Editorials: Ag layoffs

A wave of layoffs is cresting over Iowa this summer as sharply lower commodity prices damp machinery sales. Most prominent has been John Deere, which has laid off more than 2,000 workers at multiple plants and continues to shift production to Mexico. All other major equipment makers have announced job cuts or shifts of production to lower-cost centers.

Agriculture is not the only industry feeling the pain. An uptick in unemployment data, combined with world uncertainty, led to jitters on Wall Street this week after stock indices just set record highs. The economy appears to be cooling off, and the Federal Reserve is widely expected to cut interest rates in September

Storm Lake is fairly well secured.

Tyson closed its Perry pork slaughter plant with 1,300 employees. This was not a layoff but a permanent closure of a plant that opened in 1963. Tyson said it was part of a move to cut costs amid a flood of red ink in pork last year. The Arkansas meat company expects that its pork division will be profitable this year. Storm Lake’s production bustles along and some workers from Perry were expected to shift to Storm Lake.

So long as the avian flu can be controlled, the turkey business should also benefit from lower feed costs. Employment here remains strong. Most of our regional manufacturing is tied up in grain handling equipment, which simply wears out and must be replaced unlike a 10-year-old tractor.

Lower meat prices are showing up at the grocery store. Pork tenderloin sold for under $2 a pound here last week. That will make people who have not received pink slips feel better about their economic position. Iowa’s unemployment rate was at 2.8% in June, which is low.

Meanwhile, wages have been rising steadily in recent years. Farmers have had three years of record profits to bank. There is not widespread stress in the ag sector, and the Storm Lake area economy is not contracting. The national economy is cooling off, not crashing.

The US economy has been remarkably strong coming out of the pandemic, which has fed inflation. A moderated cooling is in order, and the Fed is likely to loosen up at its next meeting. That will come as little comfort to those in Waterloo or Perry who lost their jobs, but they could sense that the layoffs were inevitable. Manufacturing has been moving out of Iowa for a long time, and the Perry plant never fit Tyson’s scheme. Unfortunately, Iowa has made its unemployment benefits more meager, which makes these inevitable changes all the more painful for those who sweat for a living.

Growing dead zone

Federal officials reported last week that the dead zone in the Gulf of Mexico grew surprisingly large this year to 6,700 square miles — about the size of New Jersey. That is well above the five-year average of 4,800 square miles. Some thought warmer water might limit the growth. Not so.

Actually, water researcher Chris Jones, who got run off from state employment for being too blunt about nitrate pollution, predicted a much bigger dead zone because of huge spring flushes from spring flooding following four years of drought.

The dead zone is created by nitrate from fertilizer applied in the Mississippi River basin. Iowa and Illinois are the two biggest contributors. We have a voluntary nutrient reduction standard that proves year after year to be insufficient to the challenge.

“Weather and other factors will always introduce variability in the hypoxic zone measurement from year to year, but the focused conservation implementation work within each state is making a positive impact on our water quality,” Iowa Agriculture Secretary Mike Naig said upon hearing the news about the polluted Gulf.

The measurements contradict Naig’s best intentions.

We are growing so much corn we can barely give it away. We continue to plant right up to the river despite prices dropping in half. We introduce bioswales along the Raccoon River to make us feel better about it. The fact remains that the Gulf of Mexico is being suffocated by our corn and soy production, and we are doing very little about it. Iowa has the worst surface water pollution problem in the country. It is not getting better.