IOWA PROFILE

AGRICULTURE - IOWA'S BASIC INDUSTRY

For more information about Iowa agriculture, contact: Department of Agriculture and Land Stewardship, Wallace State Office Building, Des Moines 50319; 515/281-5321

Agriculture rebounded at a strong rate into the 1990s as farmland once again became a desirable investment, pushing land prices to a level that is two and a quarter times the low set during the farm crisis. Record meat production and record or near record production of corn and soybeans has resulted in plentiful supplies of food and fiber. U.S. agricultural products were in strong demand around the world until 1998, when the Asian market cooled and other countries became competitive in the world market. Net farm income reached record highs as commodity prices inched to new levels. Domestic and world demand kept carry over supplies drawn down to low levels. New production technologies were introduced for both crops and livestock during the 1990s and American farmers were quick to adopt them. Precision farming techniques such as genetic modification of crops for the protection against pests and adoption of swine production models are replacing conventional practices. This has enabled the American farmer to surpass domestic and world demands. As the century draws to a close, farm gate prices dipped to extreme lows as supplies exceeded demand, forcing agriculture into a period of difficult times following a decade of strong recovery during the late 1980s and early 1990s.

As Iowa agriculture enters the 21st century, Iowans increasingly understand the need to aggressively market agricultural commodities around the world. This has resulted in many farm products being converted into value-added goods while still in the farm sector. Research initiatives and shifts in consumer demand have resulted in the introduction of new products, enabling the producers to further diversify the state's production. Specialty crops have opened new markets as farmers produce special varieties of corn and soybeans with characteristics particularly useful in the food and pharmaceutical fields. Iowa producers market organically grown crops and medicated free livestock.

Driven by consumer demand for pesticide and fertilizer-free products, and an interest to apply creative and alternative solutions to low commodity prices, many Iowa producers have taken the lead nationally to implement organic practices. These innovative and dedicated producers are providing high quality organic agricultural products for local, national and international markets. As markets for organic products have expanded, certified organic acreage in Iowa has increased. By enacting the Organic Agricultural Products Act of 1998, the Iowa legislature recognized the need to protect both farmers and consumers of agricultural products labeled organic in the state of Iowa. The Act encourages and enables Iowans to produce agricultural products for the organic market by setting attainable standards and a system of verification-of-compliance with these standards through a state organic certification program. This program is administered through the Organic Agriculture Section within the Iowa Department of Agriculture and Land Stewardship.

Preserving Family Farms

Iowa is the heart of the nation with 33 million acres of land divided into 97,000 farming units. The number of farms has declined to a little less than half the number that were in the state a half century ago. The land used by agriculture has decreased by 1.5 million acres over the last five decades as this land was converted into recreational and conservation facilities, interstate highways or commercial and residential developments. About a quarter of a million of the 2.9 million Iowa residents are on farms, which is only a third of the number who resided on farms 50 years ago.

The number of individual farm operations declined sharply in the mid 1990s as consolidation and restructuring took place. Programs implemented by the state and federal governments in the mid to late 1980s provided support that many of the financially stressed operations needed to survive the farm crisis. One of the most popular was the Conservation Reserve Program (CRP) which began in the mid 1980s. As CRP contracts reached their fulfillment date, many owners of the land decided it was time to let someone else bring this land back into production.

Producers across the state are always looking for ways to lower costs per unit of production. The two most common ways to achieve this goal are by optimization of the farming units and use of precise cultural practices. This has lead producers to adopt minimum or no tillage and precision fertilization practices.

Protecting our Natural Resources

As we near the close of the millennium, we celebrate numerous conservation successes, but also recognize the considerable work yet to be done. Iowans can take pride in conservation milestones such as: 100,000 acres of conservation buffers, 100 miles of cold water stream protection, 50 years of conservation education, 50,000 acres of restored wetlands, 50 years of watershed protection, 100 years of soil survey, 50% of crops in conservation tillage, over 100 water quality projects, 100 years of building diversity in wildlife habitat, and $100 million in state cost-sharing for conservation.

Our vision for Iowa and agriculture includes farmers and their neighbors working together to understand shared needs for productive and profitable agriculture and a quality environment. Iowa's soil and water conservation districts are a focal point for sharing ideas, solving agricultural and environmental problems, and coordinating federal and state programs to assist farmers and communities.

Groundwater Protection

After World War II, many countries began extensive use of man-made chemicals, particularly in relationship to agriculture. It was a new field without much history to quantify the consequences of indiscriminate use of agricultural chemicals. In recent years, we have begun to recognize that there must be a great deal of responsibility accepted in the judicious use of chemicals due to their long-term effects on our environment.

Iowa state government began laying the groundwork for a conscientious, studied approach to this problem in the 1980s and developed the Groundwater Protection Act of 1987. It was determined that in the agricultural environment, more discrimination in the application of agricultural pesticides and fertilizers was needed. Therefore, the Groundwater Protection Act required more stringent training and testing of all pesticide applicators and licensing of all major pesticide retail outlets.

Today, the Groundwater Protection Act raises on average $3.5 million annually to fund research and education projects to limit the use of agricultural chemicals as well as research into the health effects of environmental contamination. More than $925,000 is collected from fees imposed on nitrogen-based fertilizers and more than $2,575,000 is collected from pesticide registrations. The Agriculture Management Account distributes funds to the Iowa Dept. of Public Health, the Iowa Dept. of Agriculture for demonstration projects regarding agriculture drainage wells and sinkholes, the Leopold Center for Sustainable Agriculture at ISU, the Iowa DNR for administering grants to counties and conducting oversight of county-based programs for the testing of private water supplies and closure of abandoned wells and, the Iowa Dept. of Agriculture for financial incentive programs related to agricultural drainage wells and sinkholes.

The production of farm commodities is big business in Iowa, generating sales of $12 billion annually. These commodities are exported to countries throughout the world. Iowa is second in the nation in exports of agricultural commodities. Iowa exports reduced the trade deficit by over $57 billion in 1997.

The Agricultural Marketing Bureau in the Iowa Department of Agriculture and Land Stewardship works to promote and add value to Iowa's commodities in addition to commodity price reporting. This is accomplished by covering the sale of livestock at 18 auctions with the Livestock Market News Program. Cash corn and soybean prices are gathered and reported by the Grain Market News Program which provides an overview of the cash grain prices reported by 47 elevators all over Iowa. In addition, the marketing bureau works to advance value-added agricultural enterprises through trade shows and the development of promotional activities and events.

Agricultural Diversification

Recognizing the need to rebuild and diversify Iowa's agricultural economy in the wake of the economic crisis of the 1980s, an Agricultural Diversification Bureau was established within the Department of Agriculture and Land Stewardship in 1987. Emphasizing the development of the state's horticultural industry, the bureau has helped expand the farmers market system in Iowa from 64 markets in 1986 to more than 123 markets in l998. The section has also developed public service announcements and product directories to assist producers of fruit, vegetables and Christmas trees to enhance sales.

The Farmers Market Nutrition Program is a federal-state partnership designed to provide a supplemental source of fresh fruits and vegetables for the diets of women, infants and children who are determined to be nutritionally at risk and to promote agricultural diversification by stimulating the demand for fresh fruits and vegetables at farmers markets. The program has grown from serving 1,700 eligible clients and 25 producers in 1987 to serving 49,316 needy Iowans at 88 farmers markets in 1998.

The Ag. Diversification Section also serves alternative crop and livestock producers by providing assistance on the marketing of products and management for new enterprises.

Food Safety

The people of the U.S. and world have become more and more dependent on fewer and fewer farmers for their food. Therefore, it is essential that quality products be provided in quantities sufficient to provide every man, women and child with a wholesome diet. Iowa's agricultural industries, producers and government are cooperating in efforts to assure the safety of our agricultural goods.

Cooperative state and federal programs jointly monitor and test both raw and processed food products. Dairy, meat and poultry products are subject to intense scrutiny at several levels from the farm to the grocery shelf. Organically produced crops and medication free livestock are produced under standards established by the Iowa Department of Agriculture and Land Stewardship to assure the consumer that they are purchasing wholesome products grown under strict guidelines. The monitoring of the health and well being of livestock built additional safeguards into the food production system during the production phase. An important component for sound healthy animals is high quality wholesome feed. The Iowa Department of Agriculture and Land Stewardship conducts an assurance program that measures the ingredients in feed mixtures.

Agricultural Financing

Rising interest rates and reduced credit availability created the need for a financial assistance program for beginning farmers in the late 1970s. An innovative financial assistance program was established in 1981, which later became a division of the Department of Agricultural and Land Stewardship. This division, the Iowa Agricultural Development Authority, assists new and existing farmers with low net worths in obtaining financing. Since it began, more than 2,600 low-interest loans totaling nearly $262 million have been closed.

The Loan Participation Program was established in 1996 to assist low income farmers with down payment funds. The authority reduces the lender's risk by providing a "last in, last out" loan participation with a lending institution. To date, 50 loans have been closed totaling $1.9 million.