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Charting farm income

BY CHRIS HIGGINS | FEBRUARY 17, 2014 5:00 AM

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State officials are split on the findings of a federal report that predicts a plunge in farm income.

Data released by the U.S. Department of Agriculture this month project national farm income will drop for the third year in a row by 27 percent. The report points to reduced crop prices and government subsidies as the cause. However, it also noted Iowa farm income reached a record high in 2011.

Steve Swenka, the vice president of the Johnson County Farm Bureau, attributes the plunge to “a time of a little price correction.”

“We were seeing exceptionally high grain prices,” he said. “Everyone in the agricultural industry realizes they won’t stay that way forever … no doubt about it, that means less income for farmers.”

Cattle prices are reaching record highs, which is cause for optimism for some farmers, he noted. The report said national livestock income will increase by less than 1 percent.

State Treasurer Michael Fitzgerald listed the projected decrease as a top concern of his for the state economy at an event in Des Moines on Feb. 13.

Not all state politicians share his worry. Sen. Joe Bolkcom, D-Iowa City, addressed the issue at a University Club event on Sunday. 

“We’ve been through a very robust period in which modern prices were record for corn and soybeans,” he said. “We saw lots of tractors being purchased. It was kind of go-go on all things agriculture, and that’s cooled off some. I’m not overly worried about it.”

He said that a dip in farm income could come as part of a natural economic cycle and globalization.

“The state’s economy in general goes along fine for about 57 months, and then you have a little downturn, and it comes back,” he said. “It’s kind of the normal cycle of the economy and this might be a little bit of that. We’ve got other people around the world who have increased their ability to grow soybeans and corn, and some of it’s related to that.”

Sen. Tim Kapucian, R-Keystone, was not as unfazed by the report as Bolkcom.

“It’s not just the farm income,” he said. “It’s what it does for the community. Farm income supports a lot of jobs in Iowa. Whenever we see a drop in farm income, we should be concerned.”

As did Swenka, Kapucian noted the rise in livestock income, albeit with some wariness.

“Everybody raises crops, but not everybody raises livestock,” he said.

Kapucian also indicated something beyond the realm of government statistics to use in gauging the severity of the report.

“We can make all kinds of predictions we want, but in the end, Mother Nature controls it,” he said. “Mother Nature always has the final say.”


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