A snapshot of the Upper Midwest ag economy heading into harvest

The recent Iowa Bankers Association conference offered a snapshot of the ag economy as we head into October..Some Upper Midwest farmers are dealing with drought, while others are trying to harvest amidst excessive precipitation. Des Moines looked a lot like Seattle earlier this month during the IBA convention, with mist falling for at least two straight days. Speaking at a convention breakfast, Christopher Pudenz, economics and research manager for the Iowa Farm Bureau Federation, offered observations. With the price of diesel fuel averaging $6.50 per gallon, it’s costing a lot more than anticipated to complete this year’s harvest. In general, row crop prices are down while livestock prices are up. He shared a chart that illustrated crop prices between 2022 and 2025. Wheat was the biggest loser in that time frame, with the price dropping 64 percent. Pudenz said bankers are likely to see more farmers with cashflow issues. But, as difficult as conditions may be in some areas this season, Pudenz clarified that “this is not the 1980s.” Because the price of land is generally holding its value, farm balance sheets still hold up. For the record, the current average price for an acre of farmland in Iowa is $11,549 per acre.A question came up about the likelihood of the farm bill advancing, and Pudenz speculated that unless Republicans hold both the House and Senate in this fall’s election, Congress is not likely to pass a farm bill anytime soon. Among the most important things that farm advocates should be working on, Pudenz said:Get input costs downDiversify the country’s soybean exports (currently, China is the U.S.’s biggest customer)Protect the Mexico/Canada trade agreementsRebuild the beef herd in the U.S. Pudenz said beef production is likely to move east as Western states seem to get drier.This report was published in July, but it is a good summary of ag conditions in Iowa. Pudenz said that while countries such as Brazil compete fiercely with the U.S. ag industry, the United States continues to retain the world’s best agribusiness, citing rich soil, abundant fuel, transportation systems that make distribution and exporting relatively easy, and access to capital to keep the system financed.