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Northey: Agriculture sustains state’s economy

February 23, 2010
By Michael Tidemann - Staff Writer

While other states continue to be buffeted by the economic downturn, agriculture is helping to insulate Iowa from the ravages of high unemployment.

That was the message Iowa Ag Secretary Bill Northey had in his visit Monday to Estherville. Northey visited with the media and constituents at the Emmet County Farm Bureau building to hear their concerns and update everyone on agriculture throughout the state.

For years, now, hopes have been to bring more feeder cattle back to Iowa to take advantage of distillers grains, a co-product from ethanol production. And apparently that is happening. Northey said Iowa feeder cattle at 1.4 million head are up 5 percent from a year ago. That's at a time when feeder cattle numbers nationally are at a 60-year low.

Overall, gross agriculture sales for Iowa were $12 billion in 2002. That number increased to $20 billion in 2007. For both years, grains and livestock were an even split overall. In addition to being number-one in egg, corn, hog, soybean and ethanol production, Iowa has 39 ethanol plants throughout the state.

Northey also pointed to a new cadre of cattle feeders who are feeding ethanol co-products to livestock.

On the not-so-bright side, there are some challenges facing Iowa's livestock industry. They include over-regulation, labor cost and demands by some groups for stiffer regulation of animal care. "There's a nervousness. I don't know that there's a sense of impending doom," Northey said.

While hog prices were in the tank for two years, dairy does seem to be coming back. Cattle feeders also took a hit last year, with some losing $100 to $200 a head.

Northey pegged some of the causes behind falling meat prices as the economy in general as well as an oversupply of meats. Loss of markets to China and Japan due to unfounded fears over meat safety also hurt prices.

Northey does see an advantage for Iowa with former Iowa Gov. Tom Vilsack now serving as U.S. ag secretary. While Northey doesn't agree with all of Vilsack's positions, most notably on climate change issues, Northey said Vilsack is good for Iowa.

"He's a strong trade promoter. I think it's very good to have him there," Northey said.

While he prefers not to mandate ethanol in Iowa, Northey said if the state does promote a biodiesel mandate that he would prefer the state pay the cost. A $1-a-gallon federal tax incentive on biodiesel ended last Dec. 31. And, while the U.S. House approved continuing the credit which also has bi-partisan support of Iowa Republican Sen. Charles Grassley and Democratic Sen. Max Baucus of Montana, Sen. Harry Reid pulled the legislation from the Jobs Bill.

"It makes you nervous about the whole biofuels in general that this has happened," Northey said.

While some ag producers may be disheartened by the economic downturn, Northey wants farmers to remember the proud heritage that Iowa farmers have, one example of which is when 50 years ago several Iowa farmers sent three dozen hogs to Japan to help rebuild that nation's livestock program after typhoons devastated that island nation. Now, nearly all hogs in Japan are genetically related to those animals.

That very program gave rise to a multitude of international ag programs between the U.S. and other nations. Northey and Vilsack are traveling to Japan in April to commemorate the event.

Northey sees renewed opportunities for Iowa ag producers to help other nations develop their nations. Whether it's Haiti or Cuba in the Caribbean or some African nation, Iowa stands to be in a position to help them rebuild, Northey said.

"It's the right thing to do plus it opens up new markets," Northey said.



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