The crucial agricultural state of Iowa has endured yet another series of layoffs connected to the farm industry, while new key federal government statistics showed continued strength in the overall economy.
That will give economists, producers, investors, and operators plenty to think about in the days ahead.
Forgive the generalizations here but higher production costs, higher borrowing costs, and lower commodity returns have increased the pressure on various sectors of the agricultural economy.
John Deere has announced a series of layoffs over the past two months. The latest involved salaried workers.
KWQC-TV in Davenport talked with an economist who warned that Deere’s layoffs could cascade to other suppliers that may also need to make workforce reductions. See that story here.
KCRG-TV in Cedar Rapids talked with a farmer who explained how 25% expected income declines for farmers this year compared to last year are causing cuts in numerous ways. Watch that story here.
John Deere employed about 22,000 in Iowa and the Quad Cities (that’s the area of four major cities in the eastern Iowa/western Illinois region). The company has cut more than 1,800 positions recently, according to this report from the Des Moines Register.
But John Deere is only one of a handful of agricultural employers that decided to eliminate positions in the state. Firestone/Bridgestone, Smithfield, Tyson, and Salford Group have all announced cuts.
Add them up and nearly 4,000 people will lose their jobs. Is this a painful, yet temporary, period of layoffs with a rebound coming in a short period…next year?
Or will these signal a deeper, longer-term struggle like the agricultural economy endured during the second half of the previous decade?
Meanwhile, the economy grew faster nationally in the second quarter than analysists expected (2.8% annualized rate vs. 1.9% expected), stock markets bounced back after a one-day blip of earnings concerned, and unemployment has been creeping up.
What does it mean?
Fast Company asked if federal policymakers have defied the odds and slowly eased the economy’s raging expansion after the worst of the COVID-19 pandemic and could be achieving that “soft landing” that was fantasia to critics? Read that story here.
Axios pointed out how consumer spending and inventory investment have contributed to a strong second quarter. Find that report here.
The Washington Post examined how the latest federal numbers show an economy that is not too hot like it was more than a year ago but not as cool as it was earlier this year. Access that here.
Reuters assessed the overall numbers and found that with inflation continuing its decline, that makes a September rate cut still likely by the Fed. That would be welcome news to farmland owners and investors looking to buy or expand. Get that article here.
