Settlers began arriving in the area in the 1870s, and a post office was established in 1888. Six year old Sidney Walters and his parents were staying with Hiram Otis, the local justice of the peace, and Otis decided that Sidney was a good name for the town. The following year, Montana became a state and Sidney was incorporated in 1911.
The town's museum, the MonDak Heritage Center, was founded in 1967. The museum houses artifacts and archives that detail the history of life in eastern Montana and western North Dakota since the first pioneers arrived in the late 19th century.
Sidney relies heavily on farming, ranching, and oil production for economic stability. The surrounding countryside is populated with many farms and cattle ranches, plus oil exploration activity. The area's main cash crop are sugar beets, and Sidney is home to a sugar beet factory, built in 1925. The factory is the largest employer in the city, next to the Sidney Health Center and Sidney Public Schools. The town is served by Sidney-Richland Municipal Airport, one mile west of the central business district.
Sidney has three public schools; one K-5 elementary school, a 6-8 junior high school, and a 9-12 senior high school. There are no institutions of higher education located within the city, however, and Williston State College in North Dakota is within commuting distance. MSU-Billings offers courses through telecommunication, and Sidney High School has a variety of adult education classes each year.
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