Farm Bureau analysis shows $1.5 billion hit to Iowa economy as job losses reach up to 11,400, impacting cities and communities beyond the farm gate.

A sharp downturn in the agricultural economy is reverberating throughout Iowa’s cities and rural main streets, causing up to 11,400 job losses and a reduction of $1.5 billion in value-added economic activity, according to an exclusive Iowa Farm Bureau Federation (IFBF) economic analysis. 

The study quantifies the direct and indirect economic impacts resulting from layoffs this year by 23 Iowa businesses that are actively involved in, or support, production agriculture, including Tyson Foods, John Deere, Firestone and others. 

“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. 

“That means machinery manufacturers who are selling less new equipment have to lay people off, which means that the suppliers and vendors who provide parts to those manufacturers also slow down production and lay people off.” 

After reaching record highs in 2022, U.S. net farm income has tumbled nearly 25% during the past two years due to slumping commodity prices and stubbornly high input costs. 

The impact has been felt particularly hard in Iowa as net cash farm income from corn and soybeans plummeted to the lowest level in the last 15 years. A report from Farm Credit shows net cash farm income fell 38% for corn and 40% for soybeans in 2024 compared to a year earlier. 

Pictured above: Pudenz

Pudenz said that downturn is particularly impactful in Iowa, considering agriculture accounted for more than 22% of the state’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 is 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. 

Mounting layoffs

According to Iowa’s Worker Adjustment and Retraining Notification (WARN) database, which tracks plant closings and major layoffs, 23 agriculture or ag-adjacent businesses have announced layoffs of 4,097 individuals this year as of Sept. 18. The industries most impacted are animal slaughter and processing plants, farm machinery manufacturers and suppliers to farm machinery manufacturers. 

The layoffs are estimated to be directly responsible for reductions of $647.5 million in value added economic activity (equivalent to GDP) and $2.8 billion in total sales, according to the Farm Bureau analysis.

When indirect and induced impacts are considered, the total estimated statewide impact grows substantially and could account for up to 11,372 jobs lost with reductions of $828.3 million in labor income and $1.5 billion in value-added activity. 

The layoffs are also pinching government budgets, reducing state and local income tax and other tax collections by an estimated $100 million in the first year, the IFBF study found. 

The job losses and economic impact are continuing to mount as more layoffs are announced, including another round of job cuts at John Deere and the closing of a chicken processing plant in Charles City in October, Pudenz noted.

“The agricultural economy is cyclical, so farmers are used to prices moving up and down. But this seems to be more of a generational type of downturn. It has people asking the question is this as bad as the 1980s,” he said.

Local impact

The Farm Bureau study, performed by Decision Innovation Solutions using IMPLAN software, also estimated the county-level impacts for the three counties with the most agribusiness layoffs — Dallas, Black Hawk and Polk.

The most layoffs through Sept. 18 occurred in Dallas County, where Tyson Foods shuttered a pork processing plant in Perry. 

Layoffs totaling 1,276 individuals in the county are estimated to be directly responsible for reductions of $118.6 million in value-added economic activity. 

When additionally considering “indirect” and “induced” ripple effects, the study estimates that a total of 2,456 jobs could be lost in Dallas County. 

The total direct, indirect and induced impact of the Dallas County layoffs are estimated to reduce value-added economic activity by $259.9 million and lower state and local tax collections by $15.5 million.

Black Hawk County was next with 963 direct job losses, leading to reductions of $387 million in total value-added activity and $19.3 million in state and local taxes. Polk County saw 797 direct job losses, reducing total value-added activity by $272.7 million and state and local tax collections by $14.9 million. 

New farm bill needed

Iowa Farm Bureau President Brent Johnson, a Calhoun County farmer, said the economic study highlights the need for Congress to pass a new farm bill that enhances the safety net and provides long-term certainty for farmers.

“This analysis underscores why a farm bill is so important. Farmers need assurances as they try to balance economic uncertainty,” said 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.”