The Farm Crisis of the 1980s caused a major recession in Iowa, causing poverty not seen since the Depression. The crisis spurred a major, decade-long population decline.
Reemergence as a Mixed Economy, 1985–Present:
After bottoming out in the 1980s, Iowa’s economy began to become increasingly less dependent on agriculture, and by the early 21st century was characterized by a mix of manufacturing, biotechnology, finance and insurance services, and government services. The population of Iowa has increased at a faster rate than the U.S. as a whole, and Iowa now has a predominantly urban population.
Economy:
While Iowa is often viewed as a farming state, in reality agriculture is a small portion of a diversified economy, with manufacturing, biotechnology, finance and insurance services, and government services contributing substantially to Iowa’s economy. This economic diversity has helped Iowa weather the late 2000s recession better than most states, with unemployment substantially lower than the rest of the nation.
Manufacturing:
Manufacturing is the largest sector of Iowa’s economy, with $20.8 billion (21%) of Iowa’s 2003 gross state product. Major manufacturing sectors include food processing, heavy machinery, and agricultural chemicals. Sixteen percent of Iowa’s workforce is dedicated to manufacturing.
Food processing is the largest component of manufacturing. Besides processed food, industrial outputs include machinery, electric equipment, chemical products, publishing, and primary metals. Companies with direct or indirect processing facilities in Iowa include: ConAgra Foods, Wells Blue Bunny, Barilla, Heinz, Tone’s Spices, General Mills, and Quaker Oats. Meatpacker Tyson Foods has 11 locations, second only to its headquarter state Arkansas.
Major non-food manufacturing firms with production facilities in Iowa include 3M, ALCOA, Amana Corporation, Dexter Apache Holdings, Inc., Electrolux/Frigidaire, Emerson Process Management, Fisher Controls International, Hagie Manufacturing Company, HON Industries, SSAB, John Deere, Lennox Manufacturing, Maytag Corporation, Pella Corporation, Procter & Gamble, Rockwell Collins, Terex, Vermeer Company, and Winnebago Industries.
Agriculture:
Directly and indirectly, agriculture has been a major component of Iowa’s economy. As of 2007 the direct production and sale of raw agricultural products contributed only about 3.5% of Iowa’s gross state product. In 2002 the impact of the indirect role of agriculture in Iowa’s economy, including agriculture-affiliated business, was calculated at 16.4% in terms of value added and 24.3% in terms of total output. This was lower than the economic impact of non-farm manufacturing. Iowa’s main agricultural products are hogs, corn, soybeans, oats, cattle, eggs, and dairy products. Iowa is the nation’s largest producer of ethanol and corn and some years is the largest grower of soybeans. In 2008, the 92,600 farms in Iowa produced 19% of the nation’s corn, 17% of the soybeans, 30% of the hogs, and 14% of the eggs.
As of 2009 major Iowa agricultural product processors include Archer Daniels Midland, Ajinomoto, Cargill, Inc., Diamond V Mills, Garst Seed Company, Heartland Pork Enterprises, Hy-Vee, Monsanto Company, Pioneer Hi-Bred International, and Quaker Oats.
Other Sectors:
Iowa has a strong financial and insurance sector, with approximately 6,100 firms, including AEGON, Nationwide Group, Aviva USA, Farm Bureau Financial Services, Voya Financial, Marsh Affinity Group, MetLife, Principal Financial Group, Principal Capital Management, Wells Fargo, and University of Iowa Community Credit Union.