Iowa Farm Bureau analysis finds downturn in ag economy claims up to 11,400 Iowa jobs and $1.5 billion in GDP this year

Ag and supporting industry layoffs result in $100M loss to state and local tax base

A sharp downturn in the agriculture economy is causing a ripple effect throughout the state resulting in the loss of up to 11,400 jobs and $1.5 billion in value-added economic activity (GDP) and a $100 million loss to the state and local tax base, according to an exclusive Iowa Farm Bureau Federation (IFBF) economic analysis.

Twenty-three businesses in Iowa announced layoffs for 4,097 individuals working in production agriculture and adjacent industries from the first of the year through Sept.18, 2024, but IFBF's analysis finds those numbers balloon when taking broader impacts into consideration.

"Ultimately, this starts with depressed incomes at the farm gate that have ripple effects on the Iowa economy," said Christopher Pudenz, Iowa Farm Bureau economics and research manager. "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."

Iowa's ag-related layoffs have occurred during a prolonged period of economic hardship and uncertainty for farmers. USDA's September 2024 farm income forecast projects another challenging year for farmers, who 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 that the downturn is particularly impactful in Iowa, considering 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.