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(West Des Moines, IA) -- An Iowa Farm Bureau study is shedding light on how the agriculture economic downturn is impacting the broader economy in Iowa. The study finds the downturn has has led to 4,097 layoffs announced by 23-businesses this year. The study finds a much larger ripple effect resulting in the loss of up to 11,400 jobs. Iowa Farm Bureau economics and research manager Christopher Pudenz says it's also led to a reduction of $1.5 billion in value-added economic activity (GDP) and a $100 million loss to the state and local tax base.
“Ultimately, this starts with depressed incomes at the farm gate that have ripple effects on the Iowa economy,” said Pudenz. “For example, because farm incomes are down, farmers aren’t making the same machinery purchases they’ve made in previous years which means manufacturers, suppliers and retailers slow down production and are forced to lay people off.”
USDA’s September 2024 farm income forecast projects farmers are expected to lose nearly a quarter of their income in just two years due to slumping commodity prices and stubbornly high input costs. Net farm income, a key measure of profitability, is projected to decline 4.4% from 2023, following a record year-over-year drop of 19.5% from 2022 to 2023.
Pudenz said in Iowa, agriculture accounted for more than 22% of Iowa’s total economic output in 2022, according to a study commissioned by the Coalition to Support Iowa’s Farmers. Nearly one in every five Iowans are employed due to agriculture and ag-related industries, accounting for more than 385,000 jobs. “Agriculture is the heartbeat of the Iowa economy, and when agriculture struggles, those pains are felt throughout the state,” Pudenz said.
“This analysis underscores why a farm bill is so important - farmers need assurances as they try to balance economic uncertainty,” said Iowa Farm Bureau President Brent Johnson. “A farm bill extends beyond the farm and protection of our food supply; it also provides access to nutritional programs for families facing hunger, advances conservation efforts and spurs innovation through research. If a new farm bill isn’t passed, many critical programs will face significant interruptions,” said Johnson.