's State of the State address
An unusual convergence of power in Washington and a rapidly evolving U.S. military has South Dakota poised to be a quiet but critical hub of America’s national security economy.
That’s the push Gov. Larry Rhoden made Tuesday in his first-ever State of the State address, calling on lawmakers at the state Capitol to no longer think of food, energy, data, finance, manufacturing and military readiness as standalone in. But instead, the Union Center rancher is urging legislators and all South dakotans to consider how ag producers, military contractors, banking institutions and technology firms operating here holistically contrubute to the America’s national security.
“Our state is punching above our weight in national security,” Rhoden said before announcing what his administration is calling a “systems approach” to organizing the state’s economy with a mind on bolstering U.S. independence.
The strategy builds on former Gov. Kristi Noem’s focus on making South Dakota a cybersecurity center during her six years as governor. Rhoden said his initiative is an even loftier goal.
“Today, I am taking it a step further. I am declaring that national security is South Dakota’s next big industry,” he said, asserting that the state’s economy already has the ingredients to position South Dakota for a key role in U.S. national security operations.
Rhoden pointed to the state’s growing political and military footprint in Washington as a key reason the strategy is now viable, citing Noem’s role as U.S. secretary of homeland security, John Thune’s position as U.S. Senate majority leader, Sen. Mike Rounds’ work on the Armed Services Committee, and Troy Meink’s appointment as U.S. secretary of the Air Force. U.S. Department of Agriculture Undersecretary Luke Lindberg also hails from South Dakota.
The next-generation B-21 Raider bomber is also slated to arrive at Ellsworth Air Force Base in western South Dakota, making the state the first in the nation to host the Air Force’s newest stealth aircraft.
Bill Even, commissioner of the Governor’s Office of Economic Development, in an exclusive interview ahead of the State of the State address, said the state has quietly accumulated assets the federal government and defense industry rely on — but until now they have developed largely in isolation.
“We want to make sure that we’ve got a systems approach and that we’re understanding how these things can connect together,” Even told The Dakota Scout.
South Dakota already hosts or controls a rare combination of national security-critical industries, Even said, including food production, energy generation, cybersecurity, defense manufacturing, financial services and secure communications.
At the center of the military piece is Ellsworth Air Force Base, which is set to become the first base in the nation to receive the B-21 Raider, the Air Force’s next-generation stealth bomber. All future B-21 pilots will train in western South Dakota, turning the Rapid City region into a long-term hub of U.S. airpower.
“Ellsworth’s been there for years. Now it’s the lead in this next generation of airborne warfare,” Even said. “That’s a strategic advantage.”
The defense footprint is already expanding beyond the base. Last month, Sioux Falls-based MMS Products announced it had received a $35 million federal contract to produce warheads and munitions for the nation’s growing drone programs, a development Rhoden highlighted as proof that national security firms are already gravitating to the state.
“Businesses are already recognizing South Dakota as a great place for national security companies,” Rhoden said, singling out MMS Products as a leader in drone-munition innovation.
MMS Products’ Kyle Chase told The Scout that the company established in 2022 in Florida chose South Dakota as its manufacturing hub because of the state’s history for a strong, pro-growth business climate and the accessibility of state and federal leaders “who have a clear commitment to U.S. national security.”
“The Department of War is making historic investments in critical technologies, drone dominance, and cyber security and Gov. Rhoden rightly recognizes that South Dakota is uniquely positioned to lead from the front when it comes to delivering these capabilities,” Chase said. “MMS has welcomed our partners across the unmanned system sector to join us in South Dakota and we look forward to continuing that mission to further bolster South Dakota’s defense industrial base.”
Even said the company is just one part of a much larger, mostly invisible defense ecosystem.
Those companies are drawn by lower costs, a stable workforce and a lower profile than coastal defense hubs, Even said, as well as access to Ellsworth and Dakota State University in Madison, which has emerged as one of the country’s fastest-growing cybersecurity centers.
That’s also helped push the state’s cybersecurity industry to grow by 350 percent over the last decade, the second-fastest growth in the nation. And today, there are 8,000 South Dakotans working in those fields within South Dakota’s borders, Even noted.
Dakota State is now home to two sensitive compartmented information facilities, or SCIFs — secure rooms where classified government and military discussions can be held. A third SCIF is being built in Sioux Falls, allowing Pentagon contractors, intelligence agencies and defense firms to conduct top-secret work in South Dakota.
“This is where you have to go to have classified military briefings… defense industry contractors, cybersecurity contractors, and or national security, national intelligence,” Even said. “The fact that we only had one and now we’re just building the third is pretty rare nationally.”
Food production is another pillar of the strategy. Rhoden said “food security is national security” and pointed to the new High Plains Processing beef plant near Mitchell as a half-billion-dollar investment that will create new markets and better prices for farmers.
Even said South Dakota’s beef, pork, dairy, corn, soybean and biofuels industries make the state critical to U.S. supply chains at a time when the federal government is increasingly concerned about disruptions and foreign dependence.
“The old adage that the army runs on its feet in its stomach is what the point is,” Even said. “We produce a lot of food and we take that for granted, I think, as a wealthy nation, but it’s really important for national security.”
Energy is treated the same way. South Dakota produces wind, hydroelectric, coal-fired, natural gas, biofuel and solar power and is considered a net exporter, generating more electricity than it consumes. Rhoden is also continuing the state’s exploration of small modular nuclear reactors to provide long-term, reliable power.
“Energy reliability is now being treated as military infrastructure,” Even said, citing the need to support data centers, defense facilities and advanced manufacturing.
The state’s financial sector also plays a role. Nearly $1 trillion in trust assets are managed in South Dakota, giving it an outsized footprint in U.S. financial infrastructure that Even said is increasingly viewed as part of national security.
To support the shift, Rhoden is proposing new investments aimed at hardening the state’s systems. His 2026 budget includes millions for strengthening state information technology, creating redundancy and reliability in the state radio network used by law enforcement and emergency services, and adding a cloud-based cyber backup system.
The budget also includes $300,000 for a feasibility study to identify potential sites for future small modular nuclear reactors.
Both Rhoden and Even were candid about why the administration believes South Dakota has a rare opportunity to assert itself nationally, particularly with the unprecedented influence South Dakota has on Capitol Hill.
Rhoden said the goal is to ensure South Dakota is no longer seen as peripheral to national defense and economic stability, but instead as a place the country cannot afford to do without.
“National security creates major opportunities for South Dakota, and we need to seize them,” Rhoden said.
