11,400 Iowa workers laid off in agriculture economy downturn

If you’ve been following Iowa layoff news for a while, you already know about the thousands of layoffs at meatpacking plants like Tyson Foods in Perry, and the thousands—in smaller batches—of workers laid off at John Deere plants across the state (in part to move some operations to lower-wage countries like Mexico).

This week, the Iowa Farm Bureau actually quantified those losses for the state’s vast, 385,000-person agricultural workforce. And it’s not good.

(Starting Line’s Zachary Oren Smith and I also chatted about this on his podcast this week.)

The group found around 11,400 Iowa workers have been laid off across farm equipment manufacturers, food processors and other agriculture-related businesses, taking $1.5 billion from the state’s overall economy with it.

That’s a big deal in a state where agriculture is 22% of the economy, and where 20% of the workforce is employed in the sector.

So why is this happening? Basically two reasons:

• Prices for corn and soybeans are low: A lot more corn is being grown these days for export, and it’s competing with an increase in corn exports from Argentina, Brazil, and Ukraine. On the soybean side, China—one of the biggest importers of US soy—is buying a lot more from Brazil, primarily because of Brazil’s weaker currency (and thus cheaper soy). That is leading to net cash farm income plummeting 38% for corn and 40% for soybeans, to the lowest level it’s been in 15 years.
• Input costs are larger: While prices overall haven’t gone up a ton, because of their lower income, farmers can’t afford to do anything but tread water.

Passing a Farm Bill with provisions to address these issues might help. The latest version that just came out this week has some provisions about investing in the ag economy and helping trade—though Iowa’s senior Sen. Chuck Grassley is mostly just mad it took Democrats a long time to draft a new one.

What do you think would help Iowa farmers and ag workers? Email me here.