Iowa’s Ag Economy in Trouble: Over 11,000 Jobs Could Be Lost

Iowa’s agricultural economy is facing one of its toughest challenges in years, with around 11,400 jobs at risk and a staggering $1.5 billion hit to the state’s economic activity, as well as a nearly $100 million loss to the state and local tax base. According to the Iowa Farm Bureau, the downturn is spreading far beyond the farm, impacting cities, rural communities, and local businesses.

After reaching record highs in 2022, U.S. farm incomes have dropped nearly 25% due to several compounding factors. Iowa, where agriculture supports over 22% of the state’s economic output and employs nearly one in five workers, has been hit especially hard. Farmers’ income from corn and soybeans has plummeted to the lowest levels in 15 years, leading to widespread layoffs and reduced spending across the industry.

Why Is This Happening Now?

Several outside factors are driving the downturn in Iowa’s agricultural economy:

• Falling Commodity Prices: Global oversupply of crops like corn and soybeans has pushed prices down, while trade challenges have limited export opportunities to major markets like China.
• Rising Costs: Fertilizer, fuel, and other inputs remain expensive, eating into farmers’ profits. High inflation and supply chain disruptions have only made things worse.
• Unpredictable Weather: Droughts, floods, and other extreme weather events have made farming more challenging, cutting yields in some areas and overextending state coffers for disaster relief.
• High Borrowing Costs: With rising interest rates, it’s more expensive for farmers to finance their operations or invest in new equipment, leaving many unable to make necessary upgrades.
• Weak Global Demand: Sluggish economies in key import markets and shifting consumer preferences toward plant-based foods are reducing demand for U.S. agricultural products. Countries continue to look for cheaper ag products, no matter where they may come from.
• Policy Uncertainty: Delays in passing a new U.S. farm bill mean farmers lack access to vital safety nets and support programs, adding to their uncertainty.
• Animal Agriculture Issues: Disease outbreaks, like avian flu, and changing consumption patterns have disrupted livestock and poultry industries, further affecting Iowa’s economy.

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Ripple Effects Across Iowa and the Midwest

The impact isn’t confined to Iowa or farms alone. Businesses that support agriculture—such as equipment manufacturers, processing plants, and supply vendors—are also feeling the pain. Companies like Tyson Foods, John Deere, and others have announced over 4,000 layoffs this year alone. Factoring in indirect effects, job losses could exceed 11,000 statewide.

Counties like Dallas, Black Hawk, and Polk are seeing the worst impacts. For example, the closure of a Tyson plant in Dallas County has not only cost over 1,200 direct jobs but has also reduced local economic activity by nearly $260 million. Additionally, the bankruptcy and shuttering of Pure Prairie Poultry was another staggering blow.

This downturn highlights the need for swift action, including the passage of a new farm bill. Such legislation could provide financial certainty for farmers while also supporting conservation, innovation, and nutritional programs. Without it, Iowa’s agricultural backbone may face deeper struggles in the months and years ahead.

Agriculture has long been the lifeblood of Iowa’s economy, but this generational downturn shows how deeply intertwined farming is with the health of the entire state. As challenges mount, finding solutions will be critical to ensuring Iowa’s economy and communities can recover and thrive. Not only for farmers, but for citizens of our great state who rely on agriculture as their livelihood.