New Report Outlines Role of Agriculture in Iowa's Economy

January 22nd, 2003

AMES, Iowa — Iowa's farm, food and agriculture-affiliated industries account for 24.3 percent of the state's total industrial output. That's one of many statistics in a new Iowa State University report that details the role of agriculture in Iowa's economy.

The report was prepared by David Swenson and Liesl Eathington, both research scientists in ISU's economics department. "Agriculture and the industries that are linked to agriculture are important to the Iowa economy," Swenson said. "Though much of the economic growth in the state of late has accumulated to a distinct set of major trade and industrial centers, a substantial portion of Iowa is and will remain highly dependent on agriculture."

Using direct measures of the agricultural economy and its related industries, agriculture accounts for 10 percent of all Iowa jobs and 10.2 percent of the state's gross product. Using economic impact measures, which track inter-industrial relationships, the numbers are substantially higher.

For example, in 1999 production agriculture generated 6 percent of the state's industrial output. Food and kindred products manufacturing, which used about 35 percent of agricultural commodities produced in Iowa, generated 16.4 percent of economic output. All other agriculture-affiliated industries in Iowa, such as those that make machinery, fertilizers and chemicals, generated 2.1 percent of output. Combined, these three groups generated $40.1 billion, or 24.3 percent, of the state's total industrial output.

The size of Iowa's agricultural sector can be measured in several ways, including farm earnings, farm employment, agricultural sector gross cash income and the contribution by the agricultural sector to the gross state product. The report provides a glimpse at each of these categories. Some highlights include:
In 2000, total farm receipts in Iowa were just under $15 billion.

Gross State Product (GSP) measures the value added by labor and the use of property to commodities and services. Iowa's total GSP in 2000 was $89.6 billion. The agricultural sector contributed $3.68 billion to that total.

Iowa's farm, food and agriculture-affiliated industries account for 24.3 percent of the state's total industrial output. The worth of this productivity as measured by value added, mostly employee compensation and payments to owners and investors, is 16.4 percent of the value added economic impact in Iowa.

Osceola County is the most dependent on farm income of any county in the state. Polk County is the least dependent on farm income.

Among farm households in Iowa, 24.5 percent of household income is derived directly from farming. Nationally, farmer households average 10 percent of their income from farming.
The full report is on the Web at: http://www.econ.iastate.edu/research/webpapers/paper_10180.pdf

Contacts: 

David Swenson, Economics, (515) 294-7458
Liesl Eathington, Economics, (515) 294-2954
Susan Thompson, Communications Service, (515) 294-0705