Leveraging Their Natural Resources--Farmland

One of the speakers at last week’s Missouri Governor’s “Survive and Thrive in 2005 Conference” was Rand Fisher, President of The Iowa Area Development Group. This organization was set up in the mid 80s by the 85 coop and municipal utilities in Iowa to encourage economic development. The mid 80s were when 38 community banks in the state closed, there was a farm auction on almost a daily basis and one Iowa mayor told people to “turn off the lights” when the last person left Iowa. I was working in Iowa at that time and I can tell you that it was bleak.

And, there are still challenges. The farming population is aging quickly, partially due to the current farm programs and the huge subsidies being given to existing farmers. “The average farmer in Iowa is 59; 70% work off of the farm for part time income; 48% of the land is owned by someone over the age of 65 and 24% is owned by someone over the age of 75,” according to Fisher. He went on, “At one time we were concerned with corporate and foreign land ownership, but today the biggest issue is that over 20% of the land in Iowa is owned by an heir who lives outside of the state.”

With ag being such an important asset in Iowa, “if we don’t use it as a plus in our rural development strategies, it is like a baseball team not using their best player.” Fisher related two examples (egg production and dairy) of successfully revitalizing agricultural businesses in the state as an example of what can happen when you “connect people and resources to grow businesses and communities in Iowa.”

Egg production was always an important product on most Iowa farms, with the state the number 1 egg producer in the country. It was considered the grocery money for a farm family. But the industry changed and Iowa didn’t. By 1980 Iowa wasn’t even in the top 10 states in egg production. But The Iowa Development Group and others started promoting Iowa as a location for egg production because it is much cheaper to ship eggs than feed. The average laying hen consumes 1 bushel of corn and ½ bushel of soybeans/year and Iowa produces lots of each. Today, Iowa is #1 again creating 2,640 jobs. The other key numbers: $61 million in payrolls; $750 million in industrial sales; $160 million in personal income; $225 million in value-added and $10 million in state taxes.

Iowa has had the same problem with the diary industry, resulting in fluid milk and cheese plants closings. The economic impact of one cow is $13,737. But big dairy herds are returning to Iowa, with 13 having been set up with over 1,000+ head each in the past 10 years. Other ag industries with huge potential in Iowa are: ethanol (15 new plants built in the past 5 years); renewable energy (wind power); and specialty crops. Iowa is learning to utilize their major resource, land, creating jobs in the process.