Ames, Iowa – Researchers from Iowa State University, the North American Regional Science Council (NARSC), and West Virginia University have partnered to launch a new academic journal, Reaching Regions, hosted on Iowa State’s Digital Press.

John Winters, a professor of economics at Iowa State’s Center for Agricultural and Rural Development, recently completed a three-year term on the NARSC Executive Council and is a co-founding editor of Reaching Regions. He said that one of the goals of the journal is to make research more accessible to the general public. “Simply put, we want to do a better job of sharing research with the broader public. In economics and related social sciences, journal articles are the main research product, but most traditional academic journals have evolved in ways that discourage research dissemination rather than enhance it,” he said.

Winters said that academic journals typically limit access for non-subscribers and tend to use overly technical language that can alienate general audiences. “Our journal is freely accessible to anyone anywhere and will use non-technical language targeted to non-academic audiences,” he said. He also noted that the publication process for academic journals can be “painfully slow.” “We intend to review and distribute articles quickly to enhance the timeliness and usefulness of research,” he added.

Reaching Regions will publish peer-reviewed articles ranging from descriptive analyses, to non-technical summaries of published academic research, case studies with broader implications, research syntheses, data visualizations, and other items of interest to readers.

Winters said that Reaching Regions currently has no plans for a physical publication, but it is published under a Creative Commons license that permits readers to copy, adapt, and distribute materials with proper attribution. “If a reader finds a particular article useful, they are welcome to print and share with others. They can also share the article link and information via social media or email,” he said.

Heather Stephens, Director of the Regional Research Institute at West Virginia University, is a co-founding editor, and Kevin Kane of the Southern California Association of Governments, Amanda Weinstein of the Center on Rural Innovation, and Emily Wornell of the Center for Local and State Policy at Ball State University serve as co-editors.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
John Winters, Economics, 515-294-6263; winters1@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – Farm managers, rural appraisers, real estate brokers and others interested in the Iowa land market can receive timely updates at this year’s Soil Management and Land Valuation Conference May 15 in Ames.

Experts from across Iowa and the nation will examine current issues in rural property management, appraisal, the selling and buying of land as well as agricultural policy.

The annual conference – now in its 96th year – is the longest running at Iowa State University in research and extension.

This year’s conference will be held in person at the Scheman Building from 8:15 a.m. to 4:30 p.m.

Rabail Chandio, conference chairperson, will review the attendees’ land values forecasts to start the day, followed by a discussion on the U.S. and Global Ag Economy in relation to the land markets by Jason Henderson, Iowa State's vice president for extension and outreach.

Alejandro Plastina, associate professor and extension economist at Iowa State, will join Hingli Feng, an assistant professor of economics at Iowa State, and Ruth McCabe, an agronomist with Heartland Cooperative, for a panel discussion on conservation and easement programs and their influence on land values and soil quality.

Neil Hamilton, former director of the Drake Agricultural Law Center, will follow the panel with a presentation called “Soil Health and Water Quality Concerns: Implications for Land Values and Marketability.”

After lunch, Eric Snodgrass, the principal atmospheric scientist with Nutrien Ag Solutions, will present his weather outlook for the 2024 growing season; and Erin Hodgson, professor and extension entomologist at Iowa State, will discuss the implication of recent warm winters and climate change for soil health, yields and land valuation.

The final two sessions will include a look at the legal developments that affect land purchases and sales, with Kristine Tidgren, director of the Center for Agricultural Law and Taxation at Iowa State; and a look at how the crop and livestock market futures can influence farmland land markets, by Brian Grete, commodity analysis expert and editor of Pro Farmer.

Chandio, who is also an assistant professor and extension economist with ISU Extension and Outreach, said the conference continues to be an excellent educational venue for Iowans and beyond.

"The economic situation in agriculture and globally is not exactly clear right now,” said Chandio. “On top of that, the warm Iowa winters leave many to wonder about what to expect this year. With our agenda and the experts we have lined up, this is a great opportunity for attendees to gain a clearer understanding about several concerns, quite unique to this year, as we head into another crop season.”

Registration for the Soil Management and Land Valuation Conference is $150.

For more information, visit the conference website at https://www.regcytes.extension.iastate.edu/smlv/. Or reach out to Rabail Chandio at 515-294-6181 or rchandio@iastate.edu.

Contacts:
Rabail Chandio, 515-294-2536; rchandio@iastate.edu

Ames, IA – In 2022, wind power accounted for 62% of Iowa’s electricity net generation, according to the US Energy Information Administration. In fact, Iowa’s wind power industry has grown so much that only one state—Texas—produces more of its own electricity from wind.

However, despite Iowa’s growth in wind power, a new survey reveals most Iowans prefer that electricity suppliers invest in solar energy in their communities in the future.

“Solar energy can help diversify Iowa’s renewable energy portfolio. While Iowa leads the country in the share of wind electricity generation, solar energy currently contributes only a small fraction of the total electricity generation,” said Dr. Hongli Feng, an economist at Iowa State University’s Center for Agricultural and Rural Development.

Feng was responsible for the survey, which drew on responses from public officials and the general population to find what leads to local communities supporting, or not supporting, new utility-scale solar arrays. How local communities perceive the challenges and benefits of these projects is a key consideration, as the projects often rely on public support.

Feng said the survey shows Iowans support electricity suppliers investing in solar energy over fossil fuels (coal, natural gas, or oil), wind, nuclear, and "other" types of electricity generation—39% of respondents picked solar as their first choice, with an additional 37% and 15% choosing it as their second and third choice, respectively.

Overall, over 70% of respondents expressed either moderate, strong, or extremely strong support for their communities hosting a utility-scale solar project. “I am somewhat surprised by this finding, given not-uncommon headline news in recent times about moratoriums on solar energy projects,” Feng said.

Respondents, both public officials and the general population, say local benefits such as reduced electricity bills (72%), increased resilience during electricity-disrupting disasters (62%), and, reduced carbon and other air pollutant emissions (59%) are crucial in their attitudes toward adopting utility-scale solar projects within their communities.

While the survey didn’t ask why Iowans don’t support solar projects within their communities, it did ask them to rate the potential challenges associated with those projects. Key concerns included lack of favorable public opinions (37%), high initial investment costs (44%), and land use—mostly a loss of farmland (51%).

Iowans concerns about land use are specific to solar energy projects. “Non-renewable resource-based power plants, such as coal, require less land per unit of energy production and the land does not have to be in sunny flat spots.” Feng said. “Both (productive) agricultural land and land suitable for solar farms typically feature flat terrain, sufficient sun exposure, and few obstructions, which means solar competes with agriculture for land.”

The survey focused on utility-scale solar projects and did not consider agrivoltaics—using land for both solar energy and agricultural production. However, dual use projects could possibly garner more support.

“Given its potential to mitigate concerns about agricultural land use, agrivoltaics will likely enhance the acceptance of utility-scale solar projects among the public,” Feng said.

According to 39% of public officials, differing opinions on zoning is the primary challenge to adopting regulations for utility-scale solar projects. The survey results point to setbacks as one possible point of disagreement among community members. Only 24% of respondents agreed on the most popular answer—a 101–200 foot setback from a non-participating parcel to the solar array. The second-most popular response was a setback exceeding 300 feet, which only garnered support from 21% of respondents.

“We've heard from respondents who commented in the survey that clear setback regulations are crucial to safeguard private property rights, particularly for non-participating individuals,” Feng said. “Some respondents expressed worries about negative aesthetic impacts on neighbors, and simply personal dislike of utility-scale solar projects due to alterations to the current landscape in their communities.”

Despite the disagreements over zoning specifics, more than half (57%) of public officials expressed strong support for having a utility-scale solar zoning ordinance.

However, Feng noted, support for a zoning ordinance should not be interpreted as support for local solar projects in a community. “Public officials may desire clear zoning ordinances while simultaneously imposing strict regulations against utility-scale solar projects within their jurisdiction,” she said.

Lastly, a self-reported lack of knowledge about utility-scale solar projects could hinder development. Among respondents, 59% of public officials and 85% of the general population reported a low level of knowledge about utility-scale solar systems.

“Public officials are likely more knowledgeable about utility-scale solar projects and zoning regulations due to their closer involvement in the making and implementation of ordinances. They are also more likely to be aware of the needs and benefits of more clarity in regulations,” Feng said. “The general population may not be as informed also due to the limited presence of utility-scale solar projects in Iowa.”

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Hongli Feng, Economics, 515-294-6740; hfeng@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

The latest Iowa Farm and Rural Life Poll is now available

AMES, Iowa – Although they wear many hats, perform many jobs and are referred to using many terms, it turns out the people who grow Iowa’s crops and livestock prefer to be called “farmers.”

The 2023 Iowa Farm and Rural Life Poll was released this winter and asked those surveyed what they preferred to be called. Some 75% said they prefer to be called a “farmer.” The term “farm operator” was a distant second, at only 10%, followed by even less popular names like “producer, grower and rancher.”

While the name may not seem like that big of a deal, it’s actually an important part of communicating with “farmers.”

“I work with a lot of people who work with farmers, and I hear them use different terms like ‘grower’ and ‘producer’ to refer to farmers. So I decided to ask farmers what they prefer to be called,” said J. Arbuckle, rural sociologist with Iowa State University Extension and Outreach and lead author for the poll. “Turns out they prefer to be called farmers, by a long shot. That’s important to know because to communicate effectively with audiences, we need to use terms that resonate with them.”

Some of the issues this year’s poll examines include climate change, soil and water conservation, rented land, woodland ownership and management, and markets for non-GMO corn.

This year’s survey is based on responses from 972 farmers. Nearly all (90%) plant corn or soybeans, and about half (47%) raise livestock.

New this year is a series of questions related to woodland ownership and management.

“Many farms have at least some woodland area, so we wanted to gain a better understanding of how that is being managed and the types of resources landowners are using,” said Billy Beck, forestry specialist with ISU Extension and Outreach. “These results will help us improve how we work with farmers who have woodlands.

Also new – the poll examines markets for non-GMO corn, in response to countries that have banned the import of GMO corn. Nineteen percent of farmers reported they were interested in contracting to grow non-GMO corn for export, while 54% said they were not and 27% said they were unsure.

Arbuckle said the Farm Poll is a great way for farmers to make their voices heard, while helping to contribute to a better understanding of challenges and opportunities in Iowa agriculture.

“The benefit is that farmers can confidentially share their perspectives on issues that impact their livelihoods, and the results help guide policy and program decisions that keep agriculture vibrant into the future,” he said.

Detailed results from the poll will be examined in future news releases from ISU Extension and Outreach. The full report is available from your ISU Extension and Outreach county office, the ISU Extension Store, the Extension Sociology website or from the authors.

Contacts:
J. Gordon Arbuckle, Sociology, 515-294-1497; arbuckle@iastate.edu

Average land values in Iowa rose 3.7% nominally, 0.5% after adjusting for inflation

Ames, Iowa – Iowa’s farmland values rose again, albeit at a slower pace than the last two years. The annual Iowa State University Land Value Survey found that farmland values increased 3.7% or $424, to $11,835 per acre. The modest increase this year follows a 17% increase in 2022 and a near-record 29% increase in 2021. The nominal value of an acre of farmland is again higher this year than at any point since Iowa State University began surveying values in 1941. When adjusting for inflation, the 2023 average value surpasses 2022’s inflation-adjusted values by 0.5%.

Dr. Rabail Chandio, who is responsible for the annual survey, said many of the factors behind the large surge in values last year supported the increase this year as well. “Interest rates were lower through the first half of the year, commodity prices were still elevated, crop yields were a positive surprise despite the weather challenges throughout the growing season, cash and credit availability remained ample and allowed farmers to stay aggressive in the land market, and investor demand grew stronger nudged by inflation concerns and lack of alternative investment options,” she said.

The Federal Reserve has used interest rate hikes to help curb inflation rates that ballooned from mid-2021 through 2022; however, Chandio said that the pace of those hikes has been tempered. “The goal is to control inflation without triggering a recession, a strategy that has proven successful in 2023, and we hope to see maintained stability through 2024,” she said. She also noted that since the economy has not reached the 2% inflation target, she anticipates future interest rate increases.

Future rate increases will continue to slow the growth in farmland values, but not immediately. “It takes a couple of years for interest rates to be reflected in farmland values,” Chandio said. “The impact of the aggressive interest rate hikes of 2022 is expected to be felt more strongly in 2024 and beyond, resulting in much more modest growth or even decreases in land values in the coming years.”

Commodity prices were a commonly cited positive influence on this year’s farmland values. Chandio said they were elevated earlier in the year due to weather and geopolitical uncertainties, but they have decreased as of the end of the year. However, she said, “In terms of their influence on land values, they had a more positive impact on the land markets this year than a negative one.”

Chandio also noted farmers having ample cash reserves as an influence on land values this year. She attributed farmers’ recent accumulation of cash reserves to high net farm incomes. “Although the farm income forecast for December 2023 anticipates a decrease from 2022 levels, U.S. net farm income in 2023 remains over 30% higher than the 2020 level and the 20-year average (2003–2022),” she said. “The combination of debt-free ownership of most land, substantial farm incomes, and limited land supply means that farmers still maintain significant cash reserves.”

After three years of increases, Chandio says that we are currently at a plateau in farmland values. “While positive influences were more prominent at the beginning of the year, negative pressures are building as we approach 2024. Barring any unusual activity in the land markets, we may see the curve start to decline in the next year or so,” she said.

Chandio’s prediction tracks with the survey respondents’ near-term expectations—49% expect a decline in farmland values in one year, and only 30% expect an increase. Respondents were more optimistic about values five years out—a full 70% of respondents expect values to be up in five years.

Land Values by County
Eighty-seven of Iowa’s 99 counties showed an increase in land values. Sioux County topped the list this year with a per-acre value of $16,521, an increase of or $5 per acre, or 0.03%. Decatur County again reported the lowest value, $6,286 per acre; however, Decatur County saw land values increase 12.9%, or $720 per acre, which tied with Appanoose, Wayne, and Lucas Counties as the largest percent increase.

Marion County saw the largest dollar increase, $1,117 per acre. Scott County saw the largest dollar decline in values (a loss of $630/acre) as well as the largest percent decline in values (-3.9%).

Land Values by District
Land values increased in eight out of nine crop reporting districts. The Northwest district is the only district that reported an overall percentage loss (down 0.8%) and dollar loss (down $125 per acre) brining average land values there to $14,753. The Southeast district reported the largest gains both in terms of percentage increase (12.8%) and dollar increase ($1,183 per acre) bringing average values there to $10,460 per acre.

The South Central district reported the lowest dollar value, $7,482 per acre; however, per-acre values there are up 9.6% ($657 per acre).

Land Values by Quality
Statewide, low-quality land now averages $7,664 per acre, an increase of 4.0% or $296 per acre. Medium-quality land now averages $11,075 per acre, an increase of 3.8% or $401 per acre. High-quality land now averages $14,296 per acre, an increase of 3.5% or $479 per acre.

Despite an overall loss of value, the Northwest district reported the highest values for low-, medium-, and high-quality land at $9,497, $13,731, and $16,938 per acre, respectively. Despite the overall 9.6% increase, the South Central district reported the lowest values for low-, medium-, and high-quality land at $5,105, $7,498, and $9,718 per acre, respectively.

Low-quality land saw the largest percent increase 17.6%, and the largest dollar increase, $951 per acre, in the Southeast district. Low-quality land in the East Central district saw the largest percent decrease (-4.2%) and the largest dollar decrease (down $354 per acre).

Medium-quality land saw the largest percent increase (13.6%) and dollar increase ($1,181 per acre) in the Southeast district. The East Central district saw the only decrease in medium-quality land, which declined 0.1% or $14 per acre.

High-quality land saw the largest percentage increase (10.4%) and dollar increase ($1,329 per acre) in the Southeast district. The Northwest district reported the only decrease in high-quality land in terms of percentage (-1.1%) and dollar value (down $183 per acre).

Factors Influencing the Land Market
The most frequently mentioned positive factor influencing the land market was limited land supply. Stronger-than-expected yields and cash on hand/high credit availability were the second- and third-most frequently mentioned factors. Other frequently mentioned factors included higher commodity prices, strong demand for land, a good farm economy, and favorable interest rates.

The most frequently mentioned negative factor affecting land values was interest rate hikes. Other noted factors included lower commodity prices, higher input costs, weather uncertainty, stock market volatility, land availability, and an uncertain ag future.

Land values were determined by the 2023 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development at Iowa State and Iowa State University Extension and Outreach. Results from the survey are consistent with results by the Federal Reserve Bank of Chicago, the REALTORS® Land Institute, and the U.S. Department of Agriculture.

The Iowa State Land Value Survey is based on reports by agricultural professionals knowledgeable of land market conditions, such as appraisers, farm managers, agricultural lenders, and actual land sales, and is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The 2023 survey is based on 417 usable responses from 282 agricultural professionals. Forty-one percent of the 282 respondents answered the survey online.

The Iowa State Land Value Survey was initiated in 1941, the first in the nation, and is sponsored annually by Iowa State. The survey is typically conducted every November and the results are released mid-December. Only the state average and the district averages are based directly on the Iowa State survey data. County estimates are derived using a procedure that combines the Iowa State survey results with data from the U.S. Census of Agriculture.

CARD offers a web portal at https://www.card.iastate.edu/farmland/ that includes visualization tools, such as charts and interactive county maps, allowing users to examine land value trends over time at the county, district, and state level.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Rabail Chandio, 515-294-2536; rchandio@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – A news conference will be held at 10:00 a.m. on Tuesday, December 12 to announce the results of the 2023 Iowa Land Value Survey conducted by the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach. Please note the change in location from previous years—the conference will take place in room 0008 of Curtiss Hall on the Iowa State campus in Ames.

For those who can’t attend the conference, a livestream will be available on YouTube at http://bit.ly/LandResults2023.

Rabail Chandio, assistant professor of economics and farm management specialist, will head the news conference and announce the 2023 findings. Printed materials will be provided at the conference, including Iowa land value data from 1950 to present, current land value data from all 99 counties, and a press release summarizing the 2023 results. Dr. Chandio will make herself available to reporters for follow-up questions or one-on-one interviews immediately following the presentation of results.

The Iowa State Land Value Survey is currently ongoing, if you are an agricultural professional knowledgeable about the farmland market who has not participated in this year’s survey, you can participate in the Iowa State Land Value Survey online by November 30 at https://bit.ly/landvalue2023. If you have questions regarding the survey, please contact Dr. Rabail Chandio at rchandio@iastate.edu or call 515-294-6181. You can also see the land value trends at the county, district, and state level since 1950 at the interactive Iowa Farmland Value Portal at https://www.card.iastate.edu/farmland/.

An archive of the video and the printed materials available at the conference will be posted on the CARD homepage at https://www.card.iastate.edu soon after the conference.

Contacts:
Rabail Chandio, 515-294-6181; rchandio@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – One of the biggest keys to farm profitability is being efficient. Farmers are constantly looking for ways to improve yields while managing their inputs, and one of the ways they’ve done this for the past several years is by using precision agriculture.

Although this term can be defined many ways, the United States Department of Agriculture calls it a suite of technologies that can reduce input costs by providing the farm operator with detailed spatial information, that can be used to optimize field management practices.

In essence, it's producing more with less. But precision agriculture is a diverse field, and farmers approach it differently.

To better understand farmers’ use and opinions of precision agriculture, the 2022 Iowa Farm Poll asked questions about specific types of precision ag. The report, authored by extension sociologist J. Arbuckle, rural sociology graduate student Joe Hollis, and assistant professor of rural sociology Katie Dentzman, examines farmers’ use of precision agriculture, their views on potential benefits, as well as their concerns about potential downsides.

According to the poll, 66% of responding farmers said they use global positioning system yield monitors or maps, followed by 56% who use GPS guidance systems, such as autosteer, and 56% who said they use variable rate equipment such as sprayers and fertilizer equipment.

On the other hand, some technologies, like use of data from online decision tools, show less usage currently, but a strong likelihood of being adopted in the future. In 2021, 30% of farmers said they used this technology, while 21% said they plan to do so within the next three years and 25% said they are open to the technology in the future.

“We know that farmers have been using precision agriculture for some time, but what we have not always known is which types, to what extent and what the barriers to adoption may be,” said J. Arbuckle, rural sociologist with Iowa State University Extension and Outreach and lead author.

Trends among farmers

The survey of nearly 1,000 farmers measures the practices farmers are already using and the practices they intend to use in the future.

According to Arbuckle, adopting new technology is a process that starts with farmers knowing that it exists and then forming favorable opinions that lead to adoption.

“First, a farmer has to be aware of the technology, then consider the potential pros and cons of use, and then based on results of their research, form an intention to try it,” he said.

The survey results indicated that many of the farmers who were not using different precision agriculture technologies were open to use or actually intended to try them in the near future. Farmers were especially interested in adopting drones and on-farm sensor technology, as well as data from online decision tools.

According to the results, 18% of farmers plan to use drones within the next three years, while 29% are not planning to use drones but are open to using them down the road.

Benefits and barriers

The survey also asked farmers about potential benefits and downsides of precision technologies. While most farmers agreed or strongly agreed that precision agriculture could increase efficiency related to inputs, and nearly 80% agreed that the same technology could increase yields for individual crops, there is still a wide range of opinions about some aspects of precision technology.

More than half of farmers expressed concern over what their data might be used for, with 52% concerned their data could be used for regulatory purposes, and 41% concerned corporations would use the data for their own benefit, and not for farmers.

More than 70% were concerned that precision agriculture would lead to fewer and larger farms.

While concerns remain, co-author Dentzman said this information about farmers’ openness to precision agriculture can be useful for private and public sector entities that work to help farmers increase productivity while minimizing environmental impacts.

“Farmers see many benefits from precision agriculture, but they have important concerns as well,” said Dentzman. “This is useful information not only for farmers, but for those who are researching and developing the future of precision agriculture.”

About the poll

The Iowa Farm and Rural Life Poll survey is conducted by Iowa State University Extension Sociology, in partnership with Iowa State’s Center for Survey Statistics and Methodology. It is supported by ISU Extension and Outreach and the Iowa Agriculture and Home Economics Experiment Station.

Contacts:
J. Gordon Arbuckle, Sociology, 515-294-1497; arbuckle@iastate.edu

AMES, Iowa - A study of Iowa farmers’ use of 4R Plus nutrient management practices offers insights into social, economic, and ecological influences on adoption that operate at both an individual level and within a larger, county-level context.

The 4R approach to agricultural nutrient management aims to ensure use of the “right source” of nutrients at the “right rate,” the “right time” and in the “right place” for efficient use of fertilizers to avoid nutrient loss and maximize farm income. While 4R refers to in-field nutrient management practices, “Plus” refers to in-field conservation practices, such as no-till and cover crops, and edge-of-field conservation practices, including bioreactors or saturated buffers.

“There has been a lot of research looking at adoption of individual 4R Plus conservation practices. However, we think this is the first study that examines a full range of 4R Plus practices,” said J. Arbuckle, professor of sociology at Iowa State University and director of the annual Iowa Farm and Rural Life Poll.

Arbuckle was on the research team who reported findings from the project recently in the Journal of Soil and Water Conservation, with Suraj Upadhaya, now assistant professor of sustainable systems at Kentucky State University, who worked on the project as an Iowa State research scientist, and Lisa Schulte Moore, professor of natural resource ecology and management at Iowa State.

They conducted a multi-level analysis that reflected self-reported data from just over 6,000 farmers across the state from 2015-2019, representing a response rate of 42% out of about 14,000 contacts. Data were gathered on use of 14 different 4R Plus practices and other diverse factors, including information sources, attitudes, demographics and farm characteristics. The responses were analyzed along with county-level data from the same period that assessed several contextual factors which could impact farmer decision-making - average farm income, percent of farmland rented, slope of cropland and rate of participation in crop insurance.

Among the findings:
• 86% of farmers said they had used one or more 4R practice;
• 6% reported they had used three 4R practices (right source, rate and time); and
• Roughly 83% said they had used at least one in-field or edge-of-field “plus” practice.

Not surprisingly, farmers with more positive attitudes toward the Iowa Nutrient Reduction Strategy were more likely to have used many of the practices. The INRS is a strategy centered on voluntary adoption of diverse conservation practices to reduce nutrient losses contributing to water quality impairments across the Upper Midwest and hypoxic conditions in the Gulf of Mexico. Also, farmers with land adjacent to water bodies, such as creeks, streams, rivers or lakes, were more likely to have adopted Plus practices.

Other significant findings of the study:
• Lack of confidence in agronomic capacity to address nutrient losses was negatively associated with use of all the 4R Plus practices, except for the right source;
• Acres of cropland and pasture showed positive associations with use of 4R practices;
• County-level average crop insurance coverage level was negatively related to adoption of both in-field and edge-of-field Plus practices;
• Individuals farming in counties with a higher percentage of rented land were less likely to have adopted right time, right source and edge-of-field practices;
• Farmers in counties with a greater average slope were less likely to adopt nutrient management practices, but more likely to adopt the “plus” conservation practices.

“Many Iowa farmers indicate they still lack confidence in their capacity to reduce nutrient loss despite major efforts to promote nutrient management,” the study’s lead author Upadhaya said. “This points to a continuing need to help farmers gain confidence in their ability to follow 4R Plus stewardship guidelines, which could save them money and improve environmental outcomes.”

Crop insurance, purchased by most row crop farmers in intensively farmed areas in the United States, also may be an obstacle to farmers’ adoption of 4R Plus practices, according to the study.

“Crop insurance is a critically important safety net tool, but we need to make sure that short-term risk management policies do not undermine long-term goals for agricultural sustainability and food security,” Arbuckle said.

The study suggests that new programs, such as the Post-Application Coverage Endorsement (PACE), which reduces financial risks associated with in-season N application, could help mitigate current disincentives discouraging use of nutrient management and other conservation practices.

“This work is important to help us understand how best to tailor policy, research and education to encourage use of nutrient management practices,” said Matthew Helmers, director of the Iowa Nutrient Research Center, which helped fund the study. Other support came from the Nature Conservancy, Iowa State’s Consortium for Cultivating Human and Naturally reGenerating Enterprises (C-CHANGE) initiative, the Iowa Department of Agriculture and Land Stewardship and Iowa State University Extension and Outreach.

This study is unique, due to its innovative multi-level analysis that examined the influence of both individual-level characteristics and county-level contextual factors on adoption behaviors, according to Upadhaya.

“The results are complicated, though, due to the number of predictor variables and conservation practices,” he said. “The relationships between variables were not as consistent as we anticipated, indicating that factors influencing adoption vary among practice types. This area needs additional exploration.”

CALS News Service

Contacts:
J. Arbuckle, Sociology and Criminal Justice, 515-294-1497; arbuckle@iastate.edu
Ann Robinson, Agriculture and Life Sciences Communications, 515-294-3066; ayr@iastate.edu

AMES, Iowa — As the average age of Iowa’s farmland owners continues to rise, other trends in landownership have begun to emerge.
According to an Iowa State University study, 58% of Iowa’s farmland is now leased out, a significant increase from the last time the same study was conducted in 2017.

“There is a long-term trend toward farmland leasing since 1982,” said Wendong Zhang. Zhang is an assistant professor of economics at Cornell University and conducted the Iowa Farmland Ownership and Tenure Survey with Jingyi Tong, a PhD student in the Department of Economics at Iowa State. “The percentage of farmland being leased in Iowa increased from 53% in 2017 to 58% in 2022. This represents a relative increase of roughly one million acres over five years, which is quite significant,” Zhang said.

Conducted by Iowa State since the 1940s, the Iowa Farmland Ownership and Tenure Survey—completed every five years—focuses on forms of ownership, tenancy and transfer of farmland in Iowa, and characteristics of landowners. The latest survey was conducted in July 2022, and was funded by Iowa State’s College of Agriculture and Life Sciences, Iowa Nutrient Research Center, Leopold Center for Sustainable Agriculture, Department of Economics, Center for Agricultural and Rural Development and Iowa State University Extension and Outreach.

Farmland leases also increasingly favor cash rent over crop sharing and owner-operating arrangements. In 2017, 82% of leased farmland was cash rented, but cash rent, predominantly fixed-cash rental contracts, now account for 87% of leased land.

“The rise of cash rent, especially fixed cash rent, correlates with the growing percentage of landowners who are part-time and non-residents of Iowa,” said Wendong Zhang. “Fifty-five percent of land is owned by an owner who did not farm in 2022, and, of them, over half do not have farming experience. Especially for those landowners, a fixed cash rental contract is a natural choice,” Zhang said. According to the study, 47% of farmland was directly operated by the landowner in 2017, but that number has now fallen to just 42%.

The survey found that the average age of Iowa’s farmland owners is still increasing. In 1982, only 29% of Iowa farmland was owned by those over the age of 65. That percentage has steadily increased over the years, totaling 60% in 2017 and 66% today. Tong noted that women own 46% of Iowa’s farmland, and they hold a larger share among senior owners.

Tong indicated several factors are contributing to the increasing age of Iowa’s farmland owners, including the increase in using farmland as an inheritance or long-term investment, fewer young people going into farming, and those young farmers facing large start-up costs. “Also, some senior farmers may retain ownership of their land due to a lack of succession planning, thus keeping the farm even if they aren't actively farming. The survey shows 17% of landowners neither have a successor for ownership or management,” Tong said.

However, Tong noted that survey results show three of every four landowners in Iowa are interested in selling land to beginning farmers when incentivized with federal and state tax credits. “At the same time, over half of Iowa landowners expressed concerns about difficulty finding quality beginning farmers as well as beginning farmers’ ability to pay the best prices for land,” Tong said.

The recent survey also reveals changing trends in how ownership of Iowa’s farmland is held. In 1982, 80% of Iowa’s farmland was owned through a combination of sole ownership and joint tenancy; however, those now only account for 52% of Iowa farmland ownership. Meanwhile, the amount of farmland held in trusts has skyrocketed from 1% in 1982 to 23% today.

“Trusts have grown in popularity due to their numerous benefits. Particularly for farmland owners, trusts can ensure the preservation of the farm within the family, manage land transitions, and potentially provide tax benefits, making them a valuable tool in succession planning,” said Zhang.

The percentage of farmland owned debt-free has also continued to increase—84% of Iowa farmland is held without any debt, the highest level observed. This represents a steady and significant increase from 1982, a year that marked the onset of the farm debt crisis, when only 62% of the land was held without debt. Tong said that some of that recent increase is due to the hike in commodity profits, aging landowners coupled with longer lengths of ownership, and government payments during the COVID-19 pandemic.

Zhang said that the survey also found interesting trends in the use of conservation techniques on Iowa farmland. He noted that no-till farming saw a significant increase from 21% of owners and 27% of acres in 2017 to 29% and 30%, respectively, in 2022. “The use of cover crops also saw a slight increase over this period, from 5% of owners and 4% of acres in 2017 to 7% for both owners and acres in 2022,” he said. However, only 2% of Iowa landowners have already participated in a carbon credit program and another 3% are considering doing so, but, Zhang said, “most landowners are either not interested or have never heard of them.”

More information about the 2022 Iowa Farmland Ownership and Tenure Survey results can be found on the CARD website at https://www.card.iastate.edu/.

Contacts:
Wendong Zhang; wendongz@cornell.edu
Jingyi Tong, Department of Economics; jitong@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – J. Arbuckle, professor in sociology and criminal justice, and Matthew O’Neal, professor in plant pathology, entomology and microbiology, will serve a joint appointment as Henry A. Wallace Chairs for Sustainable Agriculture at Iowa State University, starting May 15, 2023.

The Wallace Chair provides leadership to develop and implement major educational and research programs on the sustainability of current and future agricultural practices.

“J. and Matt were selected because of their complementary visions to support and enable undergraduate education in this arena,” said Daniel J. Robison, holder of the endowed dean’s chair in the College of Agriculture and Life Sciences, on announcing their appointments. They are both committed to furthering experience and discovery in the many realms of sustainable agriculture and related sciences, technologies, policy and economics. Agricultural sustainability at all scales is a unifying and common thread across the college. Through these positions, Matt and J. will add further dimensions to that work.”

The Wallace Chair comes with special resources from an endowment supported by the W.K Kellogg Foundation and the Wallace Genetic Foundation, in collaboration from the College of Agriculture and Life Sciences and the ISU Foundation. The Iowa State chairs are part of a network of sustainability fellows around the country who hold Kellogg-sponsored positions.

J. Arbuckle has extensive research and extension efforts focused on improving the environmental and social performance of agricultural systems. He is director of the long-standing annual Iowa Farm and Rural Life Poll and is nationally recognized for work studying the drivers of farm stakeholder decision making related to soil and water quality and adaptation to climate change.

Arbuckle said one of his first priorities as Wallace Chair will be to conduct research to gain perspectives from key private and public stakeholders on what Iowa State is doing well in the realm of sustainable agriculture, how it can improve, and what related skills and knowledge respondents want future employees to have.

This will build on a recent project he helped lead to assess student interest in sustainability and their related experiences at Iowa State. That survey found strong, widespread interest in sustainability, along with perceptions that the university’s academic and extracurricular programs could better prepare them in this area.

“The results of the stakeholder engagement process will provide direction for new programs and to enhance the integration of sustainability concepts into what is already being offered here,” Arbuckle said. He is also interested in sharing ideas and experience with other Wallace Chair scholars around the country.

He came to Iowa State in 2007 from the University of Missouri, Columbia, where he earned a doctorate in rural sociology and a master’s degree in agricultural economics. He also has a bachelor’s degree in Spanish from Guilford College, Greensboro, North Carolina.

Matthew O’Neal came to Iowa State in 2004 and oversees research related to the management of insect pests of annual crops, with a focus on soybeans. He also teaches courses in entomology and sustainable agriculture. His overall goal has been to help develop pest management programs that are economically and environmentally sustainable.

O’Neal has a doctorate in entomology from Michigan State University, East Lansing, and a master’s degree in entomology and bachelor’s degree in Biology, both from the University of Illinois, Urbana-Champaign.

“The Wallace Chair role will give us the opportunity to provide leadership to create a new undergraduate program in sustainability and food systems that can provide expanded options for our students in terms of career readiness and research,” O’Neal said. “Iowa State was the first university to create a graduate program in sustainable agriculture. That program has a strong reputation and provides a foundation for an undergraduate degree program.”

O’Neal plans to continue his research and teaching and his involvement in pollinator conservation projects as Wallace Chair. He is especially excited about a new research effort he’s helping lead to explore the emerging field of agrivoltaics—combining agricultural enterprises with solar energy—through a public-private partnership with Alliant Energy and funding from the U.S. Department of Energy.

“One thing I have to say about this new appointment is that I didn’t get here by myself,” O’Neal said. “All along the way, the projects I’ve been part of that have been the most impactful have been as part of teams. I know J. feels similarly. Together we have worked with a broad community of faculty and staff, students and outside organizations that have supported and influenced our work. I expect these relationships to be even more important as Wallace Chairs.”

Arbuckle and O’Neal both said they already have positive experience working together on interdisciplinary and multi-institutional projects—including the prairie STRIPS program and as faculty leaders for the Graduate Program for Sustainable Agriculture—and they look forward to opportunities to collaborate more closely.

The Henry A. Wallace Endowed Chair for Sustainable Agriculture was established to promote the philosophical and practical ideas of Iowan Henry A. Wallace, former U.S. secretary of agriculture, and commerce, U.S. vice president, co-founder of Pioneer Hi-Bred, communicator, scientist and farmer. The chair honors Wallace's commitment to the wise use of science and public policy to protect natural resources and farmland, enhance vibrant and enduring rural communities and alleviate global poverty and hunger. Former Wallace Chairs at Iowa State have been Matt Liebman (2007–2022) and Lorna Michael Butler (2000–2007).

The new Wallace Chairs were selected by an interdepartmental search committee led by CALS Dean Daniel Robison, with Stephen Dinsmore, interim director of the Leopold Center for Sustainable Agriculture, Matt Helmers, director of the Iowa Nutrient Research Center, Ajay Nair, program director for the Graduate Program in Sustainable Agriculture, and Asheesh (Danny) Singh, professor, agronomy.

Iowa State University College of Agriculture and Life Sciences

Contacts:
Daniel J. Robison, College of Agriculture and Life Sciences Administration, 515-294-3830; robisond@iastate.edu
Ruth MacDonald, College of Agriculture and Life Sciences Administration, 515-294-5991; ruthmacd@iastate.edu
Andy Zehr, Agriculture and Life Sciences Communications, 515-294-9123; azehr@iastate.edu

AMES, Iowa — Lee Schulz is the recipient of the 2023 Dean Lee R. Kolmer Award for Excellence in Applied Research from the College of Agriculture and Life Sciences at Iowa State University.

Schulz is an extension livestock economist and an associate professor of economics. His work encompasses farm management extension, focusing on the beef and pork industries. He has conducted extensive research on livestock production, marketing and risk management.

Schulz’s economics research during the COVID-19 pandemic was critical to producers and consumers when livestock processing plants shut down. He developed models to track production trends and financial losses, and he maintained a constant media presence to share this information with market participants.

He has also collaborated with other researchers to assess economic damages created by the trade war between the United States and China. Schulz and his colleagues estimated crop and livestock revenue losses and correlated them with lost labor income and tax revenue. These estimates were used to help guide federal assistance payments for producers affected by the trade tariffs.

“In both cases, Dr. Schulz was proactive in summarizing the economic situations, pulling together the appropriate modeling and research tools to analyze the issues, and connecting with state and industry leaders to address and respond to the challenges faced,” said Chad Hart, professor of economics and extension crop markets specialist.

In addition, Schulz has developed decision making tools and fact sheets for cattle and swine producers, studied risk management strategies for beginning farmers, and investigated the impacts of foreign animal disease outbreaks on livestock markets. He has also taught several economics courses at Iowa State and serves as the co-advisor for the Agricultural Marketing and Management Organization student club.

Schulz received a bachelor’s degree in agricultural business from the University of Wisconsin–River Falls and a master’s in agricultural economics from Michigan State University. He then earned a doctorate in economics at Kansas State University in 2012 before he began working at Iowa State later that year.

The Kolmer Award is named after Lee R. Kolmer, who served as dean of the College of Agriculture and Life Sciences for 14 years beginning in 1972. Kolmer and his wife, Jean, established the award to honor faculty and staff who have made significant contributions to improving the welfare of Iowans through applied research.

Contacts:
Lee Schulz, Economics, 515-294-3356; lschulz@iastate.edu
Chad Hart, Economics, 515-294-9911; chart@iastate.edu
Amber Friedrichsen, Agriculture and Life Sciences Communications; amberf@iastate.edu
Whitney Baxter, Agriculture and Life Sciences Communications; wjsager@iastate.edu

AMES, Iowa – In Iowa, more than 24 million acres are devoted to crops. That represents about 68% of the state’s land area -- and more than 94% of that land is used to produce corn and soybeans, according to the latest National Agriculture Statistics Survey (2021).

“Iowa’s agriculture is highly specialized, with almost all of its cropland planted to corn and soybeans,” said J. G. Arbuckle, professor of sociology at Iowa State University, director of the annual Iowa Farm and Rural Life Poll. “However, few farmers think agricultural specialization has generally been positive for farmers and rural communities.”

Arbuckle is one of the investigators on a new, multistate project seeking to address that trend. The $10 million, five-year USDA-funded Diverse Corn Belt (DCB) Project launched in 2022 to explore the potential to increase diversification of crops and livestock on farms in the Midwest.

Overall, the team includes more than 30 investigators who are working with farmers and other agricultural stakeholders in Iowa, Indiana and Illinois to envision and evaluate more diverse agricultural systems for the Midwest. They aim to chart roadmaps that can help the region reverse trends that have been building for decades.

“Our goal is to plant the seeds for new opportunities for farmers that will enhance resilience of both individual farms and the agricultural landscape across our region,” said Linda Stalker Prokopy, DCB Project director, a professor and chair of the Department of Horticulture and Landscape Architecture at Purdue University.

Focus groups

Focus groups have already been held to gather insight and ideas from farmers representing a range of ages, farm sizes and degrees of diversification. Members of the team are analyzing the initial data and plan to conduct more focus groups in 2023. The team also plan to collect data on farmer and agricultural stakeholder perspectives through a mail survey and individual interviews.

Reimagining Agricultural Diversity Teams will be a unique feature of the project. While focus groups will center specifically on farmers, RAD Teams will include stakeholders throughout the agricultural value chain, such as crop advisers, bankers, processors, retailers, non-farming landowners and policymakers. The RAD Teams will offer a chance for longer-term dialogue, exploration and visioning.

Modeling

“As ideas develop, we will also use modeling to evaluate the economic, environmental and climatic implications of different crops and livestock choices, landowner decisions and policy changes,” said Philip Gassman, a researcher with the Center for Agricultural and Rural Development at Iowa State, who is part of the DCB’s modeling group.

The modelers will focus on one watershed in each of the three states to help assess scenarios the RAD Teams choose to explore in detail, he said. For Iowa, the watershed will be the upper portion of the Des Moines River Basin, where the project can leverage modeling being conducted by the Iowa State-led Urban Food-Energy-Water Systems project.

“Corn and soybeans became the dominant cropping system over a century,” Gassman said. “To make headway, it will take work from a lot of angles to develop -- or in some cases, redevelop -- markets and infrastructure.”

Infrastructure development

Developing that infrastructure is part of the focus for another Iowa DCB partner, Practical Farmers of Iowa. PFI’s role includes extension-type support for outreach and field days. They are also providing leadership to help develop market channels for alternative farming enterprises, which could create the pull for other project components, according to PFI Field Crops Viability Manager Lydia English, who has a master’s in sustainable agriculture from Iowa State.

“There is strong interest in creating alternative markets among the very diverse group of farmers we work with,” she said. “We view this as a two-way street: Farmers add value to the project, and the project has potential to benefit them over time by opening up new market options.”

The DCB Project is funded by the USDA National Institute of Food and Agriculture through an Agriculture and Food Research Initiative competitive grant. Members of the research team represent land grant institutions, federal agencies and nonprofit organizations.

“If Midwestern agriculture is going to thrive over the long term, it needs to be resilient to unexpected challenges from pests and diseases, harsh weather, uncertain input costs, and market volatility,” said Matthew Liebmann, Iowa State emeritus professor of agronomy, who helped craft the plan for the DCB Project and continues to serve as an advisor.

“Diversity can be an effective way to protect crop yields, livestock production and farm profitability, while also improving environmental quality. Researchers, farmers and other members of the agricultural community working together can identify the best paths toward diverse, durable farming systems,” he said.

Farmers or other stakeholders who are interested in learning more or getting involved can find out more at the Diverse Corn Belt website.

Iowa State University College of Agriculture and Life Sciences

Contacts:
J. Arbuckle, Department of Sociology and Criminal Justice, 515-294-1497; arbuckle@iastate.edu
Philip Gassman, Center for Agricultural and Rural Development, 515-294-6313; pwgassma@iastate.edu
Ann Y. Robinson, Agriculture and Life Sciences Communications, 515-294-3066; ayr@iastate.edu

Ames, Iowa – One year after skyrocketing 29%, the average value of an acre of Iowa farmland jumped another 17%, or $1,660, to $11,411 per acre. The nominal value of an acre of farmland is again higher this year than at any point since Iowa State University began surveying values in 1941. When adjusting for inflation, the 2022 average value surpasses the previous inflation-adjusted record value set in 2013 for the first time.

Farmland values in Iowa have increased more than 15% in a year a handful of times since 1941, most notably in 2011, when values rose 32.5%, and last year, when values rose 29%.

While inflation was a major factor that drove the increase last year, Wendong Zhang, an associate professor of economics and faculty affiliate of Center for Agricultural and Rural Development (CARD) at Iowa State University, said that it did not play as much of a factor as commodity prices, limited land supply, and low interest rates through summer 2022 did this year.

Zhang, who is responsible for conducting the annual survey, said that inflation rates this year are similar to those from last year, but the Federal Reserve has used aggressive rate hikes since this summer to curb the problem. “The Federal Reserve seems to be determined to keep raising interest rates until they get a firm control on inflation. This is a tricky balance because larger and quicker interest rate hikes run the risk of slowing down the economy, potentially to a recession,” Zhang said. While he noted that higher interest rates put downward pressure on the land market, the effects typically don’t show up in land prices for one or two years.

While the Federal Reserve has been raising interest rates, Zhang said that 81% of Iowa farmland is fully paid for, so the higher interest rates don’t always affect farmers’ land purchasing decisions. This is especially true when high inflation makes the real interest rates negative or low, which tends to incentivize more borrowing and investment. Furthermore, a significant portion of respondents said that cash on hand was a positive factor influencing land values. “Farmers have a lot more cash on hand and supply chain issues led to a shortage of equipment, so the money that farmers normally spend on equipment is now devoted to land,” he said.

As for commodity prices, Zhang said they have been strong this year and yields have been higher than expected, despite the weather challenges. “Not only are crop prices are much higher, livestock and poultry prices are also significantly higher, translating into higher farm income and profits,” he said.

For the first time, this year’s survey asked respondents’ views of current farmland values. Zhang said that 70% of respondents feel that current land values are “too high” or “way too high.” “The higher land values do create an even higher entry barrier for beginning farmers, and the following increase in cash rents along with higher input costs could negatively affect producers, especially those with a lot of rented ground” he said.
Zhang said that 48% of respondents forecasted an increase in farmland values one year from now, while 24% forecasted no change and 28% expected lower values. He said that most respondents expect the one-year value to either be the same or increase roughly 5%–10%.
Looking five years ahead, Zhang said that 60% of respondents believe land values will increase 10%–20% from current values, while about 24% forecast a decline in prices.

Land Values by County
For the second year in a row, all 99 of Iowa’s counties showed an increase in land values. However, for the first time in almost a decade, Scott County did not report the highest overall value. O’Brien County topped the list this year, reporting a 20.6% increase, or $2,818 per acre, to $16,531. Decatur County again reported the lowest value, though land values there increased 10%, or $505 per acre, to $5,566.

Mills, Fremont, Page, and Montgomery Counties reported the largest percentage increase, 21.6%, while O’Brien County saw the largest dollar increase, $2,818 per acre. Wayne, Lucas, Appanoose, and Decatur Counties saw the smallest percentage increase, 10%, while Decatur County saw the smallest dollar increase, $505 per acre.

Land Values by District
Land values increased across all crop reporting districts. The Northwest district reported the highest overall value, $14,878 per acre, the largest percentage increase, 22.3%, and the largest dollar increase, $2,714 per acre.

The South Central district reported the lowest values, $6,824 per acre, and the lowest dollar change, $790 per acre, while the Southeast district saw the smallest percentage increase, 9.8%.

Land Values by Quality
Statewide, low-quality land now averages $7,369 per acre, an increase of 15.2% or $972 per acre. Medium-quality land now averages $10,673 per acre, an increase of 17.7% or $1,602 per acre. High-quality land now averages $13,817 per acre, an increase of 16.8% or $1,983 per acre.

The Northwest district reported the highest values for low-, medium-, and high-quality land at $9,569, $13,710, and $17,121 per acre, respectively. The South Central district reported the lowest values for low-, medium-, and high-quality land at $4,379, $6,872, and $9,478 per acre, respectively.

Low-quality land saw the largest percent increase in the Northeast district, 19.8%, while the Northwest district saw the largest dollar increase, $1,481 per acre. Low-quality land saw the smallest percent increase, 7.9%, and the lowest dollar increase, $321 per acre, in the South Central district.

Medium-quality land saw increases of more than 20% in the West Central, Northeast, Southwest, and Northwest districts, which respectively showed increases of 20.1%, 21.9%, 22.7%, and 24.2%. The Northwest district also saw the largest dollar increase in medium-quality land, $2,688 per acre. The Southeast district showed the lowest percent increase in medium-quality land, 6.2%, and the lowest dollar increase, $508 per acre.

High-quality land in the West Central, Southwest, and Northwest districts all saw increases of more than 20%—20.6%, 21.2%, and 22.3%, respectively. The Northwest district reported the largest dollar increase in high-quality land at $3,124 per acre. The Southeast district reported the smallest percent change in high-quality land, 10.3%, and the smallest dollar increase, $1,201 per acre.

Factors Influencing the Land Market
The most frequently mentioned positive factor influencing the land market was higher commodity prices. Limited land supply and low interest rates through summer 2022 were the second- and third-most frequently mentioned factors. Other frequently mentioned factors included cash on hand and high credit availability, strong yields, a good farm economy, and strong demand.

The most frequently mentioned negative factor affecting land values was interest rate hikes. Other noted factors included concerns about higher input costs and stock market volatility and economic uncertainty were the second- and third-most frequently mentioned negative factors.

Land values were determined by the 2022 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development at Iowa State and Iowa State University Extension and Outreach. Results from the survey are consistent with results by the Federal Reserve Bank of Chicago, the REALTORS® Land Institute, and the U.S. Department of Agriculture.

The Iowa State Land Value Survey is based on reports by agricultural professionals knowledgeable of land market conditions, such as appraisers, farm managers, agricultural lenders, and actual land sales, and is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The 2022 survey is based on 668 usable responses from 443 agricultural professionals. Seventy-one percent of the 443 respondents answered the survey online.

The Iowa State Land Value Survey was initiated in 1941, the first in the nation, and is sponsored annually by Iowa State. The survey is typically conducted every November and the results are released mid-December. Only the state average and the district averages are based directly on the Iowa State survey data. County estimates are derived using a procedure that combines the Iowa State survey results with data from the U.S. Census of Agriculture.

CARD offers a web portal at https://www.card.iastate.edu/farmland/ that includes visualization tools, such as charts and interactive county maps, allowing users to examine land value trends over time at the county, district, and state level.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu; wendongz@cornell.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – A news conference will be held at 10:00 a.m. on Tuesday, December 13 to announce the results of the 2022 Iowa Land Value Survey conducted by the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach. Please note the change in location from previous years—the conference will take place in room 142 of Curtiss Hall on the ISU campus in Ames.

For those who can’t attend the conference, a livestream will be available on YouTube at http://bit.ly/LandResults2022.

Wendong Zhang, associate professor of economics and farm management specialist, will head the news conference and announce the 2022 findings. Printed materials will be provided at the conference, including Iowa land value data from 1950 to present, current land value data from all 99 counties, and a press release summarizing the 2022 results. Dr. Zhang will make himself available to reporters for follow-up questions or one-on-one interviews immediately following the presentation of results.

The Iowa State Land Value Survey is currently ongoing, if you are an agricultural professional knowledgeable about the farmland market who has not participated in this year’s survey, you can participate in the Iowa State Land Value Survey online by December 1 at https://tinyurl.com/landvalue2022. If you have questions regarding the survey please contact Dr. Wendong Zhang at wdzhang@iastate.edu or call 515-294-2536. You can also see the land value trends at the county, district, and state level since 1950 at the interactive Iowa Farmland Value Portal at https://www.card.iastate.edu/farmland/.

An archive of the video and the printed materials available at the conference will be posted on the CARD homepage at https://www.card.iastate.edu soon after the conference.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa — If Russia's invasion and the ensuing war significantly reduce Ukrainian grain exports, surging prices could increase food insecurity and carbon dioxide emissions, as marginal land is pushed into crop production.

That's the chain reaction predicted by modeling from a research team that includes Amani Elobeid, a teaching professor of economics at Iowa State University. An article about their projections was published recently in Nature Food, an academic journal.

Elobeid said she and her colleagues — Jerome Dumortier of Indiana University-Purdue University Indianapolis and Miguel Carriquiry of the University of the Republic in Uruguay — ran their models shortly after the start of the invasion in February in hopes of estimating the impact on global grain markets and the subsequent climate implications.

"We're trying to present a more complete picture of what this war is costing the world," she said.

Ukraine, sometimes called the "bread basket of Europe," is a major exporter of wheat and corn. A deal struck with Russia in July aims to allow Ukrainian grain shipments, but it's unclear how effective it will be at limiting the war's impact on exports. For the study, researchers examined four potential outcomes: a 50% drop in Ukrainian exports and three scenarios assuming no Ukrainian exports in combination with other related situations or responses, such as a reduction in biofuel production in the U.S. and Europe or a 50% drop in Russian grain exports.

Their models estimate how changes in global agricultural markets impact production, trade, food consumption and prices — which in turn affect what land is used for crops. When the price of corn goes up due to a shortage, for instance, dense Brazilian forests are likelier to be razed for farming because there's an incentive to expand production.

Depending on the scenario, the cost of wheat would rise up to 7.2%, while the price hike for corn could reach 4.6%. Elobeid said those spikes would be on top of already rising food costs and would disproportionally worsen hunger in poorer countries in Africa and the Middle East, regions which rely heavily on grain imports from Ukraine.

"In the U.S., an additional 5% increase in food prices might not be that alarming. But in countries that are extremely poor and have high levels of food insecurity, even a 1% increase is very significant," she said.

Globally, the amount of new land used for growing crops under the scenarios studied would range from 16.3 million to 45 million acres, causing an average estimated increase in carbon emissions between 527 million and 1.6 billion metric tons of carbon dioxide equivalent, according to the study.

In wealthier countries, increased subsidies for lower-income households would help counteract higher food prices, but that's not an option in poorer nations, Elobeid said. Removing trade restrictions and implementing policies such as temporarily reducing biofuel mandates would help reduce grain prices worldwide and limit land-use changes that drive up carbon emissions. The most effective policy response, however, is clear yet elusive.

"The obvious solution is for the conflict to end," she said.

Iowa State University News Service

Contacts:
Amani Elobeid, 515-294-8122; amani@iastate.edu
Dave Roepke, ISU News Service, 515-294-4548; dcroepke@iastate.edu

AMES, Iowa — Keeping plants continuously growing on farmland through the winter protects and enriches soil, improves water quality and reduces greenhouse gas emissions. That's why Lisa Schulte Moore, a professor of natural resource ecology and management at Iowa State University, is working to make year-round covered ground a conventional practice.
"My vision is that when we drive around Iowa in December, we don't see a single bare field," she said.

While use of cover crops is growing, it's far from common. A new grant of up to $80 million from the U.S. Department of Agriculture will fund a project meant to spur more farmers to plant cover crops and perennial prairie grass, through both direct payments and a demonstration of how harvested winter-hearty crops and grass can be processed into renewable natural gas.

"This is about creating economic incentives so farmers' hearts and minds can align. They want to keep their soil. They want to keep their nutrients in place. We know they value environmental quality. But it needs to make financial sense for them," said Schulte Moore, co-director of Iowa State's Bioeconomy Institute and a 2021 McArthur Fellow.

The five-year grant is among the $2.8 billion in federal investments in 70 projects announced this month as part of the USDA's Partnerships for Climate-Smart Commodities program. The grant builds on the work of the Consortium for Cultivating Human and Naturally reGenerative Enterprises (C-CHANGE), founded in 2018 as an ISU Presidential Interdisciplinary Research Initiative. The initiative expanded in 2020 to a multi-institutional project led by Schulte Moore with a five-year, $10 million grant grant from the USDA's National Institute for Food and Agriculture.

Several CARD faculty members, including John Crespi, Dermot Hayes, Amani Elobeid, Alejandro Plastina, Wendong Zhang, and CARD Faculty Collaborator Jerome Dumortier will serve as principal investigators on the project.

Iowa State will receive roughly $10 million from the new grant and is one of 14 partners involved in the project, which is called Horizon II and is led by Roeslein Alternative Energy, a St. Louis-based company that is also an industry partner on C-CHANGE.

"Since founding RAE, our overarching goal has been to provide farmers an alternative way to use land, especially highly erodible acres, in ways that will benefit the environment, wildlife and their own livelihood," said founder and CEO Rudi Roeslein. "This funding will propel Horizon II forward more rapidly than otherwise would have been possible. We will show how farmers and landowners can do well for themselves while also providing ecological services and wildlife benefits."

A little more than half of the grant will be devoted to creating a new market for prairie grasses and winter-hearty crops such as cereal rye, paying for the associated environmental benefits of planting them. RAU will develop a market to pay corn and soybean producers in Iowa and Missouri to plant winter-hearty plants on productive cropland and restore less-productive areas to prairie, Schulte Moore said. That could begin by fall 2024, she said.

The project also includes two pilot sites where harvested grasses and cover crops will be used as the feedstock for anaerobic digesters, which produce methane as microbes break down organic matter. One of the sites will be at Sievers Family Farms, a cattle operation about 20 miles northwest of Davenport. The other is at a Smithfield Foods farm in northern Missouri.

The Sievers' facility has converted a mix of manure and bedding into biogas for nearly a decade, and in December 2021 entered a partnership with RAE. Now an additional anaerobic digester is being built, the farm's third, to enable further breakdown of the organic matter from grassy crops. The material will be converted into renewable natural gas -- a high-quality fuel that can be sold to energy suppliers and is indistinguishable from the natural gas that powers furnaces, stoves and vehicles, Schulte Moore said. Digestate, the material remaining after the gas is produced, can be used or sold as a nutrient-rich fertilizer and carbon-rich soil amendment.

The pilot sites hope to show that an on-farm anerobic digester running on biomass from nearby operations could create a self-sufficient market for grass and cover crops, attaching a stable income stream to an environmentally sound choice available to producers of all sizes. RAE estimates that a nationwide network of anaerobic digesters running on local production of cover crops and grass could annually generate more than $70 billion in new annual revenue and sequester 250 million metric tons of carbon dioxide, equivalent to 20.7 billion gallons of diesel fuel consumption.

"There needs to be a market pull to make continuous living cover standard practice on Iowa's landscape. We're hoping to grow a whole industry to provide that pull, " Schulte Moore said.

Education is needed, too. Many existing programs that provide farmers financial incentives to use conservation practices, including cover cropping, aren't fully used. The Horizon II grant will help address the need for expanded outreach by expanding C-CHANGE's team of ISU experts, which includes economists, agronomists, engineers and extension specialists.
"This is not like flipping a light switch. It really is a management transition that takes design, testing, data collection, demonstration and awareness-building. It will be a process," Schulte Moore said.

Iowa State University News Service

Contacts:
Lisa Schulte Moore, NREM, 515-294-7339; lschulte@iastate.edu
Dave Roepke, ISU News Service, 515-294-4548; dcroepke@iastate.edu
John Crespi, CARD, 515-294-1699; jcrespi@iastate.edu
Nathan Cook, Communications Specialist, CARD, 515-294-3809; nmcook@iastate.edu

Survey shows private well water users are at risk of exposure to unhealthy levels of nitrate or bacteria

AMES, Iowa – The results of a new drinking water survey reveal a stark risk of exposure to potentially unhealthy drinking water. Risk profiles were compiled based on recent testing, use of reverse osmosis filters, and use of supplemental water sources.

The Iowa Drinking Water Survey was conducted by the Conservation Learning Group, a think tank based at Iowa State University Extension and Outreach, and the Center for Agricultural and Rural Development at Iowa State University, which conducts innovative public policy and economic research. The results of the survey can be found in this online report and infographic.

The survey was designed to gather information and provide a stronger understanding of well water testing frequency, what avoidance behaviors users may employ to mitigate risk, filtering efforts and water quality perceptions.

“Around 7.6% of Iowa households — 230,000 to 290,000 Iowans — rely on private well water as their water source,” said Jamie Benning, assistant director for Agriculture and Natural Resources Extension at Iowa State. “The Iowa Department of Natural Resources and the Environmental Protection Agency recommend yearly testing of private wells, but it is the owner’s responsibility to test. There are no requirements or regulations related to well water testing by homeowners. This study helps to start filling the information gap so we can better understand behaviors related to well water that will inform outreach to help protect the health and wellbeing of rural Iowans.”

Some 73% of surveyed households are at risk of exposure to potentially unsafe water due to lack of recent testing, avoidance and/or mitigation. This equates to a number of Iowans at risk that falls somewhere between the population of Cedar Rapids and Des Moines. And 33% are categorized at the highest risk level because of no testing and no avoidance.

Other key findings included in the report
Only 10% of households tested their water quality in the last year.
Around 50% of households supplement their drinking water with bottled water or water coolers.
While 70% of households report using water filters, just 10% report having a reverse osmosis filter that can remove nitrate.
“Nitrate infiltration into water sources is simply a part of Iowa’s agricultural ecosystem, and while many efforts are being made to control loss of agricultural nitrate to waterways, there is a risk of elevated nitrate in private wells,” continued Benning. “The report clearly identifies needs for more regular testing and awareness of the potential risks. Testing can bring peace of mind that well water is safe to drink or inform next steps if an unsafe level of a contaminant is found. In the report, we make recommendations for education and outreach supports which can help carry the message to well users, but there is still more to learn, and more effort required to identify at-risk households, inform them, and incentivize testing and mitigation actions.”

The Center for Agricultural and Rural Development, the Leopold Center for Sustainable Agriculture and the U.S. Department of Agriculture National Institute of Food and Agriculture Project No. IOW05570 provided funding that supported this project.

Iowa State University Extension and Outreach

Contacts:
Ann Staudt, Program Specialist, 515-294-4878; astaudt@iastate.edu
David Keiser, Professor; dkeiser@umass.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

DES MOINES – Fertilizer producers’ profits have soared over the last two years as farmers were hit hard by increased prices, according to a new study by Iowa State University and requested by Iowa Attorney General Tom Miller.

While crop prices have roughly doubled over the past couple of years, fertilizer prices are two to four times higher than they were in September 2020. Fertilizer producers have higher profit growth during the pandemic than many other food and agricultural industries, the analysis by ISU’s Center for Agricultural and Rural Development shows.

The report contains some promising news: “As supply chains improve, ports reopen, labor becomes more available, and energy prices ease, the expectation is that fertilizer prices will decline in the second half of 2022.” However, factors could prevent fertilizer prices from stabilizing in the short and longer term, including “natural gas demand and supply, changes in trade policy or economic sanctions, increased acreage demand by farmers, and potential market power in the fertilizer industry.”

The study says there is not enough evidence to determine whether fertilizer producers are using their market power to engage in “greedflation.” Whether “fertilizer firms may be taking advantage of inflation to raise prices . . . are good questions for which we need more data,” according to the report by agriculture economist John Crespi, director of CARD, and other five other ISU researchers.

Miller thanked ISU for undertaking the study. “This thorough report raises many good questions, which we will continue to explore," he said. "Although there are a lot of unknowns, we remain concerned that increases in crop returns for farmers tend to coincide with even higher increases in fertilizer expenditures.”

In February, Miller announced that his office would examine the unprecedented increases in fertilizer prices after the Iowa Corn Growers Association approached him with concerns. Miller began working with U.S. Agriculture Secretary Tom Vilsack and others, and he requested information from the five major fertilizer manufacturers: Mosaic, Nutrien, CF Industries, Koch Industries, and OCI N.V. (owner of Iowa Fertilizer Co.)

The ISU study shows that from 2018-19 to 2020-21, net income for fertilizer companies have increased fourfold in some cases. Bunge’s profits increased 415%, Mosaic’s 418%, and Nutrien’s 276%. However, the study noted that many fertilizer companies had negative returns in 2018-19.

The fertilizer companies have cited many reasons for the price increases, which the ISU study notes: decreased production due to COVID, natural gas production disruptions and price fluctuations, natural disasters affecting production and natural gas demand, and tight global supplies compounded by the Chinese ban on exports and sanctions on Russia and Belarus.

Iowa Department of Justice Office of the Attorney General

Contacts:
Lynn Hicks, Chief of Staff, Office of the Attorney General, 515-281-6699; lynn.hicks@ag.iowa.gov
John Crespi, Director, Center for Agricultural and Rural Development, 515-294-1699; jcrespi@iastate.edu
Ashlee Kieler, Communications Specialist, Office of the Attorney General, 515-281-6710; ashlee.kieler@ag.iowa.gov
Nathan Cook, Communications Specialist, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iastate.edu

AMES, IA – Researchers at Iowa State University found significantly different state tax rates affect where new businesses set up shop near state lines. Their study published in the journal Small Business Economics shows the fourth greatest distortion in the U.S. is between Iowa and its northwest neighbor.

"The probability of starting up on one side of the border versus the other due to tax rates is 7.5% higher in South Dakota than Iowa, but it may not be for the reasons people think. Namely, property taxes seem to matter more than other types of taxes and providing certain incentives for some businesses in Iowa may hurt others,” said University Professor of Economics Peter Orazem who led the study.

Orazem explained he and his team focused on state borders because this approach helps control for unobservable local factors that would influence new businesses on both sides of the border, such as an atypically strong local economy, better local access to labor or venture capital, or an unusually supportive local business community.

To collect their data, the researchers looked at the individual and combined effects of four types of state taxes (i.e., property, sales, personal income, corporate income) and pulled information on new businesses less than a year old between 1999 and 2015 from the Statistics of U.S. Businesses under the U.S. Census Bureau.

“The reason we were particularly interested in business startups is that they may consider multiple locations to set up. They will be more sensitive to different tax rates compared to a well-established firm that would have to move all of its equipment and employees or find new workers if it jumped state lines,” said Orazem.

The researchers found a state with a one-point higher tax rate in each of the four types of taxes will have a “small but statistically significant” 3.2% lower probability of attracting a startup than its neighboring state. The greatest distortion in startups due to tax rates in the U.S. is Wyoming's 8.6% advantage over Idaho. Wyoming’s state revenue is largely subsidized by taxes and royalties from fossil fuel production in the state, which eases the pressure to tax other types of businesses.

Orazem and his team emphasized the probability of businesses starting up on one side of the border or the other drops off when two neighboring states have similar tax structures. For example, Rhode Island has the highest tax rate in the U.S., but its neighbor, Connecticut, has the third highest tax rate, essentially erasing what could otherwise be a disadvantage.

The study also found property taxes have the greatest adverse effect on the rate of new businesses. Orazem explained that’s because new businesses may pay property taxes even if they are not generating any revenue.

Gaining a competitive edge
As director of the Program for the Study of Midwest Markets and Entrepreneurship at ISU, Orazem said he and his colleagues are always trying to figure out what incentivizes and prevents businesses from setting up in Iowa and the region.

"Tax policies are one of the reasons why people have specified South Dakota as being a relatively faster growing state in the Midwest. So, even though the study isn’t focused on South Dakota, we were curious if we could see a difference, which we did.”

But Orazem emphasized many of the strategies implemented in Iowa to try to stay competitive with South Dakota are not necessarily the most efficient.

“What’s bizarre about Iowa is we tend to have high marginal tax rates, but then we give tax breaks to some businesses and not to others. For example, we have around 450 special exemptions for the sales tax,” said Orazem. "Maybe we should stop giving special deals in general but lower tax rates where they really matter, like property tax rather than income tax.”

Orazem said he hopes the study’s findings will open the discussion but recognizes state tax reform is challenging.

Iowa State University News Service

Contacts:
Peter Orazem, 515-294-8656; pfo@iastate.edu
Rachel Cramer, News Service, 515-294-6136; rcramer@iastate.edu

AMES, Iowa – A new study that combines survey data and cutting-edge computer modeling found a growing trend in tillage intensity in U.S. corn and soybean production in recent years has led to an increase in greenhouse gas emissions from agricultural fields.

The study, published recently in the academic journal Nature Food, drew on years of survey data that asked thousands of U.S. farmers about their tillage practices. The researchers then plugged the relevant data into sophisticated ecosystem models to see how tillage decisions affect soil emissions of greenhouse gases, including carbon dioxide and nitrous oxide.

The survey data indicate farmers relied less on tillage during the period between 1998 and 2008, but that trend began to reverse around 2009 when tillage intensity started to rise.

Chaoqun Lu, an Iowa State University associate professor of ecology, evolution and organismal biology and lead author of the study, said the growing resistance of weeds to the common herbicide glyphosate likely contributed to increased tillage. Genetically engineered herbicide-tolerant crops hit the agricultural scene in the late 1990s, and their adoption freed farmers from some of their reliance on tillage as a method of weed control. But growing numbers of weed species with resistance to the herbicide have emerged over the decades, reducing the effectiveness of the herbicide and making tillage a more attractive weed control option once again. And as tillage intensity grows, more carbon and nitrogen stored in the soil release into the atmosphere in the form of greenhouse gases, Lu said.

“One of the interesting pieces that we found in this study is tillage intensity has shifted from a declining trend to an increasing trend since 2008,” Lu said. “Our regression analysis suggests this trend is correlated to the wide adoption of herbicide-tolerant crops before 2008 and emerging weed resistance after 2008. We can’t assert a strict causal relationship, but regression analysis reveals a strong relationship between them.”

The survey asked questions about farmers’ decisions on seed varieties and cultivation practice intensity. Survey topics included no-till, conservation tillage (e.g., ridge till, mulch till), and conventional tillage (e.g., moldboard plow, chisel plow, disk harrow). The data show no-till grew by roughly 12 million acres for corn production and nearly 17 million acres for soybeans between 1998 and 2008. But no-till corn acres declined by nearly a half million acres between 2009 and 2016 and declined by nearly 6 million soybean acres during that period, according to the survey. Corn acreage under conservation tillage and soybean acreage under conservation and conventional tillage showed similar trends, first declining between 1998 and 2008 before climbing back to previous levels by 2016.

Feeding the data into the land ecosystem models shows that gains in tillage intensity since 2009 have offset the greenhouse gas mitigation benefits achieved during the tillage declines from 1998 to 2008.

Lu said the study uncovers a relationship between weed resistance, seed technology and greenhouse gas emissions that could lead to a better understanding of how farm practices can mitigate climate change. Her team’s previous research showed that nitrous oxide emissions from farmland in the U.S. Corn Belt have increased in recent years, largely due to the widespread application of nitrogen fertilizers to agricultural land. The added nitrogen is partially used by crops, but the remainder either stays in soils or is lost to the environment. During this process, microorganisms living in soils consume nitrogen-containing compounds and give off nitrous oxide as a byproduct.

Meanwhile, soil organic matter decomposes and partially converts into carbon dioxide. Both are powerful greenhouse gases that have potential to warm the climate. Intensive tillage practices disturb the soil, alter soil moisture and aeration status, and stir heavy crop residue into soils, which together change the production rates of soil greenhouse gases and allow more of them to escape, Lu said.

Lu pointed to the use of alternative herbicides to combat glyphosate-resistant weeds, or using glyphosate in fewer consecutive years, as well as the diversification of crops beyond corn and soybeans as options to control weeds without increasing greenhouse gas emissions.

“Without an effective strategy to control weeds, tillage intensity could continue to grow in the future and could undermine greenhouse gas mitigation achievements from other agricultural activities,” Lu said.

David Hennessy and Hongli Feng, both of whom are faculty at the Center for Agricultural and Rural Development were involved in the study, as were Zhen Yu at Nanjing University of Information Science and Technology in Nanjing, China, Hanqin Tian at Auburn University, and Dafeng Hui at Tennessee State University.

Iowa State University News Service

Contacts:
Chaoqun Lu, Ecology, Evolution and Organismal Biology, 515-294-7443; clu@iastate.edu
Fred Love, News Service, 515-294-0704; fredlove@iastate.edu

AMES, Iowa – Record high commodity prices, crop inputs and land values are topics that will drive discussion at the 94th annual Soil Management and Land Valuation Conference, May 18 in Ames.

The average acre of Iowa farmland increased nearly 30% last year, according to results of the Iowa State University Land Value Survey, released in November. Many variables continue to change in today’s agricultural landscape and will be part of the discussion.

This year’s conference will be offered in person at Iowa State University’s Scheman Building from 8:15 a.m. to 4:30 p.m., as well as virtually via Zoom. The in-person registration fee is $150 and the virtual option costs $175.

“This year’s program will examine several current issues in rural property management, appraisal, and sales and purchases, as well as agricultural policy,” said Wendong Zhang, associate professor in economics and extension economist at Iowa State. “We have lined up a dozen soil land management and land valuation professionals to address these issues.”

A half-dozen current issues and their implications to soil management and land valuation will be discussed. The topics include the U.S. and global agricultural economy outlook, a panel discussion on farmland and equipment values, a weather outlook and its impacts on agricultural production, the skyrocketing fertilizer and other input costs, a panel discussion on conservation easements and land trusts, and an agricultural market outlook focusing on crops.

The conference offers networking opportunities for professionals who have an interest in agricultural land, land management and land valuation. Additionally, participants have the opportunity through an online survey before the conference to “gaze into their crystal balls,” and will be asked to provide their estimates of future land values in Iowa and corn and soybean prices via an online survey distributed before the conference.

Sponsored by Iowa State University’s College of Agriculture and Life Sciences and ISU Extension and Outreach, the Soil Management and Land Valuation Conference is intended for farm managers, rural appraisers, real estate brokers and others interested in the land market in Iowa.

This is the longest running conference at Iowa State in both research and extension, and 2022 will mark the 94th annual meeting in this series. The conference is intended for anyone who has an interest in agricultural land, land management and land valuation. The program is planned each year by the ISU Extension and Outreach economics team within Iowa State’s Department of Economics.

Organizers are applying for 6.5 hours of real estate continuing education credits from the Iowa Real Estate Commission, and at least 6 (possibly 7) hours of appraiser continuing education credits from the Real Estate Appraiser Examining Board, respectively. There will also be three $50 gift card giveaway opportunities for the participants throughout the day.

Other presenters from Iowa State will include Chad Hart, professor in economics and extension grain markets specialist; and Bobby Martens, associate professor and agricultural supply chain specialist with ISU Extension and Outreach.

Register online at www.regcytes.extension.iastate.edu/smlv/register/.

For questions regarding the conference content, contact Wendong Zhang at
515-294-2536 or wdzhang@iastate.edu.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu

Annual Iowa State University survey finds average nominal value of Iowa farmland per acre reached historic high, but still lower than 2012 and 2013 values in inflation-adjusted terms

Ames, Iowa – After several years of modest gains and losses, the average value of an acre of Iowa farmland skyrocketed 29% in 2021. The nominal value of an acre of farmland is now higher than at any point since Iowa State University began surveying values in 1941, and is 12% higher than the previous peak in 2013; although the current value in inflation-adjusted terms is still lower than that for 2012 and 2013.

The last time farmland values increased more than 25% was in 2011, when values rose 32.5%. “Surging ethanol demand and high commodity prices were two of the significant factors driving the increase in 2011,” said Wendong Zhang, an associate professor of economics at Iowa State’s Center for Agricultural and Rural Development. “The increase this year is in part due to much stronger commodity prices thanks to higher exports, stronger than expected crop yields, and strong ad hoc COVID-19 related government payments,” Zhang said.

Zhang leads Iowa State’s annual Land Value Survey, which found that the average statewide value of an acre of farmland is $9,751, an increase of 29%, or $2,192, since 2020. The $9,751 per acre estimate, and 29% increase in value, represents a statewide average of low-, medium-, and high-quality farmland.

Zhang said that favorable interest rates also contributed to the increases in 2011 and this year; however, he noted that inflation was a very important factor behind the value increase this year as well. Last week, the U.S. Bureau of Labor Statistics reported that the U.S. inflation rate rose 6.8% over the last year, which was the largest increase since 1982.

“Inflation is driving some investors to consider farmland as an alternative investment asset because farmland value tends to rise with higher inflation. The inflation-adjusted average value rose 21% but the nominal value rose 29%, which shows the effect of inflation,” Zhang said.

As for U.S. net farm income, Zhang said it is forecasted to grow $22.0 billion (23.2%) from 2020 levels to $116.8 billion in 2021, which is the highest level since 2013. “The increase in 2021 farm income is largely driven by the rises in commodity prices and the resulting crop and livestock receipts, as opposed to almost solely ad hoc federal government payments as in 2020,” he said.

After the large increase in 2011, farmland prices jumped another 23.7% in 2012, though Zhang said that while 80% of respondents had optimistic views about what the farmland market would look like one year from now, most reported that they expect values to increase less than 10% in 2022.

Looking five years ahead, Zhang said that the number of respondents expecting a decline in farmland values nearly doubled, but over 80% of respondents predicted that farmland values would rise another 10% to 20% over 2021 values.

Land Values by County
All 99 of Iowa’s counties showed an increase in land values. For the ninth consecutive year, Scott and Decatur Counties reported the highest and lowest values, respectively. Land values in Scott County increased 30%, or $3,193 per acre, to $13,852. Land values in Decatur County increased 31.5%, or $1,213 per acre, to $5,062.

Clayton and Allamakee Counties reported the largest percentage increase, 36.4%, while Scott County saw the largest dollar increase, $3,193 per acre. The smallest percentage increase, 23.2%, was reported in Keokuk County, while Taylor County saw the smallest dollar increase, $1,199 per acre.

Land Values by District
Land values across all crop reporting districts increased. The Northwest district reported the highest overall value, $12,164 per acre, while the North Central district reported the largest percentage increase, 34.5%, and the largest dollar increase, $2,737 per acre.

The South Central district reported the lowest values, $6,035 per acre, and the lowest dollar change, $1,377 per acre, while the Southeast district saw the smallest percentage increase, 21.9%.

Land Values by Quality
Statewide, low-quality land now averages $6,397 per acre, an increase of 26% or $1,319 per acre. Medium-quality land now averages $9,071 per acre, an increase of 27.4% or $1,953 per acre. High-quality land now averages $11,834 per acre, an increase of 30.5% or $2,766 per acre.

The Northwest district reported the highest values for low-, medium-, and high-quality land at $8,088, $11,042, and $13,997 per acre, respectively. The South Central district reported the lowest values for low-, medium-, and high-quality land at $4,058, $6,094, and $8,194 per acre, respectively.

Low-quality land in all crop reporting districts, less the Southeast district, saw increases of more than 23%. The North Central district saw the largest percentage increase, 32%, and the largest dollar increase, $1,695 per acre. The Southeast district showed the smallest percentage increase, 14.5%, and the smallest dollar increase, $600 per acre.

Medium-quality land saw increases of more than 30% in the North Central, Northeast, West Central, and South Central districts. The South Central district saw the largest percentage increase, 33.6%, while the North Central district showed the largest dollar increase, $2,291 per acre. The Southwest district reported both the smallest percentage increase, 22.3%, and the smallest dollar increase, $1,302 per acre, in medium-quality land.

High-quality land in the North Central, Northeast, West Central, and East Central districts all saw increases of more than 30%, with the North Central district reporting the highest percentage increase, 35.7%. The East Central district reported the largest dollar increase in high-quality land at $3,304 per acre. The Southeast district reported the smallest percent change in high-quality land, 25%, and the South Central district reported the smallest dollar increase, $1,786 per acre.

Factors Influencing the Land Market
The most frequently mentioned positive factor influencing the land market was higher commodity prices. Favorable interest rates and strong yields were the second- and third-most frequently mentioned factors. Other frequently mentioned factors included limited land supply, strong demand, COVID-related government payments, and a good farm economy.

The most frequently mentioned negative factor affecting land values was higher input costs. Other noted factors included concerns about the sustainability of high land prices, possible changes in interest rates, political uncertainty related to policies, such as tax law changes, and uncertainty related to COVID-19.

Land values were determined by the 2021 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development at Iowa State and Iowa State University Extension and Outreach. Results from the survey are consistent with results by the Federal Reserve Bank of Chicago, the Realtors Land Institute, and the U.S. Department of Agriculture.

The Iowa State Land Value Survey is based on reports by agricultural professionals knowledgeable of land market conditions, such as appraisers, farm managers, agricultural lenders, and actual land sales, and is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The 2021 survey is based on 645 usable responses from 455 agricultural professionals. Seventy-five percent of the 455 respondents answered the survey online.

The Iowa State Land Value Survey was initiated in 1941, the first in the nation, and is sponsored annually by Iowa State. The survey is typically conducted every November and the results are released mid-December. Only the state average and the district averages are based directly on the Iowa State survey data. County estimates are derived using a procedure that combines the Iowa State survey results with data from the U.S. Census of Agriculture.

CARD offers a web portal at https://www.card.iastate.edu/farmland/ that includes visualization tools, such as charts and interactive county maps, allowing users to examine land value trends over time at the county, district, and state level.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, Iowa – A new study by Iowa State University economists found that lake recreation activities in Iowa drove over $1 billion in spending in the state in 2019.

“In terms of lake expenditures, compared to the $983 million dollars of direct spending in 2014 (equivalent to $1.059 billion in inflation-adjusted 2019 dollars), the estimated total direct spending associated with single-day trip visits to Iowa’s lakes in 2019 was $1.023 billion dollars, with an average total expense per lake of $7.4 million dollars,” said Wendong Zhang, an assistant professor of economics at Iowa State’s Center for Agricultural and Rural Development (CARD) who helped conduct the study.

“$1 billion is a big number—more than half a percent of the Iowa economy,” Zhang said. “The U.S.-China trade tariffs in 2018 resulted in $1 billion to $2 billion in lost state revenue, for comparison,” he said.

“It is quite significant, if you consider the current-dollar outdoor recreation-related GDP for Iowa in 2019 was around $3.6 billion,” said Yongjie Ji. Ji is a research scientist at CARD and was involved in the study along with Zhang and Xibo Wan, a former Ph.D. student of Zhang’s and current postdoctoral research associate at Massachusetts Institute of Technology.

Zhang emphasized that the $1.023 billion in direct spending was only related to single-day trips to Iowa lakes, “so it does not include lodging expenses, and it does not include spending related to overnight trips.”

Wan, Ji, and Zhang worked with the Iowa Department of Natural Resources on the 2019 Iowa Lakes Survey, which provided the data for their study. The survey was previously conducted every year from 2002 to 2005, and in 2009 and 2014. Ji said the 2019 survey was sent to 7,000 households in Iowa and, for the first time, states bordering Iowa.

The study shows that total direct spending on lake recreation and the number of single-day and overnight trips to Iowa lakes were all about the same as in 2014—in 2019 the number of Iowa households making lake trips increased, but the number of trips per household decreased. However, Ji said, “the estimated total household single-day trips across Iowa in 2019 was about nine million, which is about the same as the 2014 estimates.”

The 2019 study found that 65 percent of Iowa respondents took at least one single-day trip and 20 percent took at least one overnight trip to an Iowa lake, with the average being about eight single-day trips and about two overnight trips per household. For out-of-state respondents, about 22 percent took at least one single-day trip and 9 percent took at least one overnight trip, with the average being about two single-day trips and roughly one overnight trip per household.

While the COVID-19 pandemic has changed many aspects of Iowans lives over the past year-and-a-half, it did not have any impact on survey results—the survey focused on lake trips in 2019, and the researchers said that the majority of surveys were returned before the pandemic began in March 2020.

“There is no reason to believe that the pandemic affected the visitation patterns revealed in the survey,” Zhang said. “However, there is evidence that the pandemic affected people's usage of local amenities—lakes, rivers, and state parks included.”

The 2019 survey did reveal some changes in the most popular lakes in Iowa. In 2014, Saylorville Reservoir, Clear Lake, West Okoboji Lake, Grays Lake, and Big Creek Lake were, respectively, the five most popular lakes for trip-takers. However, the 2019 survey showed that Clear Lake overtook Saylorville Reservoir as the most popular, while Ada Hayden Lake and Lake MacBride joined the top-five and West Okoboji Lake and Big Creek Lake dropped out of the top five.

One thing has not changed since the 2014 survey—respondents in 2019 said that water quality is the most important factor when choosing a lake for recreation, even more important than the park facilities available on premises or the lake’s proximity to their household. About 70 percent of respondents said they checked water quality status before visits—83 percent of Iowa respondents said they checked the DNR website and another 32 percent used DNR social media platforms to do so.

The majority of respondents were mostly concerned about agricultural runoff, livestock manure, and urban runoff as pollutant sources. Zhang said the 2019 survey included a new section about harmful algal blooms, which “are a growing concern in Iowa lakes and many US freshwater recreational sites.” A harmful algal bloom is when naturally occurring algae grow out of control, producing harmful and often toxic effects.

“Harmful algal blooms can directly harm humans with algal toxins and they have led to beach closures. It is best to avoid contact with the waterbody when a large harmful algal bloom is present,” Zhang said. About 32 percent of respondents reported seeing a large algal bloom in an Iowa lake in 2019, and of those, about 82 percent reported either moving to a different area of the water body or stopping all water-related activities.

Survey reports, interactive maps, and other lakes-related publications are available at https://www.card.iastate.edu/lakes/.

CARD researchers will conduct a similar lake-recreation survey from January to March 2022 that will focus on the lake trips taken by underrepresented and socially disadvantaged Iowans. The Iowa Water Center is funding that research.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – A news conference will be held at 10:00 a.m. on Tuesday, December 14 to announce the results of the 2021 Iowa Land Value Survey conducted by the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach. Please note the change in location from previous years—the conference will take place in room 0009 of Curtiss Hall on the ISU campus in Ames.
For those who can’t attend the conference, a livestream will be available on YouTube at http://bit.ly/LandResults2021.

Wendong Zhang, associate professor of economics and farm management specialist, will head the news conference and announce the 2021 findings. Printed materials will be provided at the conference, including Iowa land value data from 1950 to present, current land value data from all 99 counties, and a press release summarizing the 2021 results. Dr. Zhang will make himself available to reporters for follow-up questions or one-on-one interviews immediately following the presentation of results.

The ISU Land Value Survey is currently ongoing, if you are an agricultural professional knowledgeable about the farmland market who has not participated in this year’s survey, you can participate in the ISU Land Value Survey online by December 1 at http://bit.ly/LandResults2021. If you have questions regarding the survey please contact Dr. Wendong Zhang at wdzhang@iastate.edu or call 515-294-2536. You can also see the land value trends at the county, district, and state level since 1950 at the interactive Iowa Farmland Value Portal at https://www.card.iastate.edu/farmland/.

An archive of the video and the printed materials available at the conference will be posted on the CARD homepage at https://www.card.iastate.edu soon after the conference.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu

AMES, Iowa — The relationship between the United States and China may be at its lowest point in recent history, but both countries continue to need each other to achieve strategic goals in agriculture, food production and food security.

This message reverberates through a new policy report, "Finding Firmer Ground: The role of Agricultural Cooperation in US.–China Relations" by Wendong Zhang, associate professor of economics at Iowa State University, and Dr. Minghao Li, assistant professor of economics, applied statistics and international business at New Mexico State University, previously with the Center for Agricultural and Rural Development (CARD) at Iowa State. Their white paper was commissioned by the U.S. Heartland China Association (USHCA) and the Carter Center with additional support from the Ford Foundation, the Henry Luce Foundation and the U.S. Department of Agriculture National Institute for Food and Agriculture. Zhang is a member of the USHCA Agriculture Committee.

“Finding Firmer Ground” acknowledges threats to U.S.-China relations amidst growing mutual mistrust and an ongoing trade war. Yet, it emphasizes both countries’ strong interests in furthering mutual goals and the importance of maintaining channels through which their relationship can be rebuilt.

“We were thinking about what the agricultural sector can do to improve U.S. – China relations in the current situation and the path forward to cooperate despite the political rhetoric in both countries,” said Zhang, who was born in Shandong Province in China.

The paper outlines four areas of mutual dependence: improving global food security, meeting China’s demand for food quality, addressing climate change and pursuing technological advancement.

“States in the U.S. Heartland are crucial stakeholders in the U.S. China trade relationship,” Zhang said, “As such, agricultural states and entities such as the USHCA have an important mission to foster a positive, productive and beneficial relationship by creating channels for collaboration.”

Zhang and Li describe four channels as particular opportunities for shared economic growth:

• Normalizing the trade relationship;


• Reducing regulatory barriers and mutual suspicion;


• Investing in infrastructure; and


• Enhancing research collaboration.

The white paper was inspired by the inaugural U.S.-China Agriculture Roundtable held in March 2021, where Zhang moderated a session on agricultural education. The dialogue was attended by former U.S. Ambassador and World Food Prize President Emeritus Kenneth Quinn.

Quinn, who contributed a foreword to the new white paper has long been involved in efforts to nurture agricultural cooperation between the United States and China. Among those experiences, he recounts a pivotal 1980 visit to Iowa State’s Seed Science Center by Governor Xi Zhongxun (father of Chinese President Xi Jinping). At the time, Quinn, an officer in the State Department, was escorting the first delegation of Chinese provincial governors to visit America following establishment of diplomatic relations.

“Since that time, I have been involved in a number of exchanges that have deepened relationships that started then,” Quinn said. “Agricultural cooperation has been at the heart of these events and many more that have elevated the level of exchange between our two countries.”

“I believe this impressive study by Drs. Zhang and Li adds a significant analytical element to the effort to continue Sino-American-Iowan agricultural cooperation, which has such a long and illustrious history.”

Wendong Zhang, originally from China’s Shandong Province, is a co-founder with economist Dermot Hayes of a new China Ag Center within CARD. Among the center’s projects is a new collaboration with the Chinese Academy of Agricultural Sciences to sponsor shared educational exchanges.

“We want to encourage students and faculty at here and at partnering institutions to try to learn more about each other and find potential areas to build goodwill and cooperation,” Zhang said.

He notes that China and the U.S. have recently announced a virtual summit between Presidents Xi Jinping and Joe Biden will be held before year’s end. Zhang predicts some of the issues raised in the USHCA-Carter Center white paper will be topics addressed at the summit.

College of Agriculture and Life Sciences Communications

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Minghao Li, Applied Statistics and International Business Department, New Mexico State University; minghao@nmsu.edu
Min Fin, US Heartland China Association, 970-219-0499; mfan@usheartlandchina.org
Ann Robinson, College of Agriculture and Life Sciences Communications, 515-294-3066; ayr@iastate.edu

Ames, IA – Two Iowa State University researchers will join a five-year $10 million project funded by the USDA National Institute of Food and Agriculture that seeks to make Midwestern agriculture more resilient by moving away from the dominant corn-soybean rotation.

“Growing only a rotation of corn and soybeans is not necessarily sustainable economically, environmentally or socially. We will be working with farmers in Indiana, Illinois and Iowa to evaluate alternative cropping systems that can be used in the Midwest—we will be evaluating small grains and/or forage crops in rotations, perennial forage or bioenergy crops, agroforestry, horticultural food crops, and grazed livestock,” Linda Prokopy said in a Purdue University press release.

Prokopy is department head and professor of horticulture and landscape architecture at Purdue University and is leading the project, titled “#DiverseCornBelt: Resilient Intensification through Diversity in Midwestern Agriculture.”

Iowa State’s component of the team will include J. Arbuckle, professor and Extension sociologist, and Phil Gassman, research scientist at the Center for Agricultural and Rural Development. Arbuckle will help lead the social science research component of the project including stakeholder listening sessions, surveys and interviews, which will ensure that farmer and stakeholder needs and ideas will guide the diversification efforts. Gassman will play a key role in modeling the potential hydrological and environmental impacts of agricultural diversification.

“This is an exciting effort that will engage farmers and stakeholders across the supply chain to help bring more options to farmers in Iowa and across the Midwest,” Arbuckle said. “The project will focus on facilitating diversification that leads to greater economic stability for farmers and agroecological system resilience.”

Gassman said that research shows that different kinds of cropping systems can have major impacts on water quality and quantity. “Our modeling will simulate potential land use change to help guide transitions toward systems that use water more efficiently and that cause less pollution,” he said.

The research proposal received letters of support from farmers, industry, academic institutions and environmental organizations, including General Mills, Smithfield, Kellogg’s, Red Gold, the Indiana Agriculture Nutrient Alliance, the Indiana State Department of Agriculture, National Association of Conservation Districts, the Hoosier Young Farmers Coalition, the Iowa Soybean Association, and the National Wildlife Federation.

Partner institutions on the project include the American Society of Agronomy, Conservation Technology Information Center, USDA Economic Research Service, USDA Forest Service, Illinois State University, Iowa State University, Montana State University, The Nature Conservancy, Practical Farmers of Iowa, Sustainable Food Lab, University of Illinois at Urbana-Champaign, University of Iowa, University of Minnesota, and University of Wisconsin Madison and Platteville.

Contacts:
J. Arbuckle, 515-294-1497; arbuckle@iastate.edu
Phil Gassman, 515-294-6313; pwgassma@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa — A new study underway by economists at Iowa State University aims to better understand nutrient impacts through the lens of local recreation and tourism, with a focus on assessing the economic impacts of water quality improvement on rural and lower-income communities.

The project is jointly funded by the Iowa Water Center and the Iowa Nutrient Research Center at Iowa State University through a special grant program designed to encourage research on the social dimensions of Iowa water quality.

The project, “Environmental Justice for All: Nutrient Impacts on Lake-Based Recreation and Tourism by Rural and Socially Disadvantaged Iowans,” is being led by Wendong Zhang, associate professor of economics at Iowa State, with co-investigators Yongjie Ji, research scientist with the Center for Agricultural Research and Development (CARD); David Swenson and Liesl Eathington, research scientists, economics; and Xibo Wan and Wenran Fan, doctoral students, economics.

Their main objectives will be to build on historical Iowa Lakes Survey data by examining how water quality influences participation and perceptions related to lake recreation activities.

The IWC-INRC funding will support a new survey of 2,000 Iowans to be conducted early next year as a supplement to the 2019 Iowa Lakes Survey, part of the Iowa Lakes Valuation Project. The data will reflect additional input from rural and low-income households, groups that have been underrepresented in previous surveys. The economists will also analyze the economic impacts of recreation and tourism activities on local economies and use that information to project how different water quality scenarios could influence interest and participation in lake-based recreation.

“The project will contribute to the growing literature on the economics of environmental justice,” said Zhang. “We hope the findings will also be useful to help inform policymakers on approaches that are more inclusive and fair and can improve Iowa’s water quality for all the state’s residents.”

IWC and INRC are continuing the special grant program with a new request for proposals released for projects that will begin in 2022. The research must be led by faculty from Iowa State University, the University of Iowa or the University of Northern Iowa. Other partners can include local communities, utilities, agencies, businesses and landowners. $60,000 is available to support one or multiple projects. Applicants must submit a proposal intention by Nov. 1. Get more details.

“By fostering greater understanding of downstream impacts and social well-being in relation to nutrient issues, IWC and INRC are seeking to address the well-being of all members of society within the larger agroecosystem of the Mississippi River Basin,” said IWC director Rick Cruse.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Rick Cruse, Iowa Water Center, 515-294-7850; rmc@iastate.edu
Matt Helmers, Iowa Nutrient Research Center, 515-294-6717; mhelmers@iastate.edu
Ann Y. Robinson, Iowa Nutrient Research Center, 515-294-3066; ayr@iastate.edu

Ames, IA – The American Families Plan, proposed by the Biden administration in April, would provide new social programs to millions of U.S. households. To cover the $1.8 trillion benefits package, the Administration has proposed significant tax changes.

Specifically, the AFP proposes increasing the top marginal tax rate for ordinary income, taxing some capital gain at ordinary income tax rates, subjecting more income to the 3.8% Medicare tax, and taxing unrealized capital gain at death or upon gift. These changes would mean that some owners of property that has increased in value would pay tax at a rate as high as 43.4% when they sell the property or when they transfer it at death or by gift.

According to a new Iowa State University study, some of Iowa’s farmland owners could face a substantial increase in taxes to pay for the proposed plan. “Because of the proposed increase in rates, we estimate that, on average, a full-time farmer owning 358 acres of farmland would see tax liability from a lifetime sale increase from $475,248 to $860,572, an 81% increase, or from 14.5% to 26% of fair market value,” said Kristine Tidgren, director of Iowa State’s Center for Agricultural Law and Taxation.

Tidgren authored the study with Wendong Zhang, an associate professor of economics at Iowa State’s Center for Agricultural and Rural Development. Zhang said that their study looked at 80% of Iowa’s farmland owners, including those that own land as sole owners, joint tenants, tenants in common, and through a revocable living trust. He said that they did not study other owners that own farmland in corporations, partnerships, life estates, or irrevocable trusts that could face new tax liability as well.

“Among full-time farmers with any ownership interest in a whole farm of 200 acres or more, we estimate that 62% of owners and 79% of acres would be impacted by the AFP tax at death or gift, even with a $1 million exclusion. That number jumps to 99% of owners and 98.2% of acres when the whole farm size reaches 500 acres or more,” said Zhang. These estimates are based solely upon the owner’s interest in farmland.

The authors said that the impact of the AFP depends upon farm size and appreciation. In that way, a small farm that has increased substantially in value since the owner acquired it may be subject to tax while a large farm that was recently inherited would not face the new tax. “Identical farms across the road from each other would have completely different outcomes—one owner might owe $1 million in tax at death, and the other might owe none,” Tidgren said.

Under 100-year-old law, the basis of property transferred at death is adjusted to current value in the hands of the heirs. Called the “step up in basis,” this adjustment means that gain accruing during an owner’s lifetime is not taxed if the property is transferred at death. “If you die with land you purchased for $1,000/acre that’s now worth $8,000/acre, the law adjusts the value in the hands of your heirs to $8,000/acre, the fair market value of the property—that’s called a step up in basis,” Tidgren said. “The AFP proposes taxing those who die with gain greater than $1 million. So the first $1 million would still receive a tax-free step up in basis, but the rest would receive the step up only after paying the tax,” she said.

Tidgren said that the proposal includes a deferral for family owned businesses that pass the business or farm to a family member who continues to operate it. “This would apparently be a delay in payment of the tax, not an exemption from the tax. The impact of the deferral is dependent upon definitions and details that have not been released,” she said. For those required to pay the tax, the proposal suggests a 15-year payment plan, “but if they can’t cash flow that, they would have to sell,” Tidgren said.

Zhang said the proposed plan would “significantly change the estate and transition planning options for farmers and small businesses and impact those with assets that have appreciated during their lifetime.”

The authors noted that 83% of farmland owners would not be impacted by the proposed tax solely because of their ownership in farmland. This is largely because most Iowa farmland owners own fewer than 200 acres. However, ownership of other assets could still make the proposed tax affect those landowners. “Farmers also own many assets other than farmland and buildings—livestock, machinery, grain in the bin, etc. We did not consider these assets because we did not have specific data about them, and it is not clear how the proposal would treat this other property,” Zhang said.

Tidgren said that when they estimated tax liability in the study, they calculated the tax as though the farmer had no income or gain other than that arising from the gain associated with their farmland. “This means our calculated tax liabilities are generally the minimum tax liability for each owner. Additional gain or income would push the tax higher,” she said.

For now, the authors said, the AFP is only a proposal, and no current laws have been changed. “Most legislation doesn’t pass as proposed and we still have no proposed legislative language. These proposals, however, are significant, and farmland owners should begin watching the progress of any legislation in Congress. More specific proposals should be unveiled mid-September,” Zhang said.

The Center for Agricultural Law and Taxation provides timely, objective, unbiased information to producers, professionals, and agribusinesses concerning the application of important developments in agricultural law and taxation, and serves as a primary source of professional educational training in agricultural law and taxation.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Kristine Tidgren, 515-294-6365; ktidgren@iastate.edu
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, Iowa — Farm Foundation announced Alejandro Plastina, Associate Professor of Economics at the Center for Agricultural and Rural Development at Iowa State University, as its first Agricultural Economics Fellow.

The Agricultural Economics Fellowship is a new program designed to nurture a promising leader in the field. Plastina will be engaged with Farm Foundation for one year, during which he will have the opportunity to provide thought leadership through publications and speaking appearances, expand his professional network and manage high-visibility projects. He will participate in Farm Foundation programs and events, network with and be mentored by staff in the USDA’s Office of the Chief Economist, and mentor and meet with participants in Farm Foundation’s suite of next generation development programs.
Plastina’s area of specialization is agricultural production and technology, with an emphasis on farm business and financial management. His recent publications have addressed the economics of conservation practices such as cover crops and subfield land-use change from corn-soybean rotations into switchgrass, as well as agricultural productivity analyses.

“We are thrilled to welcome Dr. Plastina as our first Agricultural Economics Fellow,” said Shari Rogge-Fidler, President and CEO at Farm Foundation. “We have a long history with agricultural economists, on our board and in our programming, so this is an exciting extension for us. Dr. Plastina’s academic and practical experience brings great value to Farm Foundation’s programs for stakeholders throughout the food and ag value chain to advance their understanding of the economic issues surrounding critical topics such as sustainable agriculture.”

The Agricultural Economics Fellowship is the latest recognition for Plastina, who also received the ISU Office of the President Excellence in Remote Instruction Award in 2021; the ISU Extension and Outreach Creativity in Service to All Iowans Award in 2020; the Agricultural & Applied Economics Association Distinguished Extension Program Award in 2019; the ISU ANR Programming Innovation Award in 2018; and the ISU Extension and Outreach Impacting Iowa Award in 2014. He holds a Master of Science in Statistics and a doctorate in Agricultural Economics from the University of Nebraska-Lincoln.

Contacts:
Alejandro Plastina, 515-294-6160; plastina@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – The longest-running conference offered by Iowa State University Extension and Outreach will be offered May 19 via Zoom.

The Soil Management Land Valuation Conference – now in its 93rd year, was canceled last year due to COVID-19 concerns. The conference returns with timely updates for farm managers, rural appraisers, real estate brokers and others interested in the Iowa land market.

“The conference offers networking opportunities for those who have an interest in agricultural land, land management and land valuation,” said Wendong Zhang, assistant professor and extension economist at Iowa State. “Additionally, participants have an opportunity through an online survey before the conference to ‘gaze into their crystal balls,’ and will be asked to provide their estimates of future land values in Iowa and corn and soybean prices via an online survey distributed before the conference.”

The conference is sponsored by the Iowa State University College of Agriculture and Life Sciences and ISU Extension and Outreach and will be held virtually via Zoom on Wednesday, May 19, from 8 a.m. to 3:30 p.m.

Seven current issues and their implications to soil management and land valuation will be discussed. The issues are: agricultural policy priorities in 2021, presented by leading congressional staffers; agricultural carbon credits program for farmers; the weather outlook and its impacts on agricultural production; how Coalition to Support Iowa Farmers is helping livestock producers; agricultural market outlook; the impacts of COVID-19 pandemic on land and asset values; and key developments in agricultural law and regulations, such as the Waters of the United States rule and estate tax reforms.

“We are really excited to bring this conference back and although this year we are offering it through Zoom, participants will still have the chance to talk about the issues affecting land values and farm management,” said Zhang.

Registration, the agenda and a full line of speakers are all available on the event website.

Participants can receive six hours of real estate and appraiser continuing education credits from the Iowa Real Estate Commission and the Real Estate Appraiser Examining Board, respectively. There will also be three $50 gift card giveaway opportunities for the participants throughout the day.

For more information, contact Wendong Zhang at 515-294-2536 or wdzhang@iastate.edu.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu

Ames, Iowa – With just about one week left in the first year of the phase one trade deal, an Iowa State University study estimates that China has reached almost 75% of its obligated U.S. agricultural imports.

“Whether China can meet the target by February 15 depends largely on the on-time delivery of the advanced corn and soybean orders,” said Wendong Zhang. “China has ordered large amounts of corn and soybean for delivery for the rest of the 2020/21 marketing year, which ends on August 30, 2021. The exports are not official until transported to China, so whether China can meet the first-year goal depends largely on logistics,” he said.

Zhang is an assistant professor of economics at the Center for Agricultural and Rural Development at Iowa State University. He and his Iowa State colleagues Dermot Hayes and Xi He are the authors of “China’s Agricultural Imports under the Phase One Deal: Is Success Possible?”

Since they first authored the report in May, Hayes, Zhang, and He have continually updated their estimates of China’s U.S. agricultural imports under the phase one deal. The previous update, released in November, showed China had secured 52.2% of its obligated imports. The most recent update puts that number at 74.8%.

In November, the researchers noted that China made significant purchases of U.S. agricultural products in August and September, especially soybeans. And, while they say corn and meat products have been the focus of China’s recent purchases, it is likely they will still import a significantly larger amount of soybeans as they push toward the phase one goals.

“Soybeans accounted for 58% of China’s U.S. agricultural purchases in 2017 and only accounted for around 41% in the 2020 calendar year,” Zhang said. “In addition, the United States’ major competitor, Brazil, is experiencing drought and a late soybean harvest, which increases room for U.S. soybean purchases,” he said.

While Hayes said that the United States could choose to terminate the second year of the trade deal, he doesn’t think that’s likely, given the regulatory changes China is making to meet the agreement and the importance of China’s purchase commitments to U.S. agriculture. “Given the importance of healthy U.S.-China trade relations to U.S. farmers and China’s efforts in meeting its purchase targets, at least in the agricultural sector, it’s beneficial for both sides to continue to implement the deal,” he said.

Zhang said that the second year of the trade deal will more than likely be similar to the first year for U.S. agricultural producers. “China’s feed and meat demands are increasing due to rebuilding its hog herd,” he said. An outbreak of African swine fever in 2018 decimated China’s hog industry. “This pattern is very likely to continue in the second year of the trade deal.”

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Dermot Hayes, 515-294-6185; dhayes@iastate.edu
Xi He; xihe@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Annual ISU survey finds average value of Iowa farmland per acre increased 1.7% since 2019

Ames, Iowa – Favorable interest rates, a strong demand for land, and substantial government payments helped stabilize Iowa’s farmland market in a year in which Iowa’s farmers faced the destructive onslaught of a derecho, significant uncertainties in US agricultural trade, and a pandemic that significantly altered market demand.

“The land market faced downward pressure initially with the onset of the COVID-
pandemic, which lowered food demand and resulted in declines in livestock and ethanol prices,” said Dr. Wendong Zhang. Zhang is an assistant professor of economics at Iowa State University and is responsible for leading the annual Iowa Land Value Survey.
This year’s survey found that the average statewide value of an acre of farmland is $7,559, an increase of 1.7%, or $127, since 2019. The $7,559 per acre estimate, and 1.7% increase in value, represents a statewide average of low-, medium-, and high-quality farmland.

Statewide, Iowa’s high-quality farmland saw a decline in value of 0.1%. However, Zhang said that it’s important to note that number is more indicative of a flat market, rather than a decline, and that several factors have led to a recent rebound in the market. “The rebound in recent months is due to strong government payments, interest rate cuts, limited land supply, and recent commodity price rallies,” he said.

In mid-November, both US corn and soybeans prices their highest point so far this year. Despite some decline since then, both prices are still higher than at the beginning of the year, especially soybeans. “The export surges related to the phase one deal and China’s efforts to rebuild its hog herd ramped up demand for feed grains,” Zhang said.

“There is definitely concerns and downside risks about the price rallies because post-harvest prices are typically lower,” he said. However, he stressed that China is still at least 10%–15% short of its regular hog inventory, so farmers should continue seeing increased feed grain demand. Additionally, Germany, a key competitor for US pork exports, is now battling with African swine fever, the same disease that decimated China’s hog industry, which could increase US pork exports in the future.

Zhang also said that farm payments in 2020 helped prop up the farmland market “in a big way.” According to the USDA’s Economic Research Service, farm payments will increase 107% in 2020, mostly due to supplemental and ad hoc disaster assistance for COVID-19 relief. They also project net farm income will increase 43.1% in 2020.

Some of the increase in overall value this year is also due to increased demand for low-quality land in certain parts of the state. The overall average increase in farmland value was very modest, but low-quality land in the Northeast, West Central, South Central, and Southeast districts saw increases of 8% or more.

“Strong demand for pasture and timber grounds, which are even more appealing now with social-distancing requirements, contributed to the rise in low-quality land value,” Zhang said. However, he noted that when compared to high-quality land, it doesn’t take a substantial change in the dollar value of low-quality land to constitute a large percent increase in values.

Land Values by County
Seventy-eight of Iowa’s 99 counties showed an increase in land values. For the eighth year, Scott and Decatur Counties reported the highest and lowest values, respectively. Despite having the highest overall value, average land values in Scott County decreased $178 per acre to $10,659. Decatur County, however, saw average values increase $264 per acre to $3,849.

Wayne County reported the largest percentage increase, 7.7%, while Lyon County saw the largest dollar increase, $577 per acre. The largest dollar decrease was reported in Des Moines County, $241 per acre, and the highest percentage decrease, 3.4%, was reported in Henry County.

Land Values by District
The Northwest crop reporting district reported the highest land values, $9,536 per acre, and the South Central district reported the lowest, $4,658 per acre.

In general, land values across crop reporting districts increased—only the Southwest district reported a decline in land values (-0.9%). The largest percentage increases were in the West Central and South Central districts, 3.9% and 3.8%, respectively; however, both the Northeast and Northwest districts reported increases of 2% or higher.

Land Values by Quality
Statewide, low-quality land now averages $5,078 per acre, an increase of 6.7% or $319 per acre. Medium-quality land now averages $7,119 per acre, an increase of 2.6% or $181 per acre. High-quality land now averages $9,068 per acre, a decrease of 0.1% or $10 per acre.

Only low-quality land in the North Central district showed a decline in average prices this year (-0.5%). Low-quality land in the Northeast, West Central, South Central, and Southeast districts, however, all saw increases of 8% or more.

The West Central and South Central districts reported the largest gains in medium-quality land values, 5.0% and 4.4%, respectively. While no districts reported a loss in medium-quality land, the Southwest district only reported a nominal gain of $2 per acre.
High-quality land in five of Iowa’s nine crop districts saw increases of less than 2%, while East Central and Southwest districts reported a decline of more than 2%.

Factors Influencing the Land Market
Favorable interest rates, limited land supply, and recent commodity price rallies were the most frequently mentioned positive factors influencing the land market in this year’s survey. Other positive factors respondents noted included COVID-related payments, government payments, and strong demand for land, especially by farmers.

The most frequently mentioned negative factors affecting were lower commodity prices, uncertainty due to the COVID-19 pandemic and weather. Other negative factors included political uncertainty related to the 2020 election, poor yields, and general economic uncertainty.

Land values were determined by the 2020 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development (CARD) at Iowa State and Iowa State University Extension and Outreach. Results from the survey are consistent with results by the Federal Reserve Bank of Chicago, the Realtors Land Institute, and the US Department of Agriculture.

The Iowa State Land Value Survey was initiated in 1941, the first in the nation, and is sponsored annually by Iowa State. The survey is conducted every November and the results are released mid-December. Only the state average and the district averages are based directly on the Iowa State survey data. County estimates are derived using a procedure that combines the Iowa State survey results with data from the US Census of Agriculture.

The Iowa State Land Value Survey is based on reports by agricultural professionals knowledgeable of land market conditions, such as appraisers, farm managers, agricultural lenders, and actual land sales, and is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The 2020 survey is based on 707 usable responses from 484 agricultural professionals. Sixty-seven percent of the 484 respondents answered the survey online.

CARD offers a web portal at https://www.card.iastate.edu/farmland/ that includes visualization tools, such as charts and interactive county maps, allowing users to examine land value trends over time at the county, district, and state level.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

ISU researchers project China will top $31 billion in U.S. ag product imports in first year of trade deal

Ames, Iowa – Soybeans will once again top the list of U.S. agricultural exports to China, even as China exceeds its tariff rate quota for corn for the first time since implementing a TRQ system in 1996.

“In November, the World Agricultural Supply and Demand Estimates forecast U.S. soybean production at 4.17 billion bushels, down 98 million bushels due to lower yields in several major producing states including Illinois, Iowa, Indiana, Ohio, and Nebraska,” said Wendong Zhang, an assistant professor of economics at the Center for Agricultural and Rural Development at Iowa State University.

Some of that loss of production was due to a derecho that tore through the Midwest in August. Wind gusts reached 140 mph and flattened crops across both Iowa and Illinois, the two largest soybean-producing states.

However, even with production falling short of estimates, soybeans once again top China’s U.S. agricultural imports. “In the first nine months of the year, soybeans accounted for 31.3% of China’s total agricultural imports from the U.S., so they will remain the single largest export commodity,” Zhang said.

Zhang and his Iowa State colleagues Dermot Hayes and Xi He are the authors of “China’s Agricultural Imports under the Phase One Deal: Is Success Possible?” Zhang, Hayes, and He first authored the report in May and recently updated their estimate of China’s total U.S. agricultural imports under the phase one deal. Using the most recent data, they estimate that China will import just over $31 billion worth of agricultural and related products from the United States in the first year of the deal.

“In August and September, China’s agricultural purchases significantly accelerated, reaching $5.28 billion,” Hayes said. About $2.8 billion worth of those purchases were soybeans, according to Hayes.

Soybeans topping China’s U.S. imports isn’t surprising—as recently as 2016, China was purchasing 25% of the total annual U.S. soybean crop. However, factors other than the phase one deal have led to China accelerating purchases of U.S. corn as well.

According to the Iowa State researchers, China imported 74% of its corn from Ukraine in the first three quarters of 2020, but those purchases may be slowing as Ukraine faces production difficulties. “Ukraine’s corn production is forecast lower this year due to its unfavorable weather conditions and continued poor harvest results,” He said. “USDA’s November WASDE report projects lower corn yield in Ukraine, which could be its lowest since 2012/13—it’s reasonable to infer that China would shift away from Ukraine corn.”

Furthermore, since 2018, China has struggled with an outbreak of African swine fever in its hog production industry. Keeping the infection under control required culling millions of pigs, which led to China increasing both U.S. pork imports to cover the loss in domestic production and U.S. feed grains as it rebuilds its hog industry. “In 2019, animal feed accounted for 70% of China’s corn consumption, with the remaining 30% used for food, seed, and industrial use,” Hayes said.

China’s increased corn needs are reflected in recent data released by China’s General Administration of Customs on November 23, which shows that China imported 7.82 million metric tons of corn from all sources in the first ten months of 2020, exceeding its corn TRQ of 7.2 million metric tons. Furthermore, China has huge U.S. corn orders for delivery in November and December. The researchers also note that, given China’s growing corn needs and export sales commitments, it will greatly exceed its corn TRQ in 2021.

The good news for U.S. farmers is that China’s increased need for corn manifested as $358 million worth of purchases in August and September alone, Zhang said.

Hayes said that this was the first time that China had exceeded its corn TRQ since the system first came into use in 1996, which he said was one of the factors leading to optimism that China will be able to fully meet its $36 billion agricultural obligation under the first year of the phase one deal.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Dermot Hayes, 515-294-6185; dhayes@iastate.edu
Xi He; xihe@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – A news conference will be held at 10:00 a.m. on Tuesday, December 15 to announce the results of the 2020 Iowa Land Value Survey conducted by the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach. Please note the change in location from previous years—the conference will take place in room 9 of Curtiss Hall on the ISU campus in Ames.

If you plan to attend in person, please note that Iowa State requires face coverings in all campus buildings. For those who can’t attend the conference, a livestream will be available on YouTube at http://bit.ly/LandResults2020.

Wendong Zhang, an assistant professor of economics and farm management specialist, will head the news conference and announce the 2020 findings. Printed materials will be provided at the conference, including Iowa land value data from 1950 to present, current land value data from all 99 counties, and a press release summarizing the 2020 results. Dr. Zhang will make himself available to reporters for follow-up questions or one-on-one interviews immediately following the presentation of results.

The ISU Land Value Survey is currently ongoing, if you are an agricultural professional knowledgeable about the farmland market who hasn’t participated in this year’s survey, you can participate in the ISU Land Value Survey online by December 1 at http://bit.ly/landvalue2020. If you have questions regarding the survey please contact Dr. Wendong Zhang at wdzhang@iastate.edu or call 515-294-2536. You can also see the land value trends at the county, district, and state level since 1950 at the interactive Iowa Farmland Value Portal.

An archive of the video and the printed materials available at the conference will be posted on the CARD homepage soon after the conference.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu

Ames, IA – The United States is the world’s largest producer, consumer, and exporter of ethanol. In 2019, the United States produced about 16 billion gallons of ethanol, about 45% more than Brazil, the world’s second-largest producer.

Consumer demand for gasoline is the largest factor in the demand for ethanol in the United States. Ethanol is typically sold to consumers combined with gasoline in blends of 10%, 15%, and 85%, which means that if gasoline demand falls, ethanol demand will fall along with it. This linkage is due to the blend wall—the maximum amount of ethanol the United States needs to mix with gasoline for domestic consumption.

“The blend wall is determined by vehicle technology,” said Jerome Dumortier, associate professor of economics at Indiana University-Purdue University Indianapolis. Dumortier said that vehicles that are model year 2001 or newer are capable of using up to 15% ethanol, but many older vehicles can only use 10% ethanol because a higher ethanol content can damage the engine. “This means that you cannot simply increase the ethanol content in gasoline without changing the vehicle fleet,” he said.

Dumortier is a co-author of a new study “Where does all the biofuel go? Fuel efficiency gains and its effects on global agricultural production,” with Miguel Carriquiry, professor of economics at Universidad de la República (Uruguay), and Amani Elobeid, adjunct associate professor of economics at Iowa State University and the Center for Agricultural and Rural Development. Their study examines a 30% drop in U.S. ethanol demand that the U.S. Energy Information Administration projects will occur by 2050 and how that reduction in demand will affect U.S. and global agricultural production. The U.S. EIA says the projected decline in U.S. gasoline consumption is mostly due to increased fuel efficiency and, to a lesser extent, a larger number of electric vehicles in the U.S. fleet.

Dumortier said that the United States would need policy changes if it wanted to counteract a potential large reduction in ethanol demand in the future. “The policy change right now would not be small—it would need to promote flex-fuel vehicles and the establishment of a nationwide network of gas stations that supply E85, which is common in the Midwest but not elsewhere,” he said.

If U.S. demand for gasoline falls by 30%, and ethanol demand falls accordingly, what will happen to all the biofuels the United States produces? “The ethanol produced will likely not be consumed in the United States, given the current projections,” Dumortier said. “There is a chance for exports, but the question is if other countries are counting on electric vehicles taking off,” he said.

Currently, almost 40% of the corn grown in the United State is used to produce biofuels, so a large change in ethanol consumption will have a noticeable impact on agricultural markets, which is what the study examines. The most notable changes found are a projected 3% drop in global corn planted area and a 6.3% drop in U.S. corn prices, the latter of which could lead to a reduction in farm income.

“We see that there is an almost 10% reduction in profits for corn farmers,” Dumortier said. He hypothesized that would lead to two different issues. “First, farmers who remain in agriculture will see lower profits,” he said. “Second, some farmers not in the Corn Belt will find it unprofitable to continue production and leave farming altogether.”

However, the study also finds benefits for consumers. “The price of corn affects costs of production of a variety of food products,” said Carriquiry. “Lower corn prices will lower feed costs and thus result in reducing the cost of production of meats, dairy products, and eggs. Lower corn prices will also put downward pressure on the prices of products directly based on corn and on other grains and oilseeds,” he said. “All things equal, lower energy prices are expected to further reduce costs of production and crop prices.”

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Amani Elobeid, 515-294-8122; amani@iastate.edu
Jerome Dumortier, Indiana University-Purdue University Indianapolis, 317-274-1817; jdumorti@iupui.edu
Miguel Carriquiry, Universidad de la República Oriental del Uruguay; mcarriquiry@iecon.ccee.edu.uy
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – A new grant will allow Iowa State University researchers to study how the COVID-19 pandemic has impacted the U.S. food supply chain with the goal of finding short- and long-term solutions to increase resiliency against future disruptions.

Keri Jacobs, an associate professor of economics at Iowa State, said that the pandemic led to major disruptions in a number of agricultural industries.

“These disruptions were unique because we didn’t experience a shock to the supply of agricultural products—it was largely a shock to our processing capacity through reduced labor,” she said. Jacobs noted that the lack of labor was especially problematic in agricultural industries, as the processing capacity and the entire system was built based on the known biological processes for products, like eggs, milk, beef, and pork.

Furthermore, as the pandemic first spread, restaurants, bars, and schools closed, quickly changing consumers’ food consumption habits and needs, which created further disruptions in the supply chain. “Plants couldn’t make the switch quickly enough to meet the change in demand and had inventory prepared for a market that no longer existed,” Jacobs said.

Consumers staying home en masse also drove down the need for gasoline, and therefore ethanol, which had consequences that fed back into food industries. “Carbon dioxide and distillers grains are by-products in ethanol production and are both important inputs in other supply chains,” Jacobs said. She noted that distillers grains are used to feed livestock, and carbon dioxide is a preservative and key input in packaged liquid products. “When ethanol demand tanked, so did the production of those two by-products. So, in this case, the disruptions seeped into other food processing sectors,” she said.

To help understand how and why COVID-19 disrupted the agricultural supply chain the ways it did, and to help prevent similar things from happening in the future, Jacobs will lead a newly-funded USDA study. The project, “Agricultural Supply Chain Disruptions: Costs and Mitigation Strategies to Enhance Resiliency of Ag Supply Chains” aims to enhance the resiliency of the beef, pork, dairy, and egg supply chains in the Midwest in the face of future disruptions and was recently awarded a two-year, $458,000 National Institute of Food and Agriculture COVID-19 Rapid Response Program grant. The grant is part of more than $14 million in USDA funding announced to help study the most critical issues facing consumers during the pandemic.

The project research team also includes five other Iowa State faculty: John Crespi, Chad Hart and Dermot Hayes, professors of economics; Bobby Martens, associate professor of supply chain management; and Lee Schulz, associate professor of economics.

“Our short-term focus is on developing data visualization tools and forensic price- and volume-based decision tools,” Jacobs said. The visualization tools will help agricultural producers and firms recognize and adapt to stressors in the supply chain system, such as future COVID-19 outbreaks. “We don’t know whether there will be another type of disruption similar to COVID-19, but the COVID-19 disruptions have the potential to flare up again this fall and winter or be compounded with flu season,” she said.

The long-term goal of the research is to explore the risk-return tradeoff in supply system changes to improve future resiliency during disruptions.

“We will, among other things, explore potential risk-mitigating strategies that firms in the beef, pork, egg, and dairy supply chains can use to reduce the impact of the current pandemic or future similar disruptions,” Jacobs said. “Fundamentally, this disruption made it very apparent where we can benefit from better information, and that is what our project aims to do—generate more informed and synthesized market information to aid supply chains.”

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Keri Jacobs, Center for Agricultural and Rural Development, 515-294-6780; kljacobs@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iatsate.edu

Ames, IA – China’s demand for U.S. corn is surging. And, according to researchers at Iowa State University’s Center for Agricultural and Rural Development, the U.S. is ready to meet that demand.

“The recent derecho caused a great deal of damage to Iowa's corn and soybeans, but total predicted national corn production for the 2020/21 marketing year is still the largest ever,” said Dermot Hayes, a professor of economics at Iowa State. “So, yes, the U.S. has the capability to deliver on China's record-setting demand,” he said.

China’s surging corn demand isn’t the only good news for U.S. farmers either. In May, Hayes, with Xi He and Wendong Zhang, authored a study that found China would import about $18.6 billion worth of U.S. agricultural products in 2020, which would ultimately fall short of phase one trade goals. Now, however, Hayes, He, and Zhang have updated the study, “China’s Agricultural Imports under the Phase One Deal: Is Success Possible?” with the most recently available data, and they now predict that China will import $21.63 billion in agricultural products from the United States in the first year of the phase one trade deal, an increase of nearly $3 billion from May’s prediction.

“Our prediction is still a little behind the $36.5 billion target, but recent market signals indicate that China has record demand for U.S. corn, poultry, and pork,” said Zhang.

China’s increased demand for U.S. corn and pork relates to an outbreak of African swine fever that started in 2018 and has decimated China’s hog inventory. “It's generally believed China has lost around 40%–60% of its hogs since 2018,” said He. “China's surging corn imports as of now are driven by its feed demand while it rebuilds its hog inventory.”

Zhang said it would take about two years for China to rebuild its hog inventory, but U.S. farmers don’t need to worry that China’s demand will slow down significantly after that. “China's national ethanol mandate was suspended earlier this year due to a lack of corn,” Zhang said. He also noted that China purchased large quantities of U.S. corn for ethanol production before the trade war. “If China continues developing its ethanol industry, the demand for U.S. corn will not slow down after its hog inventory is rebuilt,” Zhang said.

China’s increased need for U.S. corn may cause them to increase their corn tariff rate quota, according to Hayes. “Tariff rate quotas are policy instruments that give countries the option of restricting imports if they want,” Hayes said. Simply put, if China increases its corn tariff rate quota that means the U.S. can export more corn to China this year and China won’t impose extra tariffs on it. “China is very likely to exceed its tariff rate quota of 7.2 million metric tons this year,” Hayes said. “U.S. and Ukraine corn farmers will benefit most if China does decide to increase it,” he said.

U.S. soybean farmers are also starting to see increased demand from China, fitting what the researchers note is a seasonal pattern—U.S. agricultural product exports to China are higher from September to March. USDA daily export sales report shows new soybeans sales to China reached a minimum of 13.2 million metric tons for marketing year 2020/21 as of August 31.

China’s farmers are also currently dealing with production troubles that may further extend the need for U.S agricultural products. Since June, severe floods along the Yangtze River have wreaked havoc in China, severely affecting agricultural production in Chongqing, Hubei, Hunan, Anhui, Jiangxi, Jiangsu, and Zhejiang provinces. In 2019, these seven provinces produced just over half of China’s rice, as well as about one-third of its pork and vegetables.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Dermot Hayes, 515-294-6185; dhayes@iastate.edu
Xi He; xihe@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – Field trials led by Iowa State University scientists saved farmers and seed companies millions of dollars by helping them select soybean varieties resistant to a major pest, according to a new economic analysis.

The analysis was led by GianCarlo Moschini, Pioneer Chair in Science and Technology Policy in the ISU Department of Economics. The report found the Iowa State University SCN-Resistant Soybean Variety Trials have created a surplus of about $140 million in Iowa and Illinois between 2011 and 2016. The analysis estimates that farmers captured roughly a third of that surplus while seed companies held the rest.

The soybean cyst nematode, a microscopic roundworm that feeds on the roots of soybeans, is the greatest pathogen threat to U.S. soybean yields. Previous estimates showed the pests present in up to 70% of Iowa fields. Plant breeders have developed soybean varieties with genetic resistance to the pests, but the level of resistance and performance of these varieties can vary widely. So ISU scientists, supported by soybean checkoff funds from the Iowa Soybean Association, have conducted field trials every year since 1997 to evaluate hundreds of resistant soybean varieties. Annual reports of the results are published online at isuscntrials.info, and copies of the publications are printed and directly distributed annually to 70,000 to 90,000 households in Iowa and northern Illinois annually.

The economic analysis drew on data generated through the field trials as well as a proprietary dataset of farmers’ seed choices. That dataset included the quantity and price paid for seed of specific soybean varieties. Using economic models, Moschini and doctoral student Seungki Lee determined how willing farmers are to pay a premium for resistant soybean varieties compared to susceptible varieties.

“Our study essentially matched the data produced by the trials over the period from 2011 to 2016 with data about farmers’ specific use of soybean varieties over the same period,” Moschini said.

The analysis found that farmers were willing to pay an additional $0.75 per acre for seed of resistant varieties included in the field trials experiments. Farmers also paid an additional $1.36 per acre for seed of SCN-resistant soybean varieties that performed above the median in terms of yield in the ISU experiments.

The results indicate farmers used the field trial data to inform their decisions of what seeds to plant, said Gregory Tylka, interim associate chair in plant pathology and microbiology who leads the field trials.

“Some farmers think all resistant varieties are created equal, but they’re not, which is why we do the evaluation,” Tylka said. “The analysis shows the value of our research overall but also that farmers value the varieties that perform well in the yield tests.”

The full economic analysis, which was not supported by soybean checkoff funds, is available here.

Iowa State University News Service

Contacts:
GianCarlo Moschini, Center for Agricultural and Rural Development, 515-294-5761; moschini@iastate.edu
Gregory Tylka, Iowa Soybean Research Center, 515-294-3021; gltylka@iastate.edu
Fred Love, ISU News Service, 515-294-0704; fredlove@iastate.edu

Ames, IA – Iowa State University’s longest-running conference has been canceled for the year due to the ongoing COVID-19 pandemic. The 93rd Soil Management and Land Valuation Conference was originally scheduled for May; however, it was later postponed until August and has now been canceled altogether. This marks the first cancellation of this event since World War II.

“We had hoped a postponement would allow us to continue with the traditional conference at some point this year,” said Wendong Zhang. “But because of ongoing uncertainties and social distancing requirements posed by the pandemic, we’ve decided against it,” he said. Zhang is an assistant professor of economics at Iowa State and has been in charge of the SMLV conference since 2016.

“However, one conference tradition was not broken,” Zhang said. “Since the 1960s we’ve surveyed attendees about land value trends and crop prices. This year we sent the survey electronically and got a similar response rate to previous years.” Zhang said a detailed analysis of survey results will be available in a forthcoming Ag Decision Maker newsletter in July.

Estimated Iowa land values and commodity price forecasts from registered attendees of the 93rd Soil Valuation and Land Management Conference. A full analysis of results will be available in July

Nearly half of the survey respondents were agricultural lenders, according to Zhang. The remaining respondents were farm managers, realtors, brokers, and rural appraisers. “Our average survey respondent has twenty-six years of agricultural experience and provides services in nine counties—these are generally experienced agricultural professionals.”
The survey asked respondents to estimate land values and cash crop prices in their service area at four short-term points and two long-term points. The results generally show that experts are forecasting a modest decline in farmland values over the next eighteen months, but feel generally optimistic about future values. They also anticipate a slight increase in corn and soybean cash prices.

“Overall, survey results show respondents forecast a decline in land values of just over 2% from May to November 2020. They further extend that to an additional decline in land values of just over 1% from May 2020 to November 2021,” Zhang said. However, as the timeline of the estimates increased, respondents provided increasingly positive outlooks. “Nearly 40% of respondents expect higher land values eighteen months from now,” Zhang said. Additionally, the survey results show professionals expect a 10% increase in land values from 2020 to 2025 and a 45% increase from 2020 to 2040.

“Respondents cited lower interest rates, good crop yields and strong demand amid tight land supply as main factors driving up land values,” Zhang said. “Some of our other recent research supports the role of lowered interest rates in land values. It appears the 2020 rate cut will dominate the interest rate impact for the foreseeable future; and, beginning in 2021, the net effects of interest rate changes on farmland values will become positive.”

As for corn and soybean cash prices, the survey shows experts are predicting prices at $3.05/bushel and $8.21/bushel, respectively, this November. Furthermore, they’re expecting those prices to increase slightly to $3.57/bushel and $9.05/bushel, respectively, two years from now, which, Zhang said, may reflect respondents anticipating improvements in soybean trade with China.

The next annual Soil Management and Land Valuation Conference is set for May 12, 2021.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Wendong Zhang, 515-294-2536; wdzhang@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – As restaurants across the U.S. have started re-opening their dining rooms for service, they’re now facing another consequence of the COVID-19 pandemic—huge numbers of employees are seeking employment in other industries or leaving the workforce altogether.

“Labor supply has decreased at least somewhat in every industry because some workers may get sick or they may leave the labor market to take care of children displaced from school, etc.” said John Winters, an associate professor of economics at Iowa State University. “While it was expected, closures and reduced consumer demand severely impacted restaurant industry employment—it lost roughly five million jobs from April 2019 to April 2020.”

Winters is an author of a new Iowa State study, “COVID-19 Employment Status Impacts on Food Sector Workers,” along with Seung Jin Cho and Jun Yeong Lee, both Ph.D. students in Iowa State’s Department of Economics.

The purpose of their study, however, wasn’t to find the overall number of jobs lost in each sector, it was to examine current trends in same-industry employment. That is, they wanted to look at whether food-sector workers are leaving their current jobs for employment in different industries, or possibly just leaving the workforce altogether.

“Prior to the coronavirus pandemic, typically more than 80% of workers continued employment in the same industry, but we’re definitely seeing those numbers go down in some food-related sectors,” Winters said. “In April 2019, just over 83% of previous restaurant workers were still employed in the restaurant industry. In April 2020, only about 43% of previous restaurant workers were employed at work in the restaurant industry, which is a significant drop.”

The study also examined same-industry employment in food manufacturing, grocery stores, and crop and animal production. While the restaurant industry was hardest hit by workers leaving the industry altogether, the food manufacturing and grocery store industries are seeing the same trend.

“Between April 2019 and April 2020, the number of previous workers still employed in food manufacturing decreased by about eleven percentage points and the number of previous workers still employed in grocery stores decreased by just over seven percentage points,” Winters said.

Unlike restaurants, the loss in grocery store employees isn’t due to decreased labor demand. “Labor demand in the grocery store industry has remained strong,” Winters said. “When previous grocery store workers exit the labor force it is very unlikely to be because of reduced labor demand. We also looked at hiring of new workers not previously employed in food manufacturing and grocery stores and didn’t find significant evidence of increased hiring, which suggests these industries may struggle to build and retain an effective workforce,” he said.

Winters said it’s very difficult to disentangle the various motives that lead to a reduced labor supply, but their data showed some expected general trends, such as older workers, less-educated workers, and women with children being more likely to leave the workforce. “Eligibility for unemployment insurance, including expanded benefits from the CARES Act, also reduced labor supply,” he said.

Ultimately, the COVID-19 pandemic seems to be driving laborers away from certain industries and high-infection areas. “Workers have not only left their previous industry, but also decided not to look for work in areas with high COVID-19 infection rates,” Winters said.

The only U.S. food sectors examined in the study that didn’t show a reduction in same-industry employment were crop and animal production. However, Winters said that it’s possible that things may look different for those industries in the next few months as the U.S. continues through the primary growing season and fall harvest approaches.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
John Winters, 515-294-6263; winters1@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

Ames, IA – On January 15, the U.S. and China signed a partial trade agreement—the phase one deal—to reduce the economic pressures of the trade war that started in 2018. In the first quarter of 2020, progress on the deal has been slow due to the COVID-19 pandemic, which has slowed global demand and disrupted trade, and due to China diversifying away from U.S. agricultural imports because of the trade war.

However, a new study from the Center for Agricultural and Rural Development (CARD) at Iowa State University, “China’s Agricultural Imports under the Phase One Deal: Is Success Possible?,” finds that China is working in earnest to meet trade targets, and that current market forces and price differences for key commodities might allow it to meet trade obligations.

Based on first quarter exports and the usual seasonal patterns of corn and soybean trade, the study predicts China will import $18.6 billion in U.S. agricultural and related products in 2020. The trade target amount is $36.5 billion, which means that if China is to meet the goal, it will have to increase its U.S. imports later this year.

Historically, China increases its U.S. agricultural imports after corn and soybeans are harvested in the fall, but there are some market signs they are increasing imports now, possibly to help hit upcoming trade goals.

“Over the past few weeks there was an out-of-season uptick in corn and soybean export sales, which suggests that China is trying to make its target,” said Dermot Hayes, a professor of economics at Iowa State and a co-author of the study. Wendong Zhang, an assistant professor of economics at Iowa State, and Xi He, a postdoctoral researcher at CARD, both authored the study with Hayes.

“This cautious optimism is supported by large price differences between key commodities in the U.S. and China documented in the report, as well as China’s recent decision to rebuild national inventories of corn and soybeans,” Hayes said.

China has decided to add 20 million tons of corn to its national inventory, but projections show domestic production falling short of consumption by 15 million tons this year, so it’s likely that China will import more than its 7.2 million ton annual import quota. That could be really good news for the U.S., as the U.S. and Ukraine are the only large exporters eligible to send corn to China.

The uptick in soybean sales is good news for U.S. farmers as well. In recent years, Brazil has accounted for an increasing share of China’s soybean imports. “Brazil’s projected soybean production in 2019/20 was more than 122 million metric tons, up from 115 million tons in 2018/19,” said Zhang. “U.S. market analysts are especially worried, as Brazil sent record monthly soybean exports to China in April and the peak season for U.S. soybean exports won’t start until close to fall harvest.”

On the other hand, a recent surge in COVID-19 cases in Brazil and trade disruptions due to flooding have caused Chinese traders to consider U.S. corn and soybeans at a time they would normally turn to Brazil.

U.S. pork producers have already seen China accepting a record amount of imports in 2020. “From January to April, China imported a record-level 291,609 metric tons of U.S. pork, which is 300% higher than the amount it imported from January to April in 2017,” Zhang said.

Zhang says that the EU’s projected pork production will increase slightly in 2020, but China’s import demand for pork is surging and they will very likely purchase record amounts of U.S. pork. China’s willingness to buy more U.S. pork goes beyond the trade agreement—its domestic producers have been forced to cull tens of millions of pigs due to African swine fever, a highly virulent and deadly pig disease.

“ASF cases are much lower now, but there is no vaccine yet,” Hayes said. “ASF risks are disproportionately higher for small-scale farms that lack strong biosecurity measures, and ‘backyard’ production accounts for about 20% of China’s pork production.”

The trade deal further increases China’s obligations for U.S. agricultural products to $43.5 billion in 2021. Zhang said the COVID-19 pandemic has brought global trade levels down significantly in 2020, but regardless of what happens with the pandemic, they will be extending their study into 2021 trade. “We didn’t examine the 2021 outlook because the phase two deal terms could possibly change following the November elections. However, as of right now, the 2021 targets will be challenging for China to meet,” he said.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Wendong Zhang, Center for Agricultural and Rural Development, 515-294-2536; wdzhang@iastate.edu
Dermot Hayes, Center for Agricultural and Rural Development, 515-294-6185; dhayes@iastate.edu
Xi He, Center for Agricultural and Rural Development; xihe@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – Tracking COVID-19’s economic impacts, especially in the state of Iowa, is now possible thanks to resources on a new web hub.

The webpage, “COVID-19 Pandemic: Research and Resources,” developed by the Center for Agricultural and Rural Development and the Department of Economics at Iowa State University, examines the pandemic’s impacts on the economy, agriculture and business across local, regional and global economies.

“Right now, you can track unemployment. You can see changes in Iowans’ mobility by county since the lockdown began and track changes in their movement patterns as the lockdown lifts. You can see economists answering questions from Iowans who have real concerns about their businesses, and more,” said CARD Director John Crespi, who led the creation of the web hub with Department of Economics Chair Joshua Rosenbloom, as well as both units’ staff and researchers.

The hub includes graphs, tables and maps visually representing the scale and extent of the pandemic's impact and features related press releases and publications, such as “The Impact of COVID-19 on Iowa’s Corn, Soybean, Ethanol, Pork, and Beef Sector” released in April. It also offers an interactive tool to estimate total losses to Iowa’s corn, soybean and ethanol markets due to COVID-19.

“I think it is a very good start to an important project,” Rosenbloom said. “It offers resources that can help producers, businesses and policymakers make informed decisions now and plan for the future during this unprecedented time in our history.”

The web hub’s hot topics include Wendong Zhang and Nick Paulsen’s presentation on COVID-19’s impact on US-China trade. Zhang is an Iowa State assistant professor and Extension economist, and Paulsen is a University of Illinois associate professor of agricultural and consumer economics.

The site also shares relevant queries from Iowans who contact the Department of Economics’ Ask an Economist service. Current questions examine beef prices, the potential devaluation of the dollar, and how to start a pandemic-related business.

“Keep checking back to see what’s new,” Crespi said. “We plan to continue adding resources in upcoming weeks and expect weekly updates to corn, soybean, ethanol, pork and beef markets that will automatically adjust as new data become available.”

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
John Crespi, Center for Agricultural and Rural Development, 515-294-1699; jcrespi@iastate.edu
Joshua Rosenbloom, 515-294-1257; jlrosenb@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iastate.edu

Ames, IA – As the COVID-19 outbreak has quickly spread across the globe, it has infected more than three million people and killed over 218,000, as of the time of writing. Worldwide, governments have taken steps to reduce COVID-19’s spread, including mandating social distancing policies and closing nonessential businesses. These policies slow the spread, but they restrict economic output and demand.

To help understand the economic impact of the outbreak, and the policies used to stop its spread, on China’s economy, researchers at the Center for Agricultural and Rural Development (CARD) at Iowa State University have created a database that shows how impacts propagated across China’s provinces and economic sectors, both during the outbreak and when most of China began returning to work.

China was the first country to confirm a case of COVID-19, and one of the first countries to implement social distancing and lockdown policies to contain its spread. Economic researchers have kept a close eye on China, as it is not only the world’s most populous country, but the world’s second-largest economy, based on nominal gross domestic product. According to the International Monetary Fund, China's 2019 GDP was $14.14 trillion.

“We wanted to understand the impact of COVID-19 on China's economy, and how that impact transmits to other countries through economic and political links,” said Wendong Zhang. Zhang is an associate professor of economics at Iowa State and one of the researchers that created the database.

“Researchers and the general public can use it to explore COVID-19’s impact on China at the national and province level—we found, cleaned, and translated provincial sector-level data that is not easy to find in the national-level data releases,” Zhang said. “As a result, our database is valuable to the research community in quantitative trade and macroeconomic modeling—for example, our database is also aggregated to GTAP-sectors.”

“Due to data limitations, we don't have full coverage for all 900 province-sector combinations—we currently have province by sector-level information for around half of China’s provinces, and we do not provide commodity-specific information for the agricultural sector,” Zhang said.

However, Zhang said the database was constructed from a comprehensive dataset from various sources and shows a basic idea of COVID-19’s initial impacts on China's economy, and researchers can also use it to investigate how the economic shocks affect other countries through economic linkages.

Zhang said the database will be updated monthly, and, in the future, the researchers hope to expand it to increase its coverage to increase usability. The database is available in both English and Chinese.

Other researchers involved in the project include Tao Xiong, a visiting scholar at the Center for China-US Agricultural Economics and Policy at CARD and a professor at Huazhong Agricultural University, and Xi He, a postdoctoral research associate at CARD. The researchers welcome feedback and suggestions.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
Wendong Zhang, Center for Agricultural and Rural Development, 515-294-2536; wdzhang@iastate.edu
Xi He, Center for Agricultural and Rural Development; xihe@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – A new study by the Center for Agricultural and Rural Development at Iowa State University projects economic impacts of the COVID-19 outbreak will mean steep losses for Iowa agriculture, including over $2 billion each for the hog and ethanol sectors, if the disease and social distancing policy impacts hold throughout the year.

As the COVID-19 outbreak lingers, 52 U.S. states and territories are either encouraging or mandating social distancing policies, which often include closings of nonessential businesses. While these policies are necessary to slow the spread of the virus and ensure human safety, they restrict economic output and demand.

The new CARD analysis, “The Impact of COVID-19 on Iowa’s Corn, Soybean, Ethanol, Pork, and Beef Sectors,” shows potential losses in every examined agricultural sector. The study finds potential damage of $34 million for calves and feeder cattle, $213 million for soybean, $658 million for fed cattle, $788 million for corn, $2.1 billion for hogs and over $2.5 billion for ethanol.

“While some of this damage has already been realized, the majority of the impact comes from the continued slowdown of the general economy and the pricing, processing and distribution of future commodities,” according to John Crespi, CARD’s director and an author of the study. “To estimate potential losses in agricultural revenues, we examine the price reactions of various agricultural markets during the pandemic and explore the revenue losses indicated by those price movements.”

The ethanol and hog industries are likely to be especially hard-hit.

“The ethanol industry, in fact, the entire fuel industry, was already in poor economic shape before the COVID-19 outbreak—energy supplies were high, stocks were building, usage was stagnant, and input costs had been rising before the outbreak, squeezing already tight margins,” said Chad Hart, an associate professor of economics and a study co-author. “On top of that, OPEC+ countries (mainly Saudi Arabia and Russia) quarreled about oil supply levels during the first quarter of 2020, which sent energy supplies higher and prices lower. And now, social distancing restrictions are severely limiting fuel consumption,” Hart said.

Ethanol plants are also currently facing a unique situation, in that the plant closures are not due to employee illnesses. “No ethanol plants have noted worker availability problems due to the virus—economic returns are driving the closures,” Hart said.
Other plant closures are being driven by employee shortages, Hart said. “Plants are closing for a variety of reasons, but for meat processing facilities, the virus outbreaks seem to be the main cause, as it limits the number of workers available,” Hart said.

“The COVID-19 outbreak is presenting an unprecedented situation in the way plants are handling employment changes,” Crespi said. “During this economic interruption, as opposed to the financial crisis of 2008, for example, firms are not cutting employees the same ways as before. While unemployment is very high—it has not been this high since the 1930s—some firms are treating this as a temporary change and are keeping employees on half-time or other pay rates,” he said.

It is difficult to predict when an economic recovery will come, or what exactly it will look like, Crespi said. “There is so much uncertainty right now. Many people expect jobs to come back once the pandemic subsides, but no one can predict when or how that will work. A breakthrough on a vaccine, for example, could change the outlook very quickly.”

Other co-authors of the report are Dermot J. Hayes, professor of economics, Keri L. Jacobs, associate professor of economics, and Lee L. Schulz, associate professor of economics. All authors are also affiliated with CARD.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
John Crespi, Center for Agricultural and Rural Development; 515-294-1699; jcrespi@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development; 515-294-3809; nmcook@iastate.edu

AMES, Iowa – John Crespi has been named director of the Center for Agricultural and Rural Development at Iowa State University.

Crespi, a professor of economics, joined the faculty of Iowa State in 2015 and has served as the interim director of CARD since September 2018.

“I see this as an opportunity to be surrounded by research that I’m interested in,” he said. “CARD is a fantastic research center with some of the smartest people working in food, agricultural and environmental policy, combined with a really gifted staff. I can see why the work people do here has always had an impact on policy.”

Crespi’s past research focused on food marketing and business competitiveness. Some of his recent work at CARD examines the long-run impacts of the 2003 bovine spongiform encephalopathy outbreak in the United States and the vertical coordination of livestock markets. He is also one of the authors of “The Impact of the 2018 Trade Disruptions on the Iowa Economy,” an award-winning research paper that was the first to quantify the effects of the US-China trade war on Iowa’s economy.

Crespi said it’s difficult to guess what research challenges CARD will face in the future, but he has faith that it’s innovative, creative researchers will be up to the challenges ahead.

“CARD has a mission to conduct innovative research on local, regional, and global agricultural issues. That won’t change. Five years ago we weren’t expecting a trade war, but it happened, and CARD responded with some excellent research. Climate change is bringing challenges to agriculture; water policy will continue to need good, independent research; and knowing how farm policies translate into things like crop insurance, land values and SNAP benefits are issues that CARD has always examined, and we will continue to do that. You never know what issues you will get called about tomorrow.”

Crespi has bachelor’s degrees in English and economics from California State University, Sacramento; a master’s degree in economics from Colorado State University; and a doctorate in agricultural and resource economics from the University of California, Davis. Prior to joining Iowa State, he was a professor of agricultural economics at Kansas State University.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

Contacts:
John Crespi; 515-294-1699; jcrespi@iastate.edu
Nathan Cook, Communications, 515-294-3809; nmcook@iastate.edu

AMES, Iowa – Dense urban areas use up more energy, water and food resources than they can produce themselves, forcing them to rely on external sources. But a team of researchers is imagining bold new ways to make Midwestern cities more self-reliant.

The Sustainable Cities Research Team recently received a $2.5 million grant from the National Science Foundation to develop a framework for analysis of food, energy and water systems for greater Des Moines, which includes the city and the surrounding six-county area, and to formulate scenarios that could result in a more sustainable city. The team includes scientists from a wide range of disciplines at Iowa State University, the University of Northern Iowa and University of Texas at Arlington.

The group intends for its results to inform decisions about food production, energy use, environmental outcomes and related policies that would apply to a large number of cities in rain-fed climates similar to Des Moines. Their innovative approach could help cities conserve building and transportation energy, reduce environmental impacts and improve city sustainability.

“Urban areas use a disproportionate amount of resources that have to come from far away, and they also tend to produce a disproportionate amount of waste,” said Jan Thompson, Morrill Professor of natural resource ecology and management and principal investigator for the grant. “Our team is going to look at ways we can make food, energy and water systems more sustainable.”

‘Holistic’ approach to urban sustainability

The project will compile and analyze large quantities of data on current and future climate conditions, food production, energy use and associated environmental impacts in Des Moines and the surrounding area. An effort led by Nick Schwab, an associate professor of psychology at Northern Iowa, will conduct focus groups and surveys to gather input from a wide range of additional stakeholders, including consumers, farmers and business owners who produce, distribute and sell food in the area. The team is also working with a group of community leaders and members of local organizations who will serve as an advisory board to the investigators.

Team member Baskar Ganapathysubramanian, professor of mechanical engineering at Iowa State, will lead efforts to run complex computer simulations for scenarios in which more food is produced locally in order to forecast environmental, nutritional and economic impacts for each scenario. The project will take a “holistic” approach to urban sustainability that will “account for a range of systems and how they interact with one another,” said Ulrike Passe, an associate professor of architecture and project coordinator for the research team.

“A city has complex problems with many factors and sources, so we need complex models to provide some clarity,” Passe said. “These systems are all connected.”

Given current and future urban climate conditions/scenarios researchers will analyze the potential for increased urban agriculture, community gardens and other green space within city limits. Passe said such approaches can contribute to urban food security as well as improve energy efficiency in urban buildings. Strategically placed plants near buildings can provide shade and help dissipate heat, thus reducing energy use for cooling and at the same time diminishing the severity of flooding in the area.

“What if we could turn vacant lots into gardens and orchards?” Passe asked.

The research team will identify opportunities and challenges related to making Des Moines, and similarly sized cities in rain-fed Midwestern landscapes, more sustainable. For instance, asking farmers what they would need to consider for producing locally sourced fruits, vegetables and meat will likely uncover potential concerns about equipment purchases and profitable marketing opportunities, said Matt Liebman, Henry A. Wallace Endowed Chair for Sustainable Agriculture and professor of agronomy. All those considerations will factor into the team’s work, Liebman said.

Sustainable Cities Research Team Members
Michael Dorneich, ISU associate professor of industrial and manufacturing systems engineering
Baskar Ganapathysubramanian, ISU professor of mechanical engineering
Philip Gassman, associate scientist at ISU Center for Agricultural and Rural Development
Caroline Krejci, assistant professor of industrial engineering, University of Texas at Arlington
Matt Liebman, ISU professor of agronomy
Mary Losch, professor of psychology, University of Northern Iowa
Ajay Nair, ISU associate professor of horticulture
Ulrike Passe, ISU associate professor of architecture
Kurt Rosentrater, ISU associate professor of agricultural and biosystems engineering
Nick Schwab, associate professor of psychology, University of Northern Iowa
Jan Thompson, ISU professor of natural resource ecology and management
Yuyu Zhou, ISU associate professor of geological and atmospheric sciences

Contacts:
Jan Thompson, Natural Resource Ecology and Management, 515-294-0024; jrrt@iastate.edu
Ulrike Passe, Architecture, 515-294-7142; upasse@iastate.edu
Matt Liebman, Agronomy, 515-294-7486; mliebman@iastate.edu
Fred Love, News Service, 515-294-0704; fredlove@iastate.edu

A survey of Iowa landowners conducted by Iowa State University suggests that adoption of conservation practices has increased slightly since 2012, and that ongoing trends in land ownership and management are likely barriers to a number of conservation practices.

However, some of these same barriers may contribute to increased use of no-till management on cropland, researchers found.

The The Iowa Farmland Ownership and Tenure Survey has been conducted by Iowa State for more than 70 years. The current survey uses a statistically representative sample of Iowa farm landowners that provides a long-term perspective on many aspects of Iowa land ownership, land tenure and characteristics of landowners, including age, gender and education. It included questions about conservation practices and use of services from cooperatives. Funders included the Iowa Nutrient Research Center, the Leopold Center for Sustainable Agriculture and the CoBank Fund for Excellence in Cooperative Economics.

“We focused on conservation practices credited in the Iowa Nutrient Reduction Strategy as having good potential to reduce nutrient loss, and that are also more popular and familiar to landowners: no-till, cover crops, buffer strips and ponds or sediment basins,” said Wendong Zhang, assistant professor of economics, a co-author of the study, along with Alejandro Plastina, assistant professor in economics, and Wendiam Sawadgo, economics graduate student.

“We know that land tenure affects conservation adoption,” said Zhang, “but not always as expected. For example, 82 percent of farmland was owned debt-free in 2017 — up from 78 percent in 2012 and 62 percent in 1982. But this did not seem to translate to more conservation.”

Gender did not appear to be a factor in conservation program participation or adoption.

“There is a perception that women are more likely to support conservation,” said Plastina, “but we found men had somewhat more land in government conservation programs.”

Iowa farmland owners continue to grow older, said Zhang. Sixty percent of farmland is owned by people 65 years or older and 35 percent is owned by people 75 or older.

“Aging landowners are related to the increasing amount of land in larger tracts, shorter-term leases or cash rental arrangements, and land operated by farm management companies for out-of-state landowners, all of which tend to be associated with lower investment in conservation,” said Zhang.

“On the other hand,” he said, “older farmers participate more heavily in government conservation programs, including the Conservation Reserve Program.” The survey found that landowners 65 years old or older account for two-thirds of the acres in conservation programs.

Based on the survey, cover crops are being grown on approximately 4 percent of Iowa farmland. As with all conservation practices, adoption varied widely across the state, ranging from about 1 percent in the northwest crop reporting district to 12 percent in the southwest. The overall rate represents an increase from 2012 levels, based on estimates in the 2017 USDA National Ag Census. Survey respondents indicated their primary reasons for not growing cover crops were that it was the tenant’s decision, cover crops are too costly to terminate, they require too much labor and time, or the season is too short.

“It is encouraging that landowners indicated strong to moderate interest in increasing cover crop use over the next five years on nearly 60 percent of Iowa cropland,” said Zhang. “Also, about 20 percent expressed willingness to pay a portion of the costs to encourage tenants to plant cover crops.”

Survey respondents indicated that no-till management is used on 31 percent of Iowa cropland acres, up from USDA estimates of 27 percent in 2012.

“We find evidence that the conventional wisdom that adoption is lower on rented land only applies to the use of cover crops, buffer strips, and sediment basins, but not no-till,” said Zhang. “We found that cover crops are used on 4.8 percent of farmland operated by the landowner, but only 3.6 percent of rented-out farmland. In contrast, our results show the adoption rate of no-till is higher on leased-out land than on owner-operated land.”

No-till is also more popular with younger farmers. The survey found almost 70 percent of farmers 35 and younger used no-till, compared with 26 percent of farmers aged 65 to 80.

Researchers found that conservation buffers and ponds or sediment basins for erosion management are used on only about 3 percent and 2 percent of Iowa farm acreage, respectively, and few farmers had land in other types of conservation arrangements, such as easements or private conservation programs. Participation in the long-term Conservation Reserve Program increased to 7 percent from 6 percent in 2012 -- levels that do not directly indicate landowner interest, since federal policy limits acreage that can be enrolled.

“Overall, our survey suggests there is a need to find new incentives that can more effectively encourage Iowa landowners to increase stewardship-oriented practices,” said Plastina.

Researchers asked several questions to gain insights into policy options that could entice Iowa landowners to adopt conservation measures. Tax credits or deductions for implementing conservation practices were of greatest interest — 24 percent of landowners said this would make them very likely to enroll more land in conservation programs. About 11 percent would be more interested if land was excluded from property value for estate tax purposes. Others said they would consider it if tax-free cost-share assistance was available.

In other research supported by the Iowa Nutrient Research Center, Zhang and Plastina are studying the potential for other incentives that might encourage conservation, such as reverse auctions and monetizing improvements in soil health.

“We also need to continue researching ways to refine conservation practices to make them more compatible with farming operations and increase farmers’ perceptions that they can be successful and cost-effective,” said Plastina.

Since 1989, the Iowa Farmland Ownership and Tenure Survey has been conducted every five years, as mandated by the Iowa Code. The latest survey, by the ISU Center for Survey Statistics and Methodology in cooperation with the Center for Agricultural and Rural Development, was conducted via telephone interviews that took place between October 2017 and February 2018. The response rate was 68 percent.

In contrast to a number of studies that focus only on producers, this research provides a statistically representative examination of conservation practice adoption by both operator and non-operator landowners. Detailed analysis of the survey’s findings on conservation practices were shared with the Federal Reserve Bank of Chicago in late November and will be highlighted in an upcoming article in the “Journal of Soil and Water Conservation.”

The Center for Agricultural and Rural Development is a center within the College of Agriculture and Life Sciences at Iowa State University. For 60 years, it has conducted innovative public policy and economic research on local, regional and global agricultural issues. Its key focus areas are biorenewables, resources and the environment, food and nutrition, agricultural risk management, science and technology, and trade and agriculture.

The Iowa Nutrient Research Center was established by the Iowa Board of Regents in response to legislation passed by the Iowa Legislature in 2013. The center pursues science-based approaches to areas that include evaluating the performance of current and emerging nutrient management practices and providing recommendations on implementing the practices and developing new practices. Iowa State University leads the partnership that includes the University of Iowa and the University of Northern Iowa. Since its inception, the center has supported more than 92 projects.

Contacts:
Wendong Zhang; wdzhang@iastate.edu
Alejandro Plastina; plastina@iastate.edu
Ann Y. Robinson; ayr@iastate.edu

Iowa’s farmland now valued at $7,432 per acre, an increase of $168 from 2018

Ames, Iowa—It’s been a difficult year for farmers—the planting season saw an overabundance of rain and delayed planting, the United States’ trade war with China persisted, skewing both commodity prices and demand, and farm bankruptcies rose to the highest level since 2011. However, favorable interest rates, strong yields, and limited land supply combined to help drive Iowa’s farmland values up for only the second time in six years.

The statewide value of an acre of farmland is now estimated to be $7,432, which represents an increase of 2.3 percent, or $168, since 2018. The $7,432 per acre estimate, and 2.3 percent increase in value, represents a statewide average of low-, medium-, and high-quality farmland.

“The reprieve in the land market, unfortunately, is not driven by a much stronger farm economy,” said Dr. Wendong Zhang. Zhang is an assistant professor of economics at Iowa State University and is responsible for leading the annual Iowa Land Value Survey. “This recent modest increase in land values reflects a lower interest rate environment and slowly improving US farm income. However, we are still faced with significant uncertainty, especially the ongoing US-China trade war, which has significantly affected US agricultural exports, especially soybean exports, and lead to lower commodity prices and weaker farm income,” Zhang said. Stronger than expected crop yields in Iowa, and continuing limited land supply helped contribute to the increase in land values, despite low commodity prices.

While the growth in land values is a positive, Zhang warned that it should not be labeled as a “solid rebound” of the land market. “The Market Facilitation Program payments helped soften the blow and stabilize farm income and the land market; however, a no-deal or further escalation of the US-China trade war on December 15 will further amplify trade uncertainties and put downward pressure on farm income and land values,” Zhang said. “The future of farmland market still hinges on the pace and speed of Federal Reserve moves on interest rates, progress in the trade talks, and the availability of land parcels.”

The United States also saw 580 farm bankruptcies in 2019, the highest number since 2011. However, Zhang said that the overall share of bankrupt farms is still low, “but there are more farms under financial stress due to continued low commodity prices.”

Zhang said the growth in Iowa’s land values was noticeably higher this year in the central crop reporting districts (district hereafter). “The Central districts saw larger increases than other districts due in part to stronger-than-expected crop yields over the past few years and strong urban demand.” He also noted that “strong recreational demand” has helped lift the value of low-quality land.

Land Values by County

Eighty-two of Iowa’s 99 counties reported higher land values, the remaining 17 all saw a decline. For the seventh consecutive year, Scott and Decatur counties reported the highest and lowest values, respectively. Decatur County reported a value of $3,586 per acre, a gain of $97, or 2.8 percent. Scott County reported a value of $10,837 per acre, a gain of $300, or 2.8 percent.

Both Boone and Story Counties reported the largest percent increase at 5.4 percent. Story County also saw the largest dollar increase by county at $455 per acre. Clayton and Allamakee Counties reported the largest percent decrease—both showed a 2.2 percent loss since 2018. Clayton County reported the largest dollar decrease in values at $151 per acre.

Land Values by District

The Northwest district reported the highest overall land values at $9,352 per acre, and the South Central district reported the lowest overall land values at $4,487 per acre.
Land values across districts saw an increase in general, with only the Northeast district reporting a decline in land values (a loss of 2.9 percent). The losses in the Northeast district are due mainly to financial stress in the dairy sector.

The largest percentage increases were in the East Central and Central districts at 5.9 percent and 5.5 percent, respectively. However, the South Central and Southeast districts also reported substantial increases at 3.6 percent and 3.8 percent, respectively.

Land Value by Quality

Low-quality land statewide now averages $4,759 per acre, a 3.3 percent, or $150 per acre, increase; medium-quality land now averages $6,938 per acre, an increase of 2.0 percent, or $133 per acre; and, high-quality land now averages $9,078 per acre, an increase of 2.4 percent or $215 per acre.
Low-quality land in the Central, East Central, and West Central districts all saw increases of 5.0 percent or more, but low-quality land in the Northeast district was a 5.0 percent decline.

All qualities of land in the Northeast district reported a loss, while low-quality land there saw a greater loss than did higher quality lands. High-quality land in the Northwest district is the only other high-quality land that saw a decline in value.

Factors Influencing Land Values

Favorable interest rates, strong yields, and limited land supply were the most frequently noted positive factors influencing land values. The most commonly cited negative factors influencing land values were lower commodity prices, the weather, and tariffs on agricultural commodities.

Land values were determined by the 2019 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development (CARD) at Iowa State University and Iowa State University Extension and Outreach. Results from the survey are consistent with results by the Federal Reserve Bank of Chicago, the Realtors Land Institute, and the US Department of Agriculture.

The ISU land value survey was initiated in 1941, the first in the nation, and is sponsored annually by Iowa State University. The survey is typically conducted every November and the results are released mid-December. Only the state average and the district averages are based directly on the ISU survey data. The county estimates are derived using a procedure that combines the ISU survey results with data from the US Census of Agriculture.

The ISU Land Value Survey is based on reports by agricultural professionals knowledgeable of land market conditions such as appraisers, farm managers, agricultural lenders, and actual land sales. It is intended to provide information on general land value trends, geographical land price relationships, and factors influencing the Iowa land market. The 2019 survey is based on 679 usable responses from 553 agricultural professionals. Fifty-nine percent of the 553 respondents answered the survey online.
CARD offers a web portal at that includes visualization tools, such as charts and interactive county maps, allowing users to examine land value trends over time at the county, district, and state level.

Contacts:
Wendong Zhang; wdzhang@iastate.edu
Nathan Cook; nmcook@iastate.edu

AMES--A news conference will be held at 10:00 a.m. on Wednesday, December 11 to announce the results of the 2019 Iowa Land Value Survey conducted by the Center for Agricultural and Rural Development at Iowa State University and Iowa State University Extension and Outreach. This year’s conference will take place in the Horton Room of the ISU Alumni Center, located on the ISU campus in Ames.

For those who can’t attend the conference, a livestream will be available on YouTube at http://bit.ly/LandResults2019.

Wendong Zhang, an assistant professor of economics and farm management specialist, will head the news conference and announce the 2019 findings. Printed materials will be provided at the conference, including Iowa land value data from 1950 to present, current land value data from all 99 counties, and a press release summarizing the 2019 results. Dr. Zhang will make himself available to reporters for follow-up questions or one-on-one interviews immediately following the presentation of results.

The ISU Land Value Survey is currently ongoing, if you are an agricultural professional knowledgeable about the farmland market who hasn’t participated in this year’s survey, you can participate in the ISU Land Value Survey online by December 1 at http://bit.ly/landvalue2019. If you have questions regarding the survey please contact Dr. Wendong Zhang at wdzhang@iastate.edu or call 515-294-2536. You can also see the land value trends at the county, district, and state level since 1950 at the interactive Iowa Farmland Value Portal at https://www.card.iastate.edu/farmland/.

An archive of the video and the printed materials available at the conference will be posted on the CARD homepage at https://www.card.iastate.edu soon after the conference.

Contacts:
Wendong Zhang; wdzhang@iastate.edu

Ames, IA—Researchers at the Center for Agricultural and Rural Development at Iowa State University have created a new online tool to help Corn Belt farmers predict corn crop yields, harvested acreage, and total production. The PSI-CARD Corn Yield Prediction Project provides county-level predictions for South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Illinois, Michigan, Indiana, and Ohio.

The daily corn yield predictions are calculated using a deep machine learning method, known as Long Short-Term Memory, which provides a high level of accuracy to predicted corn yields. The model provides predictions that are only .83 bushels per acre lower than actual yields, making it more accurate than the corresponding USDA predictions. Overall, about 80% of the county-level predictions fall within 20 bushels per acre of actual yields. “In four years of out-of-sample testing, the model proved capable of giving accurate yield predictions at the Corn Belt level,” said Dermot Hayes, a professor of economics and one of the lead researchers on the project. “These yield predictions should prove valuable to anyone with a financial stake in national yields, including farmers and anyone trading corn futures,” Hayes said.

The project also includes a harvested acreage map, which uses USDA information to predict the difference in harvested acreage between the previous and current harvest years, and a total production map, which estimates the current year’s total corn production at the county level.

The PSI-CARD Corn Yield Prediction Project is free to use and available online at http://bit.ly/CARDCornYield.

The PSI-CARD Corn Yield Prediction Project was created in cooperation with the Plant Sciences Institute at Iowa State University (https://www.psi.iastate.edu/).

About the Center for Agricultural and Rural Development
For 60 years, the Center for Agricultural and Rural Development (CARD) at Iowa State University has conducted innovative public policy and economic research on agricultural, environmental and food issues. CARD combines academic excellence with engagement and anticipatory thinking to inform and benefit society. Center researchers develop and apply economic theory, quantitative methods and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers, the research community, agricultural, food and environmental groups, individual decision-makers and international audiences.

Contacts:
Dermot Hayes, Center for Agricultural and Rural Development; dhayes@iastate.edu
Yongjie Ji, Center for Agricultural and Rural Development; yongjiej@iastate.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development; nmcook@iastate.edu

Ames, IA – New research from GianCarlo Moschini at the Center for Agricultural and Rural Development at Iowa State University and Ed Perry at Kansas State University shows that a neonicotinoid ban in the United States may not be a risk free solution to the problem of declining bee populations. In fact, they find that a total agricultural ban in US maize, similar to one introduced in the European Union in 2013, could have unintended consequences.

Neonicotinoids, which were first commercially introduced in the early-1990s and gained popularity as an insecticide throughout the 1990s and 2000s, are now the most popular insecticide in the world. Moschini and Perry found that from 1998 to 2014, adoption of neonicotinoids helped drive a significant reduction in traditional insecticide use. “We show that the major observed reduction in traditional insecticide use was driven in large part by the adoption of two new methods for insect control—genetically engineered (GE) insect-resistant traits and neonicotinoid seed treatments,” Moschini said. “What’s more, our results suggest that neonicotinoid seed treatments actually reduced insecticide use by more than GE traits. Specifically, we found that neonicotinoid seed treatments reduced the use of pyrethroids by 52% and organophosphates by 47%.”

Neonicotinoid use has not been without recent controversy, however, as some lab studies have linked neonicotinoids to the decline of bee populations. Similar studies were a driving factor behind the EU’s 2013 decision to ban neonicotinoids. However, that ban has been shown to have some unintended consequences, just as Moschini says could happen in the United States.

“The results of the ban are still playing out, but some recent research has found that, in response to the ban, EU farmers switched to using other types of insecticides such as pyrethroids. Pyrethroids are also highly toxic to bees,” Moschini said. “Whether the ban has been effective in addressing declining bee populations is also still being assessed—some have noted that bee health did not improve following the implementation of the 2013 restrictions.”

Moschini and Perry’s research shows that, were the United States to ban neonicotinoids, a two-step process is likely to play out. First, some farmers would substitute organophosphates and pyrethroids, as some EU farmers did, in place of neonicotinoids. Second, the switch to neonicotinoid alternatives could result in greater toxicity risk for other groups such as fish, mammals, and humans. Neonicotinoids are much less toxic to mammals and humans than organophosphates and have been classified as a reduced-risk alternative by the Environmental Protection Agency since 2001.

Instead of an outright ban that could lead to increased usage of other insecticides, Moschini said the United States should consider a more balanced approach. This approach would not only aim to address bee population declines, but also neonicotinoid insect resistance. “What would a balanced approach look like? One possibility would be to be to use something like refuges, as with GE insect resistant crops. Another possibility is to require farms to not use neonicotinoid seed treatments once every X years,” he said. “Regulators may also want to consider where bee issues are more problematic—thus, restrictions would be location specific.”

Moschini and Perry’s research is based on roughly 89,000 farm-level surveys on pesticide use for US maize farmers from 1998 to 2014—the same underlying pesticide use data the US Geological Survey uses in The Pesticide National Synthesis Project.

Moschini said one caveat for their work is that it only focuses on maize farmers. “While this is the crop with the most neonicotinoid use, there are other crops, such as soybeans, where neonics are frequently used as well. Our results may not apply to these crops, as their insect control options may differ in important ways from those in maize,” he said.
Moschini and Perry’s paper is available at http://bit.ly/CARD19wp590.

The Center for Agricultural and Rural Development, established in 1950, conducts innovative public policy and economic research on agricultural, environmental and food issues. CARD combines academic excellence with engagement and anticipatory thinking to inform and benefit society. Center researchers develop and apply economic theory, quantitative methods and interdisciplinary approaches to create relevant knowledge.

Contacts:
GianCarlo Moschini, Center for Agricultural and Rural Development; moschini@iastate.edu
Ed Perry, Kansas State University; edperry@ksu.edu
Nathan Cook, Communications, Center for Agricultural and Rural Development; nmcook@iastate.edu

AMES, Iowa – Forty million Americans, including 6.5 million children, are food insecure, according to the U.S. Department of Agriculture, which means they do not have enough food for an active, healthy life.

Many rely on the Supplemental Nutrition Assistance Program (SNAP) – the largest food assistance program for low-income families – to help make ends meet. Still, 51.2 percent of households receiving SNAP benefits, commonly known as food stamps, were food insecure in 2016.

Given the extent of food insecurity, a team of Iowa State University economists developed a methodology to analyze potential redundancies between SNAP and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the third-largest food assistance program in the U.S. Their research, published in the Southern Economic Journal, provides evidence that the programs are in fact complementary, not redundant. They found that participating in both SNAP and WIC compared to SNAP alone increases food security by at least 2 percentage points and potentially as much as 24 percentage points.

“Our findings can help policymakers design more efficient programs to meet food needs,” said Helen Jensen, ISU professor emeritus of economics. “We know low-income families often participate in more than one food assistance program, and we find the combination of SNAP and WIC helps reduce food insecurity for participating households.”

Challenges of measuring program effects
The programs are similar, but serve different needs. WIC covers specific foods to meet the nutritional needs of pregnant women and new mothers as well as infants and young children. Participants also receive nutrition counseling and referrals for health services, such as prenatal programs. In comparison, eligible households can use SNAP benefits to buy most food items. All households included in the study were potentially eligible for both programs, but they chose whether or not to participate.

This “self-selection” is one reason it is difficult for researchers to ascertain whether a program causes a change in food insecurity. WIC and SNAP benefits are not randomly assigned, so any differences in food security outcomes between participants and nonparticipants could be due to actual causal impacts of the programs or unobserved differences between households that apply for benefits and those that do not.

If households at greatest risk of becoming food insecure are most likely to apply – for example, in the case of a job loss – it might falsely appear the programs are ineffective in alleviating food insecurity, the researchers said. In fact, while participants may be less food secure than eligible nonparticipants, participants may still be more food secure than they would have been in a world without the programs.

Another challenge for researchers is that households are known to systematically underreport benefits, often because they don’t want to admit they are receiving government assistance.

“For these reasons, traditional econometric methods lead to misleading estimates,” said Oleksandr Zhylyevskyy, associate professor of economics. “With that in mind, we developed a methodology that allows us to more accurately measure the true effects of WIC and SNAP.”

The researchers applied their methodology to data from the USDA’s National Household Food Acquisition and Purchase Survey or FoodAPS, which provides self-reported household participation in SNAP and WIC and validated data for SNAP participation. The study included 460 households that were income-eligible for both programs. They were surveyed for one week.

On average, these households were families of four with two children, one under the age of 6. The average monthly income was about $1,600. More than 75 percent rented a home or apartment, 26 percent did not own or lease a vehicle and 11 percent had used a food pantry within the past 30 days.

FoodAPS matched survey responses about SNAP participation with official administrative records to identify response errors, but no similar verification was available for WIC. The ISU researchers say the new methodology was specifically designed to handle this type of scenario in which researchers can corroborate answers for some survey questions, but not others.

“Our goal was to strike a balance between making assumptions that are weak enough to be credible, but strong enough to be informative,” said Brent Kreider, professor of economics. “Policymakers may ask whether these programs actually work or merely increase government spending without reducing food insecurity. We find WIC helps even when SNAP is already in place.”

The study was funded by the National Bureau of Economic Research. You can find the paper here.

Contacts:
Helen Jensen, Economics; hhjensen@iastate.edu
Brent Kreider, Economics; bkreider@iastate.edu
Oleksandr Zhylyevskyy, Economics; oz9a@iastate.edu
Angie Hunt, News Service; amhunt@iastate.edu