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Iowa AgriScope 2030

The report is organized in a chapter format

Chapter 6: Appendix

A | Summary of Steering Committee Meetings 365-369

B | Final Steering Committee Meeting Prioritization Exercise

Results 370-434

C | Responsibilities 435-555

Priority Strategies, Recommendations & Actions organized by

Who is Responsible

Secondary Strategies, Recommendations & Actions organized by

Who is Responsible

D | Resources 556-559

Chapter 1: Introduction 3-11

Background | Process

Economic Importance of Iowa Agriculture

Chapter 2: Executive Summary 12-37

Goal & Strategic Framework

Priority Strategies including Recommendations

Secondary Strategies including Recommendations

Chapter 3: Full Report 38-161


Priority Strategies including Recommendations, Actions,

Rationale & Responsibilities

Secondary Strategies including Recommendations, Actions,

Rationale & Responsibilities

Chapter 4: Situational Analysis 162-184

Chapter 5: Value Chains/Competitiveness Assessments 185-363

Corn | Soybeans | Pork | Beef | Dairy

Eggs | Turkeys | Biofuels

Report Contents1

2

Report

Appendices

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2 | Context | Iowa AgriScope 2030

Chapter 1: Introduction


Charged with developing a comprehensive, credible and practical plan

to strengthen and grow Iowa agriculture

Background– “Iowa will lead the world in agriculture, doubling production of our crops and value-added products while increasing

personal income, creating value and creating jobs. This plan will address systems to better handle, store, transport and transfer the increased production of agricultural crops, renewables, energy and added products,” according to Iowa Governor Terry Branstad in September 2010.

Project Objective– A comprehensive, credible, practical plan that Iowa leaders may use to strengthen and build Iowa’s agriculture, food,

fiber, alternative energy and supporting services sectors.

Project Sanctioned by Governor Terry Branstad and Secretary of Agriculture Bill Northey– Both the Governor and the Secretary endorsed and participated in the project. However, this did not indicate an

automatic endorsement of the final product.

Components– Five Context team members conducted extensive research and interviews.

– Twenty Iowa leaders provided feedback and direction through Steering Committee participation.

– One hundred interviewees provided insights into specific aspects of Iowa’s agriculture, food, fiber, alternative energy and supporting services sectors.

Timeline– February to November 2011

Conceived of and Funded by– Iowa Soybean Association, Iowa Pork Producers Association, and Iowa Corn Growers Association


The Steering Committee chosen represented a diverse cross-section of

thought leaders throughout Iowa agriculture


James Borel, DuPont/Pioneer

Don Borgman, farmer and John Deere

Bill Couser, cattleman and ethanol

entrepreneur

Rich Degner, Iowa Pork Producers

Association

Kaye DeLange, Cargill Eddyville Plant

Debi Durham, Iowa Department of Economic

Development

Dermot Hayes, Iowa State University (ISU)

professor and Pioneer Chair in

Agribusiness

Dakota Hoben, ISU student and former Iowa

FFA officer

Kirk Leeds, Iowa Soybean Association

Ron Litterer, farmer and Iowa Corn Growers

Association representative

Jim Knuth, Farm Credit Services of Iowa

David Miller, Iowa Farm Bureau

Bill Northey, Iowa Secretary of Agriculture

Craig Rowles, DVM, pork producer and

entrepreneur

Jeff Strohburg, West Central Cooperative

Roger Underwood, Becker Underwood co-

founder and venture investor

Kevin Vinchattle, Iowa Poultry Association

Paul Willis, pork producer and Niman Ranch

Wendy Wintersteen, dean, ISU College of

Agriculture and Life Sciences

Noel White, Tyson

The Steering Committee met three times for facilitated, productive feedback and guidance and

were interviewed individually.

Comprehensive and methodical process was designed and executed to

capture high-level strategy as well as detailed actions


Feb thru Apr May thru July Aug thru Oct November

• Steering

Committee (SC)

Selection

• Situation analysis

• SC meeting to define

opportunities and

obstacles

• Research and

analysis

• Clarification interviews

• Secondary research

• Priority analysis and

report completion

• Governor

• Sponsors

Preparation Data Collection Analysis Presentation

• SC interviews

• Key opinion leader

interviews

• Secondary research

• SC meeting to review,

recommend, and

prioritize growth

opportunities

• SC meeting to prioritize

recommendations

Engaged nearly 100 key opinion leaders on discussions regarding

Iowa’s opportunities in agricultural economic development


Expertise of respondents reflect a diverse cross section of Iowa agriculture

Approach

Key Opinion

Leaders

96 executive-style interviews completed

–Performed with open-ended questions that were

administered in a conversational style

– In-depth, duration between 45-90 minutes

– ‘Face-to-face’ with all Steering Committee members

Crop Producers (Row crop, Fruit/Vegetable)

Livestock Producers (Pork, Beef, Poultry/Eggs, Dairy)

Organic/Local/Fresh Producer & Processor

Cooperatives/Retailers

Organizations/Associations

Co-Products/Specialty Crops

Grain Handling/Processing

Ag. Research/Innovation

Seed

Ag. Chemicals

Ag. Equipment

Energy (Ethanol, Electric)

Food Manufacturing/Meat Processing

Grocery/Downstream Consumer

Transportation (Railway, Roads, Rivers)

Information Technology

Education

Legal

Entrepreneurial Investment Community

Natural Resources

Next Generation of Agriculture

Sustainability

Support Services – Banking/Financing, Economic Development

State Government

Interviews distributed throughout Iowa

Economic Importance of Iowa Agriculture


The agriculture industry is and will continue to be a driving force in the

global marketplace


Source: FAO data and projections

World demand for cereals, 1965 to 2030

“Iowa has a rich tradition of exporting its agricultural know-how to the world, best illustrated by Roswell Garst and John Chrystal . . . . The World Food Prize presents a fresh opportunity for Iowa to continue that tradition in bigger and better ways of being an international leader in agriculture and food security.”

World average meat consumption,

per person, 1964 to 2030

Source: The Des Moines Register, Editorial, October 15, 2011

Iowa is an important and large contributor to the US agricultural

economy


Zoom

In 2009, Iowa was second only to California

in supplying agriculture commodities for US

utilization, consumption and for global trade.

“You are the Silicon Valley of ag biosciences. Youhave assets here that exist nowhere else in the world.You have a perfect storm of opportunities coming together, in terms of . . . . the powerhouse global multinationals in ag biosciences, some of the best research universities in the world, with tremendous resource assets, and of course the land.” - Simon Tripp, BMI, Ohio

Commodity (2009, % of US) Rank

Corn (18%) #1

Soybeans (15%) #1

Hogs (28%) #1

Eggs (16%) #1

Cattle #4 to 6

Source: USDA-ERS and NAS

Source: USDA

The agriculture industry is a critical factor to Iowa’s GSP and

employment as well as individual household income


Agriculture employment = 332,000

Or more than 16% of Iowa’s total 1.946M

“In 2008, this engine of economic growth created $26.3 billion in agriculture production value in the

state. Currently, increased federal and state regulatory actions have created an environment non-supportive of increased productivity, innovation and

job creation. The lack of regulatory stability is driving business out of the state and causing those

who remain to limit or eliminate additional investment in their businesses and employees.”

Governor Terry BranstadIowa’s farm households are 2½ times more

dependent on farm income than the average

US farmer

Zoom

Chapter 2: Executive Summary


Early in the process, a simple yet powerful goal was articulated


Increase the Size and Scope

of Iowa Agriculture


Increase the Size and Scope of Iowa Agriculture

Expansion of Iowa agriculture’s

economic activity requires a rock-

solid foundation, so this project

began with an exploration of what

can be done to protect and improve

Iowa’s existing strengths.

With a strong foundation, Iowa

agriculture can expand in several

directions, depicted as four

opportunities in the top half of the

graphic.

Using analysis and Steering Committee input, a vision was developed to

depict the areas of focus most essential to achieve the goal

Objectives

Strategies

Leadership

This strategic framework was built on nearly 100 interviews and

Steering Committee discussion


GoalIncrease the size

and scope of Iowa agriculture

Protect Comparative Advantages

Strong Soil, Safe Water

Qualified, Adequate Workforce

Improved Transportation Infrastructure

Improve Business Climate

Reasonable Regulations &

Taxes

Business Environment

Encourage Innovation

World Class Research & Education

Innovation Reputation

Expand Economic Activity

Build the Base

Add Value

Expand Exports

Nurture the New

Objectives

Strategies

Leadership

Priorities within the Strategic Framework were identified with support

from the Steering Committee










Taxes






Build the Base

Add Value

Expand Exports

Nurture the NewPriority Strategies Secondary Strategies

Recommendations were developed for all Strategies and prioritized with

support from the Steering Committee


Objectives

Strategies

Recommendations



Re-energize Iowa’s commitment to soil

stewardship, addressing both retention and quality

concerns.

Protect Iowa’s ground water and surface water while

optimizing efficient utilization for both production &

processing.

Prioritize vulnerable landscapes and soils for

federal and state incentive programs.

Priority Recommendations Secondary Recommendations

EXAMPLE

Actions, rationales and responsibilities were designated for each

recommendation (an example can be found in the next three slides)


Strategies

Recommendations

Actions

EXAMPLEStrong Soil, Safe Water


stewardship, addressing both retention

and quality concerns.

Work toward and maintain a limit of soil loss tolerance (T) or

less.

Protect and retain current soil saving structures/practices

and resist incentives to farm through or over them.

Research use of cover crops as a potential mitigation for

soil loss created by the increasing number of heavy rain

events in Iowa.

Encourage landlords to use leases that include incentives

for improving the quality of their soil and conservation

practices.

Promote the value of adding organic matter to Iowa soils by

proving long-term enhancement of productive capacity and

retention of top soil.

Employ practices recommended to increase organic carbon

levels in soil such as no-till, cover crops, crop rotation and

use of livestock manure for fertilizer.

Educate landlords about the value of their asset and the

potential to lose that value through tillage practices that do

not protect the soil from eroding and losing organic matter.


Protect Comparative Advantage

Re-energize Iowa’s commitment to soil stewardship, addressing

both retention and quality concerns.

Reco

m.


Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure

• Work toward and maintain a limit of soil loss tolerance (T) or less.

• Protect and retain current soil saving structures/practices and resist incentives

to farm through or over them.

• Research use of cover crops as a potential mitigation for soil loss created by

the increasing number of heavy rain events in Iowa.

• Educate landlords about the value of their asset and the potential to lose that

value through tillage practices that do not protect the soil from eroding and

losing organic matter.

• Encourage landlords to use leases that include incentives for improving the

quality of their soil and conservation practices.

• Promote the value of adding organic matter to Iowa soils by proving long-term

enhancement of productive capacity and retention of top soil.

• Employ practices recommended to increase organic carbon levels in soil such

as no-till, cover crops, crop rotation and use of livestock manure for fertilizer.

Actio

ns

EXAMPLE


Iowa is blessed with some of the most productive soil on earth, and

Iowa producers have long recognized the value of protecting those

soils. As costs of production increase, though, many find it tempting to

till vulnerable land or employ tillage systems that are less than

protective. Both farmers and landowners are encouraged to recommit to

saving soil and, in fact, improving its quality when possible. Leadership

levels of production and soil stewardship can be achieved through a

continuing quest for reduced tillage practices, appropriate balances of

livestock manure and other nutrient sources, and emerging production

technologies.

According to an ISU study, compaction, erosion and loss of organic

matter have led to a decline in the quality of Iowa’s soils over the past

50 years. Organic matter content in Iowa soils has dropped from an

average of 10% to two percent. However, regaining soil quality can be

achieved by adding organic matter and employing tillage methods that

reverse compaction and reduce erosion

Strong Soil, Safe Water - Rationale

Re-energize Iowa’s commitment to soil stewardship, addressing both retention and quality

concerns.

Sources: Soil Quality, Better Lawns Made Easy, Polk Soil & Water Conservation District and Iowa Storm

Water Education Program; ISU Research: Iowa has lower-quality topsoil than 50 years ago,

EXAMPLE

Photo Source: ISU Extension – Agronomy

http://www.agriculture.state.ia.us/press/pdfs/FinalSQR.pdf

http://www.public.iastate.edu/~nscentral/news/2009/feb/veenstra.shtml

http://extension.agron.iastate.edu/soils/SSDS_maps.html


Strong Soil, Safe Water - Responsibilities


concerns.

Actions Team Leader(s) Team Member(s)

Work toward and maintain a limit of soil loss tolerance

(T) or less.IDALS Ag Producers, SWCDs

Protect and retain current soil saving

structures/practices and resist incentives to farm

through or over them.

Ag Producers

Research use of cover crops as a potential mitigation

for soil loss created by the increasing number of heavy

rain events in Iowa.

ISU

Educate landlords about the value of their asset and

the potential to lose that value through tillage practices

that do not protect the soil from eroding and losing

organic matter.

SWCDs USDA NRCS, ISU, Ag Producers

Encourage landlords to use leases that include

incentives for improving the quality of their soil and

conservation practices.

IDALS, Ag Producers, SWCDs ISU

Promote the value of adding organic matter to Iowa

soils by proving long-term enhancement of productive

capacity and retention of top soil.

SWCDs USDA NRCS, IDALS, Ag Producers

Employ practices recommended to increase organic

carbon levels in soil such as no-till, cover crops, crop

rotation and use of livestock manure for fertilizer.

Ag Producers

EXAMPLE


Priority StrategiesIncluding Recommendations



• Re-energize Iowa’s commitment to soil stewardship, addressing both retention


• Protect Iowa’s ground and surface water while optimizing efficient utilization for

both production and processing.

• Prioritize vulnerable landscapes and soils for federal and state incentive

programs.

Reco

mm

end

ation

s


Through producers’ adoption of innovative tillage methods and

technologies, achieve optimum quality levels for Iowa soils and

limit soil loss to replacement levels. Eliminate water quality

concerns, and assure abundant, clean water supplies that provide

an advantage when attracting and growing agriculture-related

manufacturing and processing.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure

Black = Priority Recommendation Gray = Secondary Recommendation


• Effect lasting improvement to the state regulatory and permitting processes.

• Administer reasonable, fair and relevant regulatory enforcement.

• Determine the effect that Iowa’s business tax ranking is having on the retention

and attraction of bio based businesses to Iowa.

Reco

mm

end

ation

s

Reasonable Regulations and Taxes

Adopt only regulations that are effective and sufficient to protect

Iowans and Iowa’s resources and that are based on science:

reasonable, consistent and practical. Assure a competitive

business tax structure and economic development incentives.

Strateg

y

Improve

Business Climate



Regulations & Taxes


• Support, to the greatest extent possible, research and innovation that builds

Iowa's agriculture production and value added endeavors.

• Recognize the value of research as both a basis and a catalyst for innovation

and provide Iowa's public research institutions with the resources needed to

effectively foster innovation.

• Establish and foster an innovative and entrepreneurial climate throughout

Iowa’s education systems.

• Strengthen the exchange of knowledge between science and

business/industry.

Reco

mm

end

ation

s

World Class Research and Education

Assure that Iowa State University is second to none in its

agriculture and related sectors’ research, development and

education, due to leadership levels of funding and focused

administration. Gain global respect for Iowa’s public and private

research communities. Develop education systems that provide

knowledge and training for the many jobs to be created in

agriculture production and related processing and support sectors.

Strateg

y

Encourage

Innovation


Research & Education



• Increase the production of established Iowa commodities, both crop and

livestock.

Reco

mm

end

ation

s

Build the Base

Meet both local and world demand by increasing production of

Iowa’s leading agriculture crops, livestock and products. Lead the

world in quality and reliability with Iowa’s diverse spectrum of

commodities that are raised via innovative and sustainable

production methods.

Strateg

y

Build

the Base



• Lead efforts to open markets for Iowa commodities and value-added products.

• Include Iowa-based animal health products and production systems in

promotion efforts, as livestock production continues to increase globally.

• Promote and market Iowa agriculture and processing knowledge, expertise and

management skills: Knowledge based consulting for bio fuels processing, food

safety, food processing, livestock production, etc.

Reco

mm

end

ation

s

Expand Exports

Lead the US in export of basic commodities and processed bio

products due to Iowa’s great productivity and even greater

reputation for high quality production and processing.

Strateg

y

Expand Exports



• Build on global leadership in value-added products (i.e. bio-fuels, meat and

other food processing).

• Add value to the value-added and build on the success of Iowa businesses.

• Recruit further processing businesses to locate and grow in Iowa, especially in

rural communities.

• Develop infrastructure and systems that support segregation, storage,

movement and marketing of value-added crops and products, specialty crops,

livestock, etc.

Reco

mm

end

ation

s

Add Value

Utilize cutting edge technologies and Iowa’s quality workforce to

convert an abundance of basic commodities and cutting edge

technologies, systems into value-added products.

Strateg

y

Add Value



Secondary StrategiesIncluding Recommendations



• Influence Congress to appropriate funding for lock expansion projects on the

Upper Mississippi and Illinois rivers authorized in the 2007 Water Resources

Development Act.

• Assure that the Missouri River is maintained as a viable option for commercial

movement of western Iowa commodities and related products into the

extensive US inland waterway system and global markets.

• Plan for projected increases in Iowa crop and livestock production, food and

fuel processing and manufacturing, and resultant truck traffic increases.

• Assure adequate freight rail line capacity, access and provider options to serve

agricultural production and processed product rail needs.

Reco

mm

end

ation

s


Build a healthy mix of transportation systems that give producers,

processors, manufacturers and input providers the options they

need for competitive pricing and market access flexibility. Costs to

move Iowa’s products to national and world markets are as low as

any competing state or country.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure




• Educate, recruit, attract and retain a workforce with knowledge of and passion

about production agriculture, processing and the businesses that serve

agriculture and processing.

Reco

mm

end

ation

s


Create opportunities in the bio economy that encourage the best

and brightest to remain in Iowa and become involved in aspects of

the broad agriculture field. Educate and prepare Iowans to take

leadership roles, advancing technology and developing

innovations that improve Iowa’s agriculture production and

processing sectors. Assure that there is enough available labor to

meet needs.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure



• Convince Iowa businesses and those considering locating or investing here

that Iowa is “Open for Business” and is ready to help resolve problems or

share opportunities.

• Support the new Iowa Partnership for Economic Progress (I-PEP) and its

public-private approach to economic development. Assure the new system is

supportive of a bio based economy and that its needs are prioritized.

• Assure broadband transmission is available to Iowa communities for use by

agriculture businesses, processing businesses, input providers and assure the

integrity of satellite transmissions to GPS receivers.

Reco

mm

end

ation

s

Supportive Business Environment

Develop a reputation for a progressive and supportive form of

government economic development that helps established

businesses resolve problems and new businesses more easily

establish, grow, and prosper. Create a business climate that

encourages commodity processing and further processing

businesses to start in Iowa, come to Iowa and create Iowa jobs.

Strateg

y

Improve

Business Climate



Regulations & Taxes


• Create a climate for innovation in agriculture, food, fiber, f(ph)armaceutical and

renewable fuel businesses, and in the supporting sciences.

• Encourage and support entrepreneurism.

Reco

mm

end

ation

s


Strive to make Iowa known for its culture of innovation and

technology development, and develop valuable support systems

for both. Once those systems are firmly in place, protect them for

use by Iowa’s business, academia and government leaders.

Support entrepreneurism with actions that help translate

innovation into increased economic activity.

Strateg

y

Encourage

Innovation





• Provide an environment in which non-traditional ideas, farming operations and

businesses may establish a foothold and grow.

• Review the needs of new, innovative agriculture production and processing and

prioritize efforts to help with those needs.

• Assist ‘new to Iowa’ production and processing in their efforts to access

investment capital.

Reco

mm

end

ation

s

Nurture the New

Embrace diversity in agriculture production to provide food and

other agriculture products for a variety of markets, especially

Iowans who prefer locally-sourced and/or organic foodstuffs.

Strateg

y

Nurture

the New



• Lead campaign to increase the size and scope of Iowa agriculture.

• Achieve effective collaboration between agriculture and related sectors by

encouraging formation of an organization or system that becomes a foundation

for cooperation and issue prioritization across Iowa’s diverse agriculture sector.

Reco

mm

end

ation

s

Leadership


Leadership

Iowa’s government, business and association leaders believe in

the importance of agriculture and associated sectors to Iowa’s

economy and align their efforts to maintain growth. They are

supported in their efforts by a cohesive industry that sets priorities

and proves itself worthy of leadership’s efforts.

Strateg

y

Questions

For Further Information,

Please Contact:

THE CONTEXT NETWORK4401 Westown Parkway, Suite 214

West Des Moines, IA 50266

Phone: 515/225-2204

Fax: 515/225-0039

www.contextnet.com


http://www.contextnet.com/

Chapter 3: Full Report


Early in the process, a simple yet powerful goal was articulated


Increase the Size and Scope

of Iowa Agriculture


Increase the Size and Scope of Iowa Agriculture

Expansion of Iowa agriculture’s

economic activity requires a rock-

solid foundation, so this project

began with an exploration of what

can be done to protect and improve

Iowa’s existing strengths.

With a strong foundation, Iowa

agriculture can expand in several

directions, depicted as four

opportunities in the top half of the

graphic.

Using analysis and Steering Committee input, a vision was developed to

depict the areas of focus most essential to achieve the goal

Objectives

Strategies

Leadership

This strategic framework was built on nearly 100 interviews and

Steering Committee discussion










Taxes






Build the Base

Add Value

Expand Exports

Nurture the New

Objectives

Strategies

Leadership

Priorities within the Strategic Framework were identified with support

from the Steering Committee










Taxes






Build the Base

Add Value

Expand Exports

Nurture the NewPriority Strategies Secondary Strategies

Recommendations were developed for all Strategies and prioritized with

support from the Steering Committee


Objectives

Strategies

Recommendations




stewardship, addressing both retention and quality

concerns.

Protect Iowa’s ground water and surface water while

optimizing efficient utilization for both production &

processing.

Prioritize vulnerable landscapes and soils for

federal and state incentive programs.

Priority Recommendations Secondary Recommendations

EXAMPLE

Actions were identified for all Recommendations as were Rationale and

Responsibilities


Strategies

Recommendations

Actions

EXAMPLEStrong Soil, Safe Water


stewardship, addressing both retention


Work toward and maintain a limit of soil loss tolerance (T) or

less.

Protect and retain current soil saving structures/practices

and resist incentives to farm through or over them.

Research use of cover crops as a potential mitigation for

soil loss created by the increasing number of heavy rain

events in Iowa.

Encourage landlords to use leases that include incentives

for improving the quality of their soil and conservation

practices.

Promote the value of adding organic matter to Iowa soils by

proving long-term enhancement of productive capacity and

retention of top soil.

Employ practices recommended to increase organic carbon

levels in soil such as no-till, cover crops, crop rotation and

use of livestock manure for fertilizer.

Educate landlords about the value of their asset and the

potential to lose that value through tillage practices that do

not protect the soil from eroding and losing organic matter.





Reco

m.


Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure















Actio

ns

EXAMPLE











technologies.






reverse compaction and reduce erosion



concerns.



EXAMPLE








concerns.







Ag Producers




ISU




organic matter.













Ag Producers

EXAMPLE

Priority StrategiesIncluding Recommendations, Actions, Rationales and Responsibilities









programs.

Reco

mm

end

ation

s


Through producers’ adoption of innovative tillage methods and

technologies, achieve optimum quality levels for Iowa soils and

limit soil loss to replacement levels. Eliminate water quality

concerns, and assure abundant, clean water supplies that provide

an advantage when attracting and growing agriculture-related

manufacturing and processing.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure






Reco

m.


Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure















Actio

ns











technologies.






reverse compaction and reduce erosion.



concerns.










concerns.







Ag Producers




ISU




organic matter.













Ag Producers



Protect Iowa’s ground and surface water while optimizing

efficient utilization for both production and processing.

Reco

m.


Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure

• Take a national leadership role, through a Nutrient Management Strategy, in

developing approaches to water quality protection that do not unnecessarily

compromise production practices or processing needs.

• Continue to administer fair and reasonable regulations that prevent run-off from

production agriculture and processing businesses into surface water supplies.

Actio

ns



Protect Iowa’s ground and surface water while optimizing efficient utilization for both

production and processing.

Suggestions for the Iowa NMS:

Adoption of innovative, cost effective technologies that prevent the

tools and methods of production agriculture from compromising the

water resources of Iowa.

Prioritization of voluntary compliance over mandated regulation.

Organization of recommended actions on a watershed basis.

Inclusion of all vested interests in formulating watershed goals.

Source: Iowa Geology 1995, Iowa Department of Natural Resources

The Mississippi River flows through a narrow valley between

Davenport and Rock Island-Moline.

Globally, water is becoming an ever more precious

resource, so Iowa’s abundant water supply is a distinct

competitive advantage for economic growth built on

agriculture production and processing. Iowans are well

aware of the need to protect the quality of Iowa’s water

supplies both for its productive capacity and for the many

other benefits it affords Iowa’s citizens.

IDALS, IDNR, ISU and several ag organizations have

begun a comprehensive, thoughtful and proactive

process to build a Nutrient Management Strategy (NMS)

for the state. The goal of the strategy is to protect the

state’s waters but will also lead to more efficient use of

applied production inputs, further reduction in soil loss

and possible mitigation of the hypoxia situation in the

Gulf of Mexico

http://www.igsb.uiowa.edu/Browse/satelite/satelite.htm


Strong Soil, Safe Water - Actions and Responsibilities

Protect Iowa’s ground and surface water while optimizing efficient utilization for both



Take a national leadership role, through a Nutrient

Management Strategy, in developing approaches to

water quality protection that do not unnecessarily

compromise production practices or processing

needs.

Iowa Secretary of AgIDALS, Ag & Commodity Organizations,

Ag Producers, SWCDs

Continue to administer fair and reasonable regulations

that prevent run-off from production agriculture and

processing businesses into surface water supplies.

IDNR



Prioritize vulnerable landscapes and soils for federal and state

incentive programs.

Reco

m.


Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure

• Target vulnerable landscapes that need more protective measures and,

possibly, more incentive for set-aside.

• Release non-vulnerable land from protection, or set-aside, in order to meet

growing production needs.

Actio

ns



Prioritize vulnerable landscapes and soils for federal and state incentive programs.

The original purposes of federal land diversion

programs, to protect vulnerable soils and to reduce

chronic production surpluses, have become

overshadowed in the past couple decades by their

popularity as a means to provide wildlife habitat

and recreational opportunities.

This trend has pulled current policies and programs

away from adequately protecting vulnerable

landscapes. According to ISU economist Chad

Hart, “Given the strength of crop prices, both in

recent years and projected into the future, land

diversion subsidies are no longer needed by U.S.

agriculture. Biofuel and international markets have

grown tremendously, removing excess

supplies. High prices indicate the need for more

crop production to meet demands, requiring that

land be brought back into production.

In order to meet this challenge, those crafting

federal farm policy should explore innovative,

strategic, and selective approaches to land

retirement and conservation programs that protect

the most environmentally sensitive lands, while

maintaining the environmental benefits from

previous programs and allowing other land to

reenter production in order to meet various food,

feed, fuel, and fiber demands.”

Source: Chad Hart, ISU, Assistant Professor Economics, Extension Economist, Grain Market Specialist



Prioritize vulnerable landscapes and soils for federal and state incentive programs.


Target vulnerable landscapes that need more

protective measures and, possibly, more incentive for

set-aside.

USDA NRCS Congress

Release non-vulnerable land from protection, or set-

aside, in order to meet growing production needs.USDA NRCS





and attraction of bio based businesses to Iowa.

Reco

mm

end

ation

s


Adopt only regulations that are effective and sufficient to protect

Iowans and Iowa’s resources and that are based on science:

reasonable, consistent and practical. Assure a competitive

business tax structure and economic development incentives.

Strateg

y

Improve

Business Climate



Regulations & Taxes


Effect lasting improvement to the state regulatory and permitting

processes.

Reco

m.


Strateg

y

• Pass only laws/regulations with sunset dates so that they must be revisited within a few

years and determined to be still valid, or not.

• Perform an in-depth scan of regulatory and permitting programs to identify those that are

not delivering the legislated intent.

• Evaluate systems proven to bring about improvement and choose one best suited to

Iowa’s government (i.e. Six Sigma, Good to Great, Lean Manufacturing, etc.).

• Provide funding and lead application of the chosen system to government agencies and

systems, beginning with regulatory and permitting programs that affect agriculture and

related businesses.

• Process applications and permits in a timely, professional manner. Notify applicants

immediately if there is a problem with the application and/or notify of delays in the

process.

• Reform the permit system to allow applications and permits to cover the entire state, not

just a particular jurisdiction.

• Reform the permit system to allow amendment of permits, so that reapplication is not

necessary each time regulations change or when businesses change only one aspect of

their operation.

Actio

ns


Regulations & Taxes

Improve

Business Climate


Reasonable Regulations and Taxes - Rationale

Effect lasting improvement to the state regulatory and permitting processes.

Concerns and criticisms about Iowa’s regulatory and permitting systems have been an

overarching theme of this project. Interviewees feel strongly that the systems are not

administered consistently and that rules, regulations and permitting processes change too

often. Conflicts arise when systems and processes are not applied with an understanding of

business pressures, causing costly delays or unnecessary adaptations.

Costs of regulation are often regarded as ‘hidden taxes’ that provide revenue for the state in

lieu of raising taxes. If regulations and the permitting process are also inefficient, the cost is

increased, but without benefit to either the state or the business being regulated. Studies show

that small businesses bear a disproportionate burden for most regulations, and the vast

majority of Iowa’s businesses employ fewer than 100 people.

“Environmental and tax compliance regulations appear to be the main cost drivers in determining the severity of the disproportionate impact on small firms.Compliance with environmental regulations costs 364 percent more in small firms than in large firms.The cost of tax compliance is 206 percent higher in small firms than the cost in large firms.”

Source: The impact of regulatory costs on small firms, Nicole V. Crain and W. Mark Crain, Lafayette College, 2010

http://www.sba.gov/sites/default/files/rs371.pdf


Reasonable Regulations and Taxes - Responsibilities

Effect lasting improvement to the state regulatory and permitting processes.


Pass only laws/regulations with sunset dates so that

they must be revisited within a few years and

determined to be still valid, or not.

Iowa Legislature Iowa Governor

Perform an in-depth scan of regulatory and permitting

programs to identify those that are not delivering the

legislated intent.

Iowa Governor IDNR and Other Regulatory Agencies

Evaluate systems proven to bring about improvement

and choose one best suited to Iowa’s government (i.e.

Six Sigma, Good to Great, Lean Manufacturing, etc.).

Iowa Governor

Provide funding and lead application of the chosen

system to government agencies and systems,

beginning with regulatory and permitting programs that

affect agriculture and related businesses.

Iowa Governor Iowa Legislature

Process applications and permits in a timely,

professional manner. Notify applicants immediately if

there is a problem with the application and/or notify of

delays in the process.

IDNR and Other Regulatory Agencies

Reform the permit system to allow applications and

permits to cover the entire state, not just a particular

jurisdiction.

IDNR and Other Regulatory AgenciesIowa Governor, Iowa Legislature, Rural

Counties/Communities

Reform the permit system to allow amendment of

permits, so that reapplication is not necessary each

time regulations change or when businesses change

only one aspect of their operation.

IDNR and Other Regulatory AgenciesIowa Governor, Iowa Legislature, Rural



Administer reasonable, fair and relevant regulatory enforcement.

Reco

m.


Strateg

y

• Punish habitual offenders and scofflaws, but bring reason to bear on apparent

mistakes, misunderstandings or alternative interpretation of the regulation,

especially for first-time offenders.

• Create a culture of goal-directed enforcement within state regulatory agencies

(enforcement should be directed by the goal of the regulation) and discourage

a ‘gotcha’ approach.

Actio

ns


Regulations & Taxes

Improve

Business Climate




There is general agreement among those interviewed for this project that habitual offenders of

state and federal regulations should be dealt with harshly and, when appropriate, made to

leave the state and/or give up their business or enterprise in Iowa. They also acknowledge a

need for certain regulations and permits.

However, they expressed concerns about unreasonable enforcement of the regulations,

especially when a “gotcha” approach is used. Most agree that the goal of the regulation will be

achieved more readily if the enforcement effort leads to greater understanding and compliance

than if the enforcement is arbitrary and unevenly administered.

Environmental and tax compliance regulations

appear to be the main cost drivers in determining

the severity of the disproportionate impact on

small firms. Compliance with environmental

regulations costs 364% more in small firms than

in large firms. The cost of tax compliance is 206%

higher in small firms than the cost in large firms.

Source: The Impact of Regulatory Costs on Small Firms, US Commerce Department

Photo Source: Iowa Pork Producer Association, Vol 47, No. 6-7, July 2010

http://www.iowapork.org/Portals/iowapork/July 2010 Mag.pdf





Punish habitual offenders and scofflaws, but bring

reason to bear on apparent mistakes,

misunderstandings or alternative interpretation of the

regulation, especially for first-time offenders.

IDNR and Other Regulatory Agencies

Create a culture of goal-directed enforcement within

state regulatory agencies (enforcement should be

directed by the goal of the regulation) and discourage

a ‘gotcha’ approach.

IDNR and Other Regulatory Agencies Iowa Governor


Determine the effect that Iowa’s business tax ranking is having

on the retention and attraction of bio based businesses to Iowa.

Reco

m.


Strateg

y

• If analysis proves advisable, take measures to improve Iowa’s business tax

ranking over the next five years, then continue to strive for an ever more

business-friendly tax structure.

• Lower corporate income tax or provide a tax credit for investment to offset

inhibiting effect of business tax.

Actio

ns


Regulations & Taxes

Improve

Business Climate



Iowa ranks 45th in the Tax Foundation‘s 2011 State Business Tax Climate Index.

The Index compares the states in five areas of taxation that impact business: corporate

taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on

property, including residential and commercial property.

2009 State Business Tax Ranks

Iowa (45th)

Minnesota (43rd)

Wisconsin (40th)

Illinois (23rd)

Missouri (16th)

Nebraska (29th)South Dakota (1st)

State leaders and those intent on adding value to

Iowa commodities are concerned that business

taxes are a factor in businesses’ decisions to locate

or grow in another state. A focused study would

determine the actual effect that taxes are having on

businesses considering locating in Iowa and

determine the changes that would have the most impact.

Determine the effect that Iowa’s business tax ranking is having on the retention and attraction

of bio based businesses to Iowa.

Source: Tax Foundation website

http://www.taxfoundation.org/research/topic/28.html



Determine the effect that Iowa’s business tax ranking is having on the retention and attraction of bio

based businesses to Iowa.


If analysis proves advisable, take measures to improve

Iowa’s business tax ranking over the next five years,

then continue to strive for an ever more business-

friendly tax structure.


Lower corporate income tax or provide a tax credit for

investment to offset inhibiting effect of business tax.Iowa Legislature Iowa Governor


• Support, to the greatest extent possible, research and innovation that builds

Iowa's agriculture production and value added endeavors.


and provide Iowa's public research institutions with the resources needed to





business/industry.

Reco

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end

ation

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Assure that Iowa State University is second to none in its

agriculture and related sectors’ research, development and

education, due to leadership levels of funding and focused

administration. Gain global respect for Iowa’s public and private

research communities. Develop education systems that provide

knowledge and training for the many jobs to be created in

agriculture production and related processing and support sectors.

Strateg

y

Encourage

Innovation





Support, to the greatest extent possible, research and innovation

that builds Iowa's agriculture production and value added

endeavors.

Reco

m.


Strateg

y

• Increase funding levels for public research that develops pathways for

sustainable production increases and profitability: solving problems of

commercial crop and livestock production.

• Support research and development of processes that turn bi-products and

waste materials into usable products.

• Support biofuels research and development to stay on the cutting edge of new

efficiencies and technologies.

Actio

ns



Encourage

Innovation


World Class Research and Education - Rationale

Support, to the greatest extent possible, research and innovation that builds Iowa's

agriculture production and value added endeavors.

It is widely accepted that there have been four key factors in the success of Midwest

agriculture: natural resources, transportation infrastructure, people . . . .and research.

More than a century of basic agriculture research, supported by the federal and state

governments and conducted at public universities, has brought Iowa and neighboring states

from subsistence farming to global powerhouse.

That productivity and competitive advantage is in jeopardy, as government funding for basic

research dissipates and institutions struggle to find replacement funding.

The National Agricultural Research, Extension,

Education and Economics Advisory Board has

recommended “ at least a 25% increase in the

annual growth rate of funding of agricultural

productivity enhancing research and extension” to

counter “a number of adverse consequences, both

nationally and internationally” resulting from two

decades of stagnate funding.

Source: A Report on Agricultural Productivity and Agricultural Research,

National Agricultural Research, Extension, Education and Economics

Advisory Board, 2011

Photo Source: West Liberty Foods

http://www.ree.usda.gov/ree/nareeeab/reports/05122011Productivity_and_Research_Final.pdf

http://www.wlfoods.com/growers.aspx


World Class Research and Education – Responsibilities

Support, to the greatest extent possible, research and innovation that builds Iowa's

agriculture production and value added endeavors.


Increase funding levels for public research that

develops pathways for sustainable production

increases and profitability: solving problems of


Congress, Iowa Legislature

USDA, Iowa Governor, Iowa Secretary of

Ag, ISU, Ag & Commodity Organizations,

Ag Producers

Support research and development of processes that

turn bi-products and waste materials into usable

products.

Businesses

USDA, Iowa Governor, Iowa Legislature,

ISU, Ag & Commodity Organizations, Ag

Producers

Support biofuels research and development to stay on

the cutting edge of new efficiencies and technologies.Businesses

USDA, Iowa Governor, Iowa Legislature,

ISU, Ag & Commodity Organizations


Recognize the value of research as both a basis and a catalyst

for innovation and provide Iowa's public research institutions with

the resources needed to effectively foster innovation.

Reco

m.


Strateg

y

• Focus currently available state funding on research and development programs

that foster innovation and lead to economic activity.

• Reward those institutions or individuals who focus their research on innovative,

cutting edge solutions to current and emerging challenges in Iowa’s agriculture

industry.

• Increase state support of research and development that improves Iowa’s

position as an agriculture, food and renewable fuel innovator.

• Maximize resources and achieve better, quicker research results by providing

leadership for collaboration with other states’ and countries’ research

institutions.

• Provide an information infrastructure that makes it possible for Iowa

researchers to monitor and manage research and development around the

world.

• Tie state research funding to an incentive to develop and commercialize in

Iowa.

Actio

ns



Encourage

Innovation



Recognize the value of research as both a basis and a catalyst for innovation and provide

Iowa's public research institutions with the resources needed to effectively foster innovation.

Iowa’s research institutions, businesses,

producers and associations are actually quite

innovative and entrepreneurial. However,

Iowa is not yet known for this asset, so greater

efforts are needed to raise its profile while

further improving its innovation base and

entrepreneurial support.

While increased funding for innovative

research is an important first step, other

incentives and encouragements can be

employed to attract and keep the most

innovative, problem-solving researcher teams

in Iowa.

The chain linked model of innovation, portraying the interplay of research

and innovation. Source: The Role of Basic Research in Innovation, Magnus Gulbrandsen

http://www.cas.uio.no/Publications/Seminar/Confluence_Gulbrandsen.pdf



Recognize the value of research as both a basis and a catalyst for innovation and provide

Iowa's public research institutions with the resources needed to effectively foster innovation.


Focus currently available state funding on research

and development programs that foster innovation and

lead to economic activity.

ISUIowa Governor, Iowa Legislature, Other

Universities

Reward those institutions or individuals who focus their

research on innovative, cutting edge solutions to

current and emerging challenges in Iowa’s agriculture

industry.

Board of RegentsIowa Governor, Iowa Legislature, IDALS, I-

PEP

Increase state support of research and development

that improves Iowa’s position as an agriculture, food

and renewable fuel innovator.

Iowa Governor, Iowa Legislature

Maximize resources and achieve better, quicker

research results by providing leadership for

collaboration with other states’ and countries’ research

institutions.

ISU Other Universities

Provide an information infrastructure that makes it

possible for Iowa researchers to monitor and manage

research and development around the world.

BusinessesIowa Governor, Iowa Legislature, ISU,

Other Universities

Tie state research funding to an incentive to develop

and commercialize in Iowa.ISU Iowa Governor, Iowa Legislature


Establish and foster an innovative and entrepreneurial climate

throughout Iowa’s education systems.

Reco

m.


Strateg

y

• Develop and encourage K-12 and post-secondary education programs that

support entrepreneurial activities and innovation.

• Encourage an innovation and entrepreneurship component for STEM.

• Support, encourage and raise the profile of community college and university

education programs that foster innovation.

Actio

ns



Encourage

Innovation



Establish and foster an innovative and entrepreneurial climate throughout Iowa’s education

systems.

Important steps have been taken to foster bio economy innovation

and entrepreneurship in Iowa’s school children through Iowa’s

STEM program.

By giving Iowa’s students, from kindergarten

through post-secondary, the tools and

encouragement they need to excel in science,

technology, engineering and math, Iowa is also

creating a workforce ideally prepared for 21st

century agriculture innovation. Providing industry-

specific information and learning opportunities will

enhance Iowa youth’s understanding of agriculture,

food, fuel and f(ph)arma opportunities.

http://www.iowastem.org/assets/roadmap.pdf



Establish and foster an innovative and entrepreneurial climate throughout Iowa’s education

systems.


Develop and encourage K-12 and post-secondary

education programs that support entrepreneurial

activities and innovation.

IDE local school boards

Encourage an innovation and entrepreneurship

component for STEM.IDE

Ag & Commodity Organizations,

Businesses

Support, encourage and raise the profile of community

college and university education programs that foster

innovation.

IDEISU, Other Universities, Community

Colleges, Board of Regents


Strengthen the exchange of knowledge between science and

business/industry.

Reco

m.


Strateg

y

• Fully utilize viable results of Iowa-based research to add value to Iowa

products.

Actio

ns



Encourage

Innovation



Strengthen the exchange of knowledge between science and business/industry.

Those interviewed for this project saw this recommendation as an

important component of expanding the scope of Iowa’s agriculture.

Universities are seen as economic drivers in developing and

transferring knowledge to the commercial marketplace.

They also provide fertile ground for creating a more innovative society

by imbuing students with entrepreneurial attitudes and approaches to

problem-solving.

This ‘third mission’, extension and outreach, is not universally

embraced, but if embraced in Iowa’s agriculture sector, would support

many of the recommendations developed during this project. Through

research and extension programs, ISU partners with businesses to

make fundamental and applied discoveries and then assure their

applicability to the marketplace.



Strengthen the exchange of knowledge between science and business/industry.


Fully utilize viable results of Iowa-based research to

add value to Iowa products.Businesses

ISU, Ag & Commodity Organizations, Ag

Producers



livestock.

Reco

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end

ation

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Build the Base

Meet both local and world demand by increasing production of

Iowa’s leading agriculture crops, livestock and products. Lead the

world in quality and reliability with Iowa’s diverse spectrum of

commodities that are raised via innovative and sustainable

production methods.

Strateg

y

Build

the Base



Increase the production of established Iowa commodities, both

crop and livestock.

Reco

m.

Build the Base

Strateg

y

• Facilitate approval and adoption of technologies that will increase yields without

depleting or compromising resources.

• Promote and utilize livestock manure as a valuable, natural, locally-produced

source of nitrogen and organic matter.

• Capitalize on Iowa’s competitive advantage for livestock production and establish a

‘Protein Pro Team’ approach to promoting responsible growth in the sector.

• Adopt a pro-active, self-regulating attitude in order to prevent problems.

• Encourage and assist local communities that want to attract and support local

livestock production and food processing.

• Mitigate concerns/conflicts that arise from erroneous perceptions or cavalier

attitudes.

• Prevent the need for subsidy programs by providing access to revenue insurance,

loan guarantees, etc.

• Recognize the debt and equity capital needs of commodity producers, and

processors that source commodities, caused by increasingly volatile market cycles.

Actio

ns

Build

the Base


Build the Base - Rationale

Increase the production of established Iowa commodities, both crop and livestock.

Iowa farmers and the businesses that

provide their inputs and marketing

systems are confident that they can meet

the world’s 2030 needs.

Source of the Chart: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat

However, they do acknowledge that

government and businesses can play a

supportive role by promoting the value

of their industry to the rest of the state

and by providing safety net systems to

help them deal with the vagaries of

weather and increasingly volatile

markets.

(plus several other ways already outlined in this report)

When asked, their preference is for

government to “just get out of the way”

and let them produce and sell to local, domestic and world markets.


Build the Base – Responsibilities

Increase the production of established Iowa commodities, both crop and livestock.


Facilitate approval and adoption of technologies that

will increase yields without depleting or compromising

resources.

USDA

Congress, Iowa Secretary of Ag, ISU, Ag

& Commodity Organizations, Ag

Producers

Promote and utilize livestock manure as a valuable,

natural, locally-produced source of nitrogen and

organic matter.

Iowa Secretary of Ag

USDA, Iowa Legislature, IDALS, ISU, Ag

& Commodity Organizations, Ag

Producers, SWCDs, Coalition to Support

Farmers

Capitalize on Iowa’s competitive advantage for

livestock production and establish a ‘Protein Pro

Team’ approach to promoting responsible growth in

the sector.

Ag & Commodity Organizations Ag Producers

Adopt a pro-active, self-regulating attitude in order to

prevent problems.Ag Producers Ag & Commodity Organizations

Encourage and assist local communities that want to

attract and support local livestock production and food

processing.

I-PEP IDALS

Mitigate concerns/conflicts that arise from erroneous

perceptions or cavalier attitudes.Coalition to Support Farmers Other Organizations, SWCDs

Prevent the need for subsidy programs by providing

access to revenue insurance, loan guarantees, etc.Congress USDA, Iowa Governor

Recognize the debt and equity capital needs of

commodity producers, and processors that source

commodities, caused by increasingly volatile market

cycles.

LendersUSDA, Congress, Iowa Governor, Iowa

Secretary of Ag, Businesses








Reco

mm

end

ation

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Expand Exports

Lead the US in export of basic commodities and processed bio

products due to Iowa’s great productivity and even greater

reputation for high quality production and processing.

Strateg

y

Expand Exports



Lead efforts to open markets for Iowa commodities and value-

added products.

Reco

m.

Expand Exports

Strateg

y

• Influence US Administration to swiftly negotiate pending and future Free Trade

Agreements.

• Explore opportunities to pursue direct market arrangements between Iowa

producers and processors with potential foreign customers .

• Capitalize on Iowa’s ‘brand’ for quality and dependability: promote Iowa

products as high quality, safe and beneficial.

• Support crop and livestock health protection systems and tools that prevent

contracting and spreading diseases that will close markets.

Actio

ns

Expand Exports


Expand Export - Rationale

Lead efforts to open markets for Iowa commodities and value-added products.

Because Iowa agriculture produces so much more than it

consumes, export markets are crucial. Iowa commodities

carry a reputation of quality and dependable, sustainable

production, so they are sought from around the world. Value

added products are increasingly a part of the export mix, and

many of those interviewed indicated that they should be an

even higher proportion of the mix.

.To illustrate the importance of

opening markets, the three

countries for which the US

Congress just passed trade

agreements represent nearly $3

billion of additional agricultural

exports. Soybeans, soybean

products and livestock products will benefit greatly, as will Iowa.

Sources: USDA, Economic Research Service using in the World Trade Organization Regional Trade Agreements;

Agriculture in Pending U.S. Free Trade Agreements with South Korea, Columbia, and Panama

http://www.nationalaglawcenter.org/assets/crs/R40622.pdf


Expand Exports – Responsibilities

Lead efforts to open markets for Iowa commodities and value-added products.


Influence US Administration to swiftly negotiate

pending and future Free Trade Agreements.Iowa Governor

Congress, Iowa Legislature, Iowa

Secretary of Ag

Explore opportunities to pursue direct market

arrangements between Iowa producers and processors

with potential foreign customers.

Iowa Governor Iowa Secretary of Ag

Capitalize on Iowa’s ‘brand’ for quality and

dependability: promote Iowa products as high quality,

safe and beneficial .

Iowa GovernorIowa Secretary of Ag, I-PEP, Ag &

Commodity Organizations, Businesses

Support crop and livestock health protection systems

and tools that prevent contracting and spreading

diseases that will close markets.


Iowa Legislature, IDALS, ISU, Ag &

Commodity Organizations, Businesses,

Ag Producers


Include Iowa-based animal health products and production

systems in promotion efforts, as livestock production continues to

increase globally.

Reco

m.

Expand Exports

Strateg

yA

ction

s

Expand Exports

No specific actions were

developed for this

recommendation.


Expand Exports - Rationale

Include Iowa-based animal health products and production systems in promotion efforts, as

livestock production continues to increase globally.

As developing countries create more of a middle class, they also create a middle class

diet that incorporates more meat protein. Those countries respond by striving to

develop their livestock sector.

Iowa is a leader in the production of animal health knowledge, production systems and

health products. This market will be exploitable for the near future and provide

opportunities for an Iowa niche industry.

Source : Ag Web, Powered by Farm Journal

According to the UN Food and Agriculture Organization,

“Since 1960, global meat production has more than

trebled, milk production has nearly doubled and egg

production has increased by nearly four times”, due

primarily to growth in population and increasing

affluence among growth populations.

http://www.agweb.com/livestock/



Include Iowa-based animal health products and production systems in promotion efforts, as

livestock production continues to increase globally.


Iowa Secretary of Ag I-PEP, Ag & Commodity OrganizationsNo specific actions were developed

for this recommendation.


Promote and market Iowa agriculture and processing knowledge,

expertise and management skills: Knowledge based consulting

for bio fuels processing, food safety, food processing, livestock

production, etc.

Reco

m.

Expand Exports

Strateg

yA

ction

s

Expand Exports


developed for this

recommendation.


Expand Exports - Rationale

Promote and market Iowa agriculture and processing knowledge, expertise and management skills: Knowledge based consulting for bio fuels processing, food safety, food processing, livestock production, etc.

Agriculture leaders and trade negotiators generally focus on creating markets for

commodities and products. However, Iowa has invested a great deal in production

and processing information and expertise. In the 21st century, knowledge based

trade is also of value and Iowa’s assets can be traded successfully in this arena.

Source: Exporter Data Base, ITA, Bureau of Census

Export of Iowa’s non-commodity products and services

Iowa’s products and services were exported to 187

countries in 2006

2,248 companies exported goods from Iowa locations

Of those companies, 81% (1,813) have fewer than 500

employees



Promote and market Iowa agriculture and processing knowledge, expertise and management skills: Knowledge based consulting for bio fuels processing, food safety, food processing, livestock production, etc.


Iowa Secretary of Ag I-PEPNo specific actions were developed

for this recommendation.


• Build on global leadership in value-added products (i.e. bio-fuels, meat and




rural communities.

• Develop infrastructure and systems that support segregation, storage,

movement and marketing of value-added crops and products, specialty crops,

livestock, etc.

Reco

mm

end

ation

s

Add Value

Utilize cutting edge technologies and Iowa’s quality workforce to

convert an abundance of basic commodities and cutting edge

technologies, systems into value-added products.

Strateg

y

Add Value



Build on global leadership in value-added products (i.e. bio-fuels,

meat and other food processing).

Reco

m.

Add Value

Strateg

y

• Support development of biofuels bi-product markets.

• Assure a plentiful supply of base commodities by encouraging the livestock

sector in Iowa.

• Commit to discovery and adoption of food safety technologies and processes

that assure consumer confidence.

• Recruit new food processing businesses to the state.

• Encourage branded products built on quality and unique, value-added

attributes.

Actio

ns

Add Value


Add Value - Rationale

Build on global leadership in value-added products (i.e. bio-fuels, meat and other food

processing).

By providing 26 percent of US ethanol production, Iowa is producing more ethanol than any other

country besides Brazil (chart below). Also, food processing is the largest component of Iowa’s

manufacturing base. So, adding value to Iowa’s base commodities is a proven model, and building

on that success will meet projected global demand while adding jobs and tax base at the source.

Sources: Ethanol 2020 – Global Market Survey, Next Generation Trends, and Forecast, Multi-Client Study,

Emerging Markets Online, 2008; U.S. Bureau of Economic Analysis, 2009 and Iowa Workforce Development, 2010

Iowa is home to 27 of the largest 100 food

manufacturers/processors. (Food Processing

Magazine, 2010)

The food industry is a major component of

Iowa’s overall economy contributing almost six

billion to the state’s Gross Domestic Product

(GDP), representing approximately 24 percent

of Iowa’s manufacturing GDP and employing

more than 50,000 Iowans.


Add Value – Responsibilities

Build on global leadership in value-added products (i.e. bio-fuels, meat and other food

processing).


Support development of biofuels bi-product markets. I-PEPIowa Secretary of Ag, IDALS, ISU, Ag &

Commodity Organizations, Businesses

Assure a plentiful supply of base commodities by

encouraging the livestock sector in Iowa.Iowa Secretary of Ag

IDALS, I-PEP, Ag & Commodity

Organizations, Ag Producers, Coalition to

Support Farmers

Commit to discovery and adoption of food safety

technologies and processes that assure consumer

confidence.

ISU Businesses

Recruit new food processing businesses to the state. I-PEP

Iowa Governor, Iowa Secretary of Ag,

IDALS, Ag & Commodity Organizations,

Businesses

Encourage branded products built on quality and

unique, value-added attributes.IDALS Businesses, I-PEP, ISU


Add value to the value-added and build on the success of Iowa

businesses.

Reco

m.

Add Value

Strateg

y

• Identify opportunities for adding value to products and bi-products and target

those opportunities in promotional efforts.

• Recruit businesses that can locate near Iowa’s ethanol plants and process co-

products.

• Encourage Iowans to invest in businesses that are adding value to local

commodities and providing economic activity in their communities through

investment income tax policy.

Actio

ns

Add Value



Add value to the value-added and build on the success of Iowa businesses.

Throughout agriculture processing, there are captivating examples of bi-products or waste

products being transformed into needed, beneficial products that are sometimes more

valuable on the market than the product from which it was ‘cast off’.

In ideal instances, Iowa manufacturers and processors attract “over the fence” co-processors .

. . . businesses that tap into a stream of bi-products from the original plant and establish a

viable business ‘right next door’. With aggressive recruitment and innovative processes, Iowa

will be able to build ‘clusters’ of value-generators in rural locations.

Source: Cluster Manufacturing: A Supply Chain Perspective, Cognizant



Add value to the value-added and build on the success of Iowa businesses.


Identify opportunities for adding value to products and

bi-products and target those opportunities in

promotional efforts.

I-PEP ISU, Businesses, Innovation Council

Recruit businesses that can locate near Iowa’s

ethanol plants and process co-products.I-PEP

Ag & Commodity Organizations, Rural

Counties/Communities, Ag Producers

Encourage Iowans to invest in businesses that are

adding value to local commodities and providing

economic activity in their communities through


Iowa Legislature Iowa Governor, Iowa Secretary of Ag


Recruit further processing businesses to locate and grow in

Iowa, especially in rural communities.

Reco

m.

Add Value

Strateg

y

• Continually observe trends and keep Iowa in the forefront of capitalizing on

those trends.

• Identify potential for ‘clusters’ and pursue businesses in those sectors.

• Identify and promote communities that have plentiful water supply and

treatment capability for ag and food processing plants.

Actio

ns

Add Value



Recruit further processing businesses to locate and grow in Iowa, especially in rural

communities.

2010 census data indicates that much of rural Iowa continues to

lose population while the state’s population grew by over four

percent.

In a recent response to the census, Keokuk, IA Mayor Tom Marion

reflected a belief held by many rural community leaders:

“The key to getting people back to rural areas, including Keokuk, is

jobs . . . .that's what it's all about with any community, whether it's

small or large, if you don't have the jobs people aren't going to

stay there.”

Processing, and further processing, of Iowa’s basic commodities

seems to be a logical fit for creating rural Iowa jobs, but nothing

happens without leadership, recruitment and hard work. For

agriculture production and support businesses, having further

processing businesses in rural areas means additional part or full

time jobs for farmers and family members.



Recruit further processing businesses to locate and grow in Iowa, especially in rural

communities.


Continually observe trends and keep Iowa in the

forefront of capitalizing on those trends.I-PEP

ISU, Ag & Commodity Organizations,

Businesses, Ag Producers

Identify potential for ‘clusters’ and pursue businesses

in those sectors.Businesses

Iowa Secretary of Ag, I-PEP, Rural


Identify and promote communities that have plentiful

water supply and treatment capability for ag and food

processing plants.

Regional Economic Development

Organizations

I-PEP, IDALS, Rural



Develop infrastructure and systems that support segregation,

storage, movement and marketing of value-added crops and

products, specialty crops, livestock, etc.

Reco

m.

Add Value

Strateg

y

• Assess the cost vs. benefit of affecting change in the system and determine

advisability.

• Encourage use of technologies that facilitate crop to market systems in order to

avoid costly changes.

• Facilitate changes in the current system that have the potential to benefit

consumers and a full spectrum of production.

Actio

ns

Add Value



Develop infrastructure and systems that support segregation, storage, movement and

marketing of value-added crops and products, specialty crops, livestock, etc.

The current crop movement and storage system, prevalent throughout the Midwest, accommodates #2

yellow corn and #2 yellow soybeans plus a few other bulk commodities. While the system is very

efficient, it has become, essentially, an obstacle to efficiently marketing large quantities of other crops

and products.

For example, international marketers find that there is a market for Iowa grown #1 yellow corn.

However, the current system does not allow efficient delivery of #1, and available alternatives add too

much cost for producers to capture the customers’ extra payment for the quality they want. Also,

identity preserved crops that may be used to produce more beneficial foods and consumer products

cannot be segregated and delivered efficiently enough to meet a price point where consumers are

willing to pay and farmers can benefit. And the current system makes it more difficult for new and/or

locally grown products to grow a meaningful market.

A comprehensive study of the costs/benefits of changing, or

adapting, the current system would help guide policy makers,

businesses and producers as they identify opportunities for

cost-effective, technology driven changes that will create a

system that’s more consumer-responsive and helps Iowa

farmers profit from emerging opportunities.



Develop infrastructure and systems that support segregation, storage, movement and

marketing of value-added crops and products, specialty crops, livestock, etc.


Assess the costs vs. benefit of affecting change in the

system and determine advisability.ISU

Iowa Secretary of Ag, IDALS, Ag &


Ag Producers

Encourage use of technologies that facilitate crop to

market systems in order to avoid costly changes.ISU Businesses, Ag Producers

Facilitate changes in the current system that have the

potential to benefit consumers and a full spectrum of

production.

BusinessesIowa Secretary of Ag, Ag & Commodity

Organizations, Ag Producers

Secondary StrategiesIncluding Recommendations, Actions, Rationales and Responsibilities





Upper Mississippi and Illinois rivers authorized in the 2007 Water Resources

Development Act.








Reco

mm

end

ation

s


Build a healthy mix of transportation systems that give producers,

processors, manufacturers and input providers the options they

need for competitive pricing and market access flexibility. Costs to

move Iowa’s products to national and world markets are as low as

any competing state or country.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure




Influence Congress to appropriate funding for lock expansion

projects on the Upper Mississippi and Illinois rivers authorized in

the 2007 Water Resources Development Act.

Reco

m.


Strateg

y

• Establish this project as a top priority for Iowa’s (bipartisan) state leadership

and Congressional delegation.

• Provide leadership, through Governor Branstad, to Midwest governors and US

Senators to derive adequate funding.

• Support the increase of the lock and dam system on the Upper Mississippi

River Basin, the improvement/replacement of locks and dams, and the

modification and expansion of other structures and facilities that increase

transportation efficiency.

Actio

ns

Workforce

Soil &

Water

Transportation

Infrastructure


Mississippi River locks and dams, mostly built in the 1930s, allowed the Midwest to

become the global agriculture powerhouse that it is today. However, the aging

system is now dangerously close to causing a mid-planting season or mid-harvest

emergency due to deterioration. A US Army Corps of Engineers proposal to upgrade

the systems was approved by Congress (2007) but has not been funded.

Iowa and other Midwestern states have a great deal to gain from this project, and

the entire country will benefit from the improvement of this major artery of commerce.

Bringing this system into the 21st century will assure Midwest leadership in global

food provision. Also, funding this already-approved project would create both short

term construction and long-term transportation jobs in Iowa.

Improved Transportation Infrastructure - Rationale

Influence Congress to appropriate funding for lock expansion projects on the Upper

Mississippi and Illinois rivers authorized in the 2007 Water Resources Development Act.

Source: Rivers Project, US Army Corps of Engineers

http://www.mvs.usace.army.mil/rivers/locks-dams.html


Improved Transportation Infrastructure - Responsibilities

Influence Congress to appropriate funding for lock expansion projects on the Upper

Mississippi and Illinois rivers authorized in the 2007 Water Resources Development Act.


Establish this project as a top priority for Iowa’s

(bipartisan) state leadership and Congressional

delegation.

Iowa Governor


Secretary of Ag, IDOT, Ag & Commodity


Provide leadership, through Governor Branstad, to

Midwest governors and US Senators to derive

adequate funding.

Iowa Governor

Support the increase of the lock and dam system on

the Upper Mississippi River Basin, the

improvement/replacement of locks and dams, and the

modification and expansion of other structures and

facilities that increase transportation efficiency.

Iowa Governor


Secretary of Ag, IDOT, Ag & Commodity




Assure that the Missouri River is maintained as a viable option

for commercial movement of western Iowa commodities and

related products into the extensive US inland waterway system

and global markets.

Reco

m.


Strateg

y

• Join other affected states to bring pressure to bear on policy makers and the

US Army Corps of Engineers to prioritize flood control and commercial use of

the river.

• Oppose changes to Army Corps of Engineers river operations that lead to

reduced navigation, reduced flood control measures or spring rises.

Actio

ns

Workforce

Soil &

Water

Transportation

Infrastructure



Assure that the Missouri River is maintained as a viable option for commercial movement of western Iowa commodities and related products into the extensive US inland waterway system and global markets.

As the number of intense rain events in the Midwest and Plains states trends higher, flood

control along the Missouri River becomes an ever greater priority. This summer, governors of

seven Missouri River states, including Governor Branstad, requested the US Army Corps of

Engineers to provide recommendations for greater flood protection in the Missouri River basin.

Also, commercial use of the Missouri River is an important transportation option. It will help

move the projected increase in production and processing, especially from western Iowa, to the

Mississippi River export conduit more efficiently. And it will relieve some of the stress the

projected increases will put on other transport options.

Source of the picture: USDA

http://2.bp.blogspot.com/-NvNHHnraSv8/TgQUS15BVqI/AAAAAAAAAe8/tn_2Qi3FJOM/s1600/USDA+Photo+of+



Assure that the Missouri River is maintained as a viable option for commercial movement of western Iowa commodities and related products into the extensive US inland waterway system and global markets.


Join other affected states to bring pressure to bear on

policy makers and the US Army Corps of Engineers to

prioritize flood control and commercial use of the river.

Iowa Governor

Oppose changes to Army Corps of Engineers river

operations that lead to reduced navigation, reduced

flood control measures or spring rises.

Iowa Governor

Iowa Legislature, Iowa Secretary of Ag,

IDOT, Ag & Commodity Organizations, Ag

Producers



Plan for projected increases in Iowa crop and livestock

production, food and fuel processing and manufacturing, and

resultant truck traffic increases.

Reco

m.


Strateg

y

• Encourage each Iowa county to maintain necessary farm-to-market roads and

to close roads and bridges that are no longer essential.

• Increase funding for rural roads and bridges via an agreed revenue stream.

• Assure adequate maintenance and rebuilding, when necessary, of interstate

highways.

• Develop a state highway plan that provides the necessary capacity, and assure

its implementation before it is needed.

Actio

ns

Workforce

Soil &

Water

Transportation

Infrastructure



Plan for projected increases in Iowa crop and livestock production, food and fuel processing

and manufacturing, and resultant truck traffic increases.

While Iowa ranks 30th in population among the 50 states, it ranks fifth in the

number of bridges and 13th in the number of miles of road, and the rural

population continues to shift to metropolitan areas. As rural Iowa population

and home sites decline, fewer miles of rural roads and fewer bridges may be

necessary.

However, rural roads and bridges are key to efficient production and marketing

of agriculture commodities and processed products. So, farmers and

agriculture businesses will seek proactive involvement in county-level

comprehensive planning processes that include all vested interests, including

neighboring counties.

Also, Iowa’s interstate highways create a comparative advantage for moving

agriculture commodities and processed products to further processing and

consumer markets, so they are a critical asset that producers, processors and

businesses indicate must be maintained and protected.

Source: Iowa population shift from rural to urban, USA Today | Census, 2011

http://www.usatoday.com/news/census/index



Plan for projected increases in Iowa crop and livestock production, food and fuel processing

and manufacturing, and resultant truck traffic increases.


Encourage each Iowa county to maintain necessary

farm-to-market roads and to close roads and bridges

that are no longer essential.

Ag ProducersAg & Commodity Organizations, Rural


Increase funding for rural roads and bridges via an

agreed revenue stream.

Iowa Legislature, Ag & Commodity

Organizations

Ag Producers, Rural


Assure adequate maintenance and rebuilding, when

necessary, of interstate highways.Congress

Iowa Legislature, IDOT, Ag & Commodity

Organizations

Develop a state highway plan that provides the

necessary capacity, and assure its implementation

before it is needed.

IDOT Iowa Legislature



Assure adequate freight rail line capacity, access and provider

options to serve agricultural production and processed product

rail needs.

Reco

m.


Strateg

y

• Encourage adequate financial resources be employed, when necessary, for the

development of viable inter and intra-state railroads.

• Identify strategic agricultural rail routes and collaborate with inter-state rail

companies to maintain and develop lines to support value-added agricultural

business opportunities.

• Collaborate with regional rail companies to ensure cost-effective connections to

access export growth markets via Pacific Northwest ports. Sustain already

established rail routes to national and export markets.

Actio

ns

Workforce

Soil &

Water

Transportation

Infrastructure



Assure adequate freight rail line capacity, access and provider options to serve agricultural

production and processed product rail needs.

According to many interviewees, loss of rail service creates severe economic hardship in

strategic areas of Iowa, so they stress the crucial nature of rail service for Iowa’s rural economy

and agriculture related businesses.

Freight rail access will become even more important as global customer demand increases and

Iowa production and processing responds by increasing to meet demand. And since the

source of greatest global demand is shifting to Asia, the state’s rail system may be incentivized

to shift to or add service to the West coast, possibly impacting current service to established

foreign and domestic markets.

Photo Source: The Infrastructurist: America Under Construction

http://www.infrastructurist.com/wp-content/uploads/3194744389_4a62759d8c-300x199.jpg



Assure adequate freight rail line capacity, access and provider options to serve agricultural

production and processed product rail needs.


Encourage adequate financial resources be employed,

when necessary, for the development of viable inter

and intra-state railroads.

IDOT

Iowa Governor, Iowa Secretary of Ag, Ag

& Commodity Organizations, Businesses,

Congress

Identify strategic agricultural rail routes and collaborate

with inter-state rail companies to maintain and develop

lines to support value-added agricultural business

opportunities.

IDOT, Businesses Ag & Commodity Organizations

Collaborate with regional rail companies to ensure

cost-effective connections to access export growth

markets via Pacific Northwest ports. Sustain already

established rail routes to national and export markets.


BusinessesIDOT





agriculture and processing.

Reco

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end

ation

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Create opportunities in the bio economy that encourage the best

and brightest to remain in Iowa and become involved in aspects of

the broad agriculture field. Educate and prepare Iowans to take

leadership roles, advancing technology and developing

innovations that improve Iowa’s agriculture production and

processing sectors. Assure that there is enough available labor to

meet needs.

Strateg

y

Workforce

Soil &

Water

Transportation

Infrastructure




Educate, recruit, attract and retain a workforce with knowledge of

and passion about production agriculture, processing and the

businesses that serve agriculture and processing.

Reco

m


Strateg

y

• Build and provide education and training programs that are relevant, efficiently

managed and focused on future needs, such as food safety tech, food

processing, biofuel engineering and fermentation manufacturing, etc.

• Support Iowa STEM initiative and provide biosciences expertise for program

development.

• Coordinate community colleges’ training, statewide, for both agriculture


• Provide extension programming, applied research and undergraduate

curriculum to support new opportunities in agriculture, such as production for

niche markets and bio-energy production.

• Achieve adequate levels of applicants for ag production and processing jobs by

developing a program to recruit legal immigrants who want to work in ag

production and ag/food processing sectors – attract the ’cream of the crop’ to

Iowa.

Actio

ns

Workforce

Soil &

Water

Transportation

Infrastructure


Most Iowans are educated for and seek higher-

paid, ‘cleaner’ jobs than those found in production

agriculture and processing. Iowa has the third

highest graduation rate – 87.2% in 2009 - in the

nation and continually ranks in the top three for

ACT and SAT scores. These graduates are

qualified to provide management, research and

information tech jobs in the new bio economy.

However, for Iowa to maintain its leadership in

production and processing, a plentiful supply of

people wanting to work on farms and in plants will

be essential.

Qualified, Adequate Workforce - Rationale

Educate, recruit, attract and retain a workforce with knowledge of and passion about

production agriculture, processing and the businesses that serve agriculture and processing.

Source: Wells

As Iowa focuses its efforts and policies on increasing its global role and

influence in agriculture, education in science, technology, engineering and

math - and specific agriculture fields, at all levels - become even more

important. Initiatives should be targeted, relevant, efficiently managed and

focused on future needs, such as food safety tech, food processing, biofuel

engineering and fermentation manufacturing, etc.

http://www.wellsenterprisesinc.com/Default.aspx


Qualified, Adequate Workforce - Responsibilities

Educate, recruit, attract and retain a workforce with knowledge of and passion about

production agriculture, processing and the businesses that serve agriculture and processing.


Build and provide education and training programs that

are relevant, efficiently managed and focused on future

needs, such as food safety tech, food processing,

biofuel engineering and fermentation manufacturing,

etc.

ISU Other Universities, Community Colleges

Support Iowa STEM initiative and provide biosciences

expertise for program development.Businesses Ag & Commodity Organizations

Coordinate community colleges’ training, statewide,

for both agriculture production and processing.Community Colleges IDE

Provide extension programming, applied research and

undergraduate curriculum to support new opportunities

in agriculture, such as production for niche markets

and bio-energy production.

ISU

Achieve adequate levels of applicants for ag production

and processing jobs by developing a program to recruit

legal immigrants who want to work in ag production

and ag/food processing sectors – attract the ’cream of

the crop’ to Iowa.


BusinessesI-PEP, Ag Producers, Businesses

Develop and implement professional production and

processing certificate programs.ISU

Community Colleges, Ag & Commodity

Organizations, Businesses, Ag Producers

Provide professional development programs that keep

Iowa farmers and businesses ahead of their

competition.

ISUCommunity Colleges, Ag & Commodity

Organizations, Businesses, Ag Producers


• Convince Iowa businesses and those considering locating or investing here

that Iowa is “Open for Business” and is ready to help resolve problems or


• Support the new Iowa Partnership for Economic Progress (I-PEP) and its

public-private approach to economic development. Assure the new system is

supportive of a bio based economy and that its needs are prioritized.

• Assure broadband transmission is available to Iowa communities for use by

agriculture businesses, processing businesses, input providers and assure the

integrity of satellite transmissions to GPS receivers.

Reco

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Develop a reputation for a progressive and supportive form of

government economic development that helps established

businesses resolve problems and new businesses more easily

establish, grow, and prosper. Create a business climate that

encourages commodity processing and further processing

businesses to start in Iowa, come to Iowa and create Iowa jobs.

Strateg

y

Improve

Business Climate


Regulations & Taxes



Convince Iowa businesses and those considering locating or

investing here that Iowa is “Open for Business” and is ready to

help resolve problems or share opportunities.

Reco

m.


Strateg

y

Improve

Business Climate

• Create a “business concierge” service, either government-based or private

sector, that provides one-on-one specific assistance to both established Iowa

businesses and those considering locating in Iowa as they navigate

government requirements and incentives.

• Provide a flexible, responsive business, government and social environment

where currently unimagined value-added businesses may establish and

flourish.

• Encourage foreign investment in Iowa-based agricultural research, production,

and processing.

Actio

ns


Regulations & Taxes


Supportive Business Environment - Rationale

Convince Iowa businesses and those considering locating or investing here that Iowa is

“Open for Business” and is ready to help resolve problems or share opportunities.

Many of the frustrations experienced by producers, processors and agriculture supply businesses in Iowa

could be avoided or reduced through focused, direct contact with people whose job it is to understand

and ‘translate’ government’s requirements, rules and regulations.

An “Easy Button” or a business concierge service was suggested to help them cut through “red tape” - a

one-stop shop that would, among other tasks:

facilitate timely permitting,

arbitrate regulatory compliance disputes,

provide full government information assistance,

schedule tailor-made visits for businesses interested in locating in Iowa,

compile and share information about investment incentives,

provide access to Iowa structural funds,

identify possible business properties,

assist search for potential suppliers/JV/acquisition partners

This one stop shop, or business concierge service, could support government leader efforts to bring

businesses and investors to Iowa. Perhaps most importantly, those providing the service can also provide

timely, relevant feedback to state agencies that can use the input to improve services and programs.

Foreign investment can be encouraged through direct, interpersonal promotions but also through state

incentive programs, such as a revamped, broadened EB-5 program.

®


Supportive Business Environment – Responsibilities

Convince Iowa businesses and those considering locating or investing here that Iowa is

“Open for Business” and is ready to help resolve problems or share opportunities.


Create “business concierge” service, either

government-based or private sector, that provides one-

on-one specific assistance to both established Iowa

businesses and those considering locating in Iowa as

they navigate government requirements and incentives.

I-PEP Iowa Governor, Businesses

Provide a flexible, responsive business, government

and social environment where currently unimagined

value-added businesses may establish and flourish.

I-PEP

Iowa Governor, Iowa Legislature, IDALS,

IDNR, Rural Counties/Communities,

Businesses

Encourage foreign investment in Iowa-based

agricultural research, production, and processing.Iowa Governor I-PEP, Iowa Secretary of Ag, IDALS


Support the new Iowa Partnership for Economic Progress (I-

PEP) and its public-private approach to economic development.

Assure the new system is supportive of a bio based economy

and that its needs are prioritized.

Reco

m.


Strateg

y

Improve

Business Climate

Actio

ns


Regulations & Taxes


developed for this

recommendation.



Support the new Iowa Partnership for Economic Progress (I-PEP) and its public-private approach to economic development. Assure the new system is supportive of a bio based economy and that its needs are prioritized.

Governor Branstad and state legislators worked together this past legislative session to

create a new approach to economic development delivery in the state of Iowa. That led to

the creation of the Iowa Partnership for Economic Progress -- a public-private partnership

that will update and improve Iowa’s economic development services delivery.

The public arm of the new organization is the Iowa Economic Development Authority. It

replaces the former Iowa Department of Economic Development and oversees the

traditional economic development programs. On the private side, the Iowa Innovation

Corporation was created to operate as Iowa's innovation intermediary, assisting existing

Iowa companies in their quest to develop innovative ideas,

products and processes, as well as helping to grow and

develop new products and companies that emanate from

Iowa ideas and research.

Source: Text courtesy of IDED; Image of Proposed Organizational Structure of Iowa Partnership for Economic Progress





Ag & Commodity Organizations

Other Organizations, Rural

Counties/Communities, Businesses, Ag

Producers

No specific actions were developed

for this recommendation


Assure broadband transmission is available to Iowa communities

for use by agriculture businesses, processing businesses, input

providers and assure the integrity of satellite transmissions to

GPS receivers.

Reco

m.


Strateg

y

Improve

Business Climate • Change Iowa’s property tax structure to create equity among broadband

providers and encourage investment in broadband to all of Iowa, emphasizing

rural areas.

• Influence and support federal (FCC) reform of the Universal Services Fund

(USF) by shifting funds away from landlines to broadband services,

encouraging investment in broadband to all of Iowa and emphasizing rural

areas. Continually monitor information technology needs and early access to

keep Iowa ‘ahead of the pack’.

• Monitor and oppose, if necessary, efforts to utilize mobile satellite spectrum for

wireless communications that would compromise the current use of the

spectrum or limit increased use for ag production and business.

• Influence Congress to provide adequate spectrum access necessary for

growth in the use of remote sensors and GPS positioning for production

agriculture and commodity processing systems.

Actio

ns


Regulations & Taxes



Assure broadband transmission is available to Iowa communities for use by agriculture businesses, processing businesses, input providers and assure the integrity of satellite transmissions to GPS receivers.

The ability to transmit large quantities of data and to use Global

Positioning Systems (GPS) without interruption is growing in

importance for modern agriculture production and support

businesses, as well as many processing entities.

Because Iowa is a relatively low population state, commercially

provided support is not always readily available but can be

encouraged through tax policy and FCC policy changes.

As producers continue to adopt remote sensor and GPS

technology, they and their input suppliers will have an increasing

need for access to the satellite spectrum that is currently limited by

the federal government and under increasing pressure from

mobile phone communications.



Assure broadband transmission is available to Iowa communities for use by agriculture businesses, processing businesses, input providers and assure the integrity of satellite transmissions to GPS receivers.


Change Iowa’s property tax structure to create equity

among broadband providers and encourage investment

in broadband to all of Iowa, emphasizing rural areas.

Iowa Legislature Iowa Governor, I-PEP, Innovation Council

Influence and support federal (FCC) reform of the

Universal Services Fund (USF) by shifting funds away

from landlines to broadband services, encouraging

investment in broadband to all of Iowa and

emphasizing rural areas. Continually monitor

information technology needs and early access to

Congress Iowa Governor, Innovation Council

Monitor and oppose, if necessary, efforts to utilize

mobile satellite spectrum for wireless communications

that would compromise the current use of the

spectrum or limit increased use for ag production and

business.

Ag & Commodity OrganizationsCongress, Iowa Secretary of Ag,


Influence Congress to provide adequate spectrum

access necessary for growth in the use of remote

sensors and GPS positioning for production agriculture

and commodity processing systems.

Ag & Commodity OrganizationsIowa Secretary of Ag, Businesses, Ag

Producers


• Create a climate for innovation in agriculture, food, fiber, f(ph)armaceutical and



Reco

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Strive to make Iowa known for its culture of innovation and

technology development, and develop valuable support systems

for both. Once those systems are firmly in place, protect them for

use by Iowa’s business, academia and government leaders.

Support entrepreneurism with actions that help translate

innovation into increased economic activity.

Strateg

y

Encourage

Innovation





Create a climate for innovation in agriculture, food, fiber,

f(ph)armaceutical and renewable fuel businesses, and in the

supporting sciences.

Reco

m.


Strateg

y

• Build Iowa’s reputation as a hotbed of innovation.

• Support growth of innovative businesses and activities already rooted in Iowa.

• Recruit innovative businesses, particularly those in the agriculture sector.

• Identify and eliminate any unnecessary laws and regulations that stifle or slow

adoption and utilization of technologies. Avoid passage of such

laws/regulations in the future.

• Sponsor a competition and significant award for best annual innovation that

benefits Iowa’s agriculture, agri-business, food processing, bio fuel sectors or

other, related sectors.

• Sponsor agriculture, renewable energy and food processing conferences that

bring the most innovative businesses to the state.

• Actively support and encourage the new Iowa Innovation Council and assure

bio economy based input for its strategy and resultant programs.

• Establish Iowa as a leader in the development of food safety technologies,

systems and businesses that will serve the growing global demand for safe

food supplies.

Actio

ns

Encourage

Innovation




Innovation Reputation - Rationale

Create a climate for innovation in agriculture, food, fiber, f(ph)armaceutical and renewable

fuel businesses, and in the supporting sciences.

Innovation in agriculture production drives the

increases in efficiencies and production levels that

allow US consumers to enjoy relatively low food

costs and a wide variety of food products.

Innovation also provides consumers with

renewable fuel options, improved natural fibers

and pharmaceuticals developed from plants.

However, those interviewed for this project

expressed concern about a lack of public support

for research and development of innovations and

a growing resistance to adoption of innovations in

the food and agriculture sectors.


Innovation Reputation – Responsibilities

Create a climate for innovation in agriculture, food, fiber, f(ph)armaceutical and renewable

fuel businesses, and in the supporting sciences.


Build Iowa’s reputation as a hotbed of innovation. Innovation Council Iowa Governor, I-PEP, Businesses, Media

Support growth of innovative businesses and activities

already rooted in Iowa.I-PEP Iowa Governor

Recruit innovative businesses, particularly those in the

agriculture sector.I-PEP

Iowa Governor, Ag & Commodity

Organizations, Iowa Secretary of Ag

Identify and eliminate any unnecessary laws and

regulations that stifle or slow adoption and utilization

of technologies. Avoid passage of such


Iowa Legislature Iowa Governor, IDALS, I-PEP, IDNR

Sponsor a competition and significant award for best

annual innovation that benefits Iowa’s agriculture, agri

business, food processing, bio fuel sectors or other,

related sectors.

Innovation Council Iowa Governor, Iowa Secretary of Ag

Sponsor agriculture, renewable energy and food

processing conferences that bring the most innovative

businesses to the state.


Iowa Governor, Ag & Commodity

Organizations, Businesses, Innovation

Council

Actively support and encourage the new Iowa

Innovation Council and assure bio economy based

input for its strategy and resultant programs.

Ag & Commodity OrganizationsIowa Secretary of Ag, Businesses, Ag

Producers

Establish Iowa as a leader in the development of food

safety technologies, systems and businesses that will

serve the growing global demand for safe food supplies

.

ISUIowa Governor, Iowa Legislature, Iowa

Secretary of Ag, Businesses


Encourage and support entrepreneurism.

Reco

m.


Strateg

y

• Identify, develop and create an entrepreneurial talent pool that is coordinated

across the state, interacts with various regional organizations and is committed

to entrepreneurial development within the state of Iowa.

• Attract investment capital by positioning Iowa as the “Bio-Capital” of North

America through progressive state-backed programs, developed in conjunction

with private industry.

• Link mentorship to investment.

• Identify and recruit management with entrepreneurial or start-up experience

and match business organizational needs with commercial management

expertise.

• Develop business talent by working with experienced entrepreneurial groups

and universities, develop entrepreneurial programs and reality based

curriculums utilizing a synergistic pool of academia, entrepreneurs and

entrepreneurial development groups.

Actio

ns

Encourage

Innovation




Innovation Reputation - Rationale


Entrepreneurism is a bedrock element in the success of Iowa’s agriculture and related sectors. Encouraging and supporting entrepreneurism in 21st century initiatives should lead to increased economic activity. The challenge is discovering and applying the most effective support to entrepreneurism, but the chosen methods should include:

Stimulating economic thinking skills

Encouraging creative, intelligent risk-taking

Providing practical business experience

Rewarding independence and personal responsibility

Photo Source: Courtesy of Becker Underwood


Innovation Reputation – Responsibilities



Identify, develop and create an entrepreneurial talent

pool that is coordinated across the state, interacts

with various regional organizations and is committed

to entrepreneurial development within the state of

Iowa.

I-PEPAg & Commodity Organizations,

Businesses

Attract investment capital by positioning Iowa as the

“Bio-Capital” of North America through progressive

state-backed programs, developed in conjunction with

private industry.

Iowa Governor, I-PEPAg & Commodity Organizations,

Businesses

Link mentorship to investment. Businesses

Identify and recruit management with entrepreneurial

or start-up experience and match business

organizational needs with commercial management

expertise.

Businesses

Develop business talent by working with experienced

entrepreneurial groups and universities, develop

entrepreneurial programs and reality based

curriculums utilizing a synergistic pool of academia,

entrepreneurs and entrepreneurial development

groups.

Businesses ISU, Other Universities







investment capital.

Reco

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ation

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Nurture the New

Embrace diversity in agriculture production to provide food and

other agriculture products for a variety of markets, especially

Iowans who prefer locally-sourced and/or organic foodstuffs.

Strateg

y

Nurture

the New



Provide an environment in which non-traditional ideas, farming

operations and businesses may establish a foothold and grow.

Reco

m.

Nurture the New

Strateg

y

• Include the full diversity of Iowa production and processing in government,

university and organization programs.

• Provide arbitration for controversial situations or circumstances that arise

between existing and non-traditional production methods.

• Facilitate transfer of beneficial techniques, information and systems that are

developed by non-traditional producers and processors that can be adapted

and adopted by traditional producers and processors.

• Encourage institutions to incorporate local production into their food service

menus.

• Encourage producers to raise differentiated crops that are grown for specific

traits and contracted directly by the customer to limit risk.

Actio

ns

Nurture

the New


Nurture the New - Rationale

Provide an environment in which non-traditional ideas, farming operations and businesses

may establish a foothold and grow.

Diversity is a concept that surfaced early in this project and maintained

consistent importance.

Most interviewed believe that there is room for a wide variety of production types

and processes in Iowa and that they should be encouraged. It was stressed

that the keys to successful diversification are:

acceptance of other systems

working with neighbors and other

producers to resolve problems

sharing knowledge and best practices to

benefit all products and systems

Photo Source: Courtesy of Niman Ranch


Nurture the New – Responsibilities

Provide an environment in which non-traditional ideas, farming operations and businesses

may establish a foothold and grow.


Include the full diversity of Iowa production and

processing in government, university and organization

programs.

IDALS, ISU

Iowa Legislature, Iowa Secretary of Ag, I-

PEP, Other Universities, Community

Colleges

Provide arbitration for controversial situations or

circumstances that arise between existing and non-

traditional production methods.

new organization or system IDALS, Coalition to Support Farmers

Facilitate transfer of beneficial techniques, information

and systems that are developed by non-traditional

producers and processors that can be adapted and

adopted by traditional producers and processors.

ISUIDALS, Ag & Commodity Organizations,

Ag Producers

Encourage institutions to incorporate local production

into their food service menus.Local production advocacy groups

Encourage producers to raise differentiated crops that

are grown for specific traits and contracted directly by

the customer to limit risk.

Businesses


Review the needs of new, innovative agriculture production and

processing and prioritize efforts to help with those needs.

Reco

m.

Nurture the New

Strateg

y

• Host web-based forums and an annual attendance forum where non-traditional

producers and processors may network and share concerns, seek solutions.

• Focus ISU extension service work on helping start-ups, especially those

growing non-traditional crops or accessing their market in new ways.

Actio

ns

Nurture

the New



Review the needs of new, innovative agriculture production and processing and prioritize

efforts to help with those needs.

Many producers of ‘new to Iowa’ products, commodities or systems benefit from

advice and guidance. However, because they are often on the ‘cutting edge’ of their

particular business, they often find themselves spending a great deal of their limited

time searching for sources of business and production information.

Quite a bit of that information is directly available

on the internet, but more tailored guidance can be

derived through Iowa’s Cooperative Extension

Service and local economic development

channels.

Networks and forums are especially valuable.

Producers and processors often learn best from

each other, both new ideas and the ‘nuts and

bolts’ of their particular business.



Review the needs of new, innovative agriculture production and processing and prioritize

efforts to help with those needs.


Host web-based forums and an annual attendance

forum where non-traditional producers and processors

may network and share concerns, seek solutions.

ISUIowa Secretary of Ag, IDALS, Ag &

Commodity Organizations

Focus ISU extension service work on helping start-

ups, especially those growing non-traditional crops or

accessing their market in new ways.

ISU


Assist ‘new to Iowa’ production and processing in their efforts to

access investment capital.

Reco

m.

Nurture the New

Strateg

y

• Define parameters for successful solicitation of investment capital.

• Help those interested develop approved business plans, etc.

• Open doors with investment funds and individual investors.

Actio

ns

Nurture

the New



Assist ‘new to Iowa’ production and processing in their efforts to access investment capital.

While there is general agreement that funding is available for good ideas with good

business plans, there is also general agreement that those who would like to pursue

different production, processing or food-to-market systems do not have the

background they need in business management and marketing.

Assistance in those areas will help ‘new to Iowa’ producers and food, fuel and

f(ph)arma achieve success levels that give them a better chance of growing a viable

business in Iowa.

Examples of ISU’s Leopold Center support for alternative production methods

and markets:

Iowa Local Food & Farm Plan

Life Cycle Assessment of Commodity and Niche Swine Production Systems

http://www.leopold.iastate.edu/sites/default/files/pubs-and-papers/2011-01-iowa-local-food-and-farm-plan.pdf

http://www.leopold.iastate.edu/sites/default/files/pubs-and-papers/2010-09-life-cycle-assessment-commodity-and-niche-swine-production-systems.pdf



Assist ‘new to Iowa’ production and processing in their efforts to access investment capital.


Define parameters for successful solicitation of

investment capital.I-PEP Businesses

Help those interested develop approved business

plans, etc.I-PEP Community Colleges

Open doors with investment funds and individual

investors.Iowa Secretary of Ag I-PEP, Businesses


• Lead campaign to increase the size and scope of Iowa agriculture.

• Achieve effective collaboration between agriculture and related sectors by

encouraging formation of an organization or system that becomes a foundation

for cooperation and issue prioritization across Iowa’s diverse agriculture sector.

Reco

mm

end

ation

s

Leadership


Leadership

Iowa’s government, business and association leaders believe in

the importance of agriculture and associated sectors to Iowa’s

economy and align their efforts to maintain growth. They are

supported in their efforts by a cohesive industry that sets priorities

and proves itself worthy of leadership’s efforts.

Strateg

y


Lead campaign to increase the size and scope of Iowa

agriculture.

Reco

m.

Leadership

Strateg

y

• Embrace production agriculture as an Iowa tradition, strength and base for

future growth.

• Use Iowa’s productive resources and 21st century innovative technologies to

create clean sought-after jobs and economic activity.

• Use campaign as a method of drawing attention to Iowa’s assets.

• Actively recruit bio processing and bio businesses to the state.

• Promote the research and development assets in which Iowa has already

invested and that are poised to support the development of bio-based

innovation and technologies.

• Lead the transition to a bio knowledge economy: one that replaces low profit

manufacturing with science-based, higher profit, innovation-based businesses.

• Invite business leaders for ‘reverse trade missions’ to Iowa communities that

are ready for and eager to site bio based businesses.

Actio

ns

Leadership


Leadership - Rationale

Lead campaign to increase the size and scope of Iowa agriculture.

Governor Branstad has often demonstrated his support for Iowa’s agriculture sector, and those

we interviewed were enthused, even excited, about the prospect of growing their industry

under his leadership.

Strongest support is for the role he can play as “Cheerleader in Chief”: to reverse the trend of

negative messages and perceptions that portrayed agriculture over the past decade. There

are also great expectations that the Governor will bring reason and consistency to state

regulatory programs and new energy and focus to the state’s economic development efforts.

In short, Governor Branstad is expected to add power to the powerhouse of Iowa agriculture.


Leadership – Responsibilities

Lead campaign to increase the size and scope of Iowa agriculture.


Embrace production agriculture as an Iowa tradition,

strength and base for future growth.Iowa Governor

Iowa Legislature, Iowa Secretary of Ag,

IDALS, I-PEP, IDNR, IDOT, ISU, Other

Universities, Community Colleges, Ag &

Commodity Organizations, Other

Organizations, Rural

Counties/Communities, Businesses, Ag

Producers, Media, Innovation Council,

Lenders, Coalition to Support Farmers

Use Iowa’s productive resources and 21st century

innovative technologies to create clean sought-after

jobs and economic activity.

Businesses

Iowa Governor, Iowa Legislature, Iowa

Secretary of Ag, I-PEP, ISU, Ag &

Commodity Organizations, Ag Producers

Use campaign as a method of drawing attention to

Iowa’s assets.Iowa Governor Iowa Secretary of Ag, I-PEP

Actively recruit bio processing and bio businesses to

the state.Iowa Governor Iowa Secretary of Ag, I-PEP

Promote the research and development assets in

which Iowa has already invested and that are poised

to support the development of bio-based innovation

and technologies.

Iowa GovernorIowa Secretary of Ag, I-PEP, ISU, Other

Universities, Board of Regents

Lead the transition to a bio knowledge economy: one

that replaces low profit manufacturing with science-

based, higher profit, innovation-based businesses.

Iowa GovernorIowa Secretary of Ag, I-PEP, Innovation

Council

Invite business leaders for ‘reverse trade missions’ to

Iowa communities that are ready for and eager to site

bio based businesses.

Iowa GovernorIowa Secretary of Ag, I-PEP, Rural

Counties/Communities, Businesses


Achieve effective collaboration between agriculture and related

sectors by encouraging formation of an organization or system

that becomes a foundation for cooperation and issue

prioritization across Iowa’s diverse agriculture sector.

Reco

m.

Leadership

Strateg

y

• Investigate other effective models, such as the Minnesota Agri Growth Council,

and gain consensus on the best way to provide unified support for the factors

that will “Increase the Size and Scope of Iowa Agriculture”.

• Use selected organization or system to develop consistent, prioritized advice

for government and other public sector institutions as they work to “Increase

the Size and Scope of Iowa Agriculture”.

• Host an annual seminar for Iowa government administration, legislature and

Congressional delegation to learn about the many aspects of agriculture in

Iowa, its impact on the state’s economy and crucial, current issues affecting the

broad spectrum of ‘seed to table or tank’.

Actio

ns

Leadership


Leadership - Rationale

Achieve effective collaboration between agriculture and related sectors by encouraging formation of an organization or system that becomes a foundation for cooperation and issue prioritization across Iowa’s diverse agriculture sector.

Source: Hoksbergen & De Stigter Construction, Inc., Hog Buildings,

Terry Schuiteman, Sioux City, IA

Governor Branstad has embraced great challenges for his new administration, including his goal for agriculture and

its related sectors. Meeting that goal will require support – clear, consistent and consensus – from producers,

organizations and businesses. Several interviewed for this project indicated that consistent, prioritized messages for

the Governor and the Legislature could be achieved through an organization or system that will:

Assure membership is open to anyone interested, from individual farmers

to large corporations and including academia, associations, service

providers, small and large businesses, ag and business media, etc.

Provide a continuing forum for the diverse sectors of Iowa’s agriculture,

food, fuel and services spectrum to identify, discuss, prioritize and

advocate for important issues and projects

Advocate for those issues that have gained consensus from its

membership

Provide arbitration for issues that pit members against members

Sponsor an annual seminar for Iowa government administration,

legislature and Congressional delegation to learn more about the many

aspects of Iowa agriculture, its impact on the state’s economy and

crucial, current issues affecting the broad spectrum of ‘seed to table or tank’

http://www.hoksdsconst.com/our_work.html


Leadership – Responsibilities

Achieve effective collaboration between agriculture and related sectors by encouraging formation of an organization or system that becomes a foundation for cooperation and issue prioritization across Iowa’s diverse agriculture sector.


Investigate other effective models, such as the

Minnesota Agri Growth Council, and gain consensus

on the best way to provide unified support for the

factors that will "Increase the Size and Scope of Iowa

Agriculture".


IDALS, ISU, Ag & Commodity

Organizations, Businesses, Ag

Producers, Coalition to Support Farmers

Use selected organization or system to develop

consistent, prioritized advice for government and other

public sector institutions as they work to "Increase the

Size and Scope of Iowa Agriculture".

new organization or systemAg & Commodity Organizations,


Host an annual seminar for Iowa government

administration, legislature and Congressional

delegation to learn about the many aspects of

agriculture in Iowa, its impact on the state’s economy

and crucial, current issues affecting the broad

spectrum of ‘seed to table or tank’.

Iowa Governor, new organization or

system

Iowa Secretary of Ag, IDALS, I-PEP, Ag &


Ag Producers, Innovation Council

Chapter 4: Situational Analysis


Situational Analysis Contents

• Summary assumptions about the future

• Demand for agricultural products

• Social trends & developments

• Technological trends & developments

• Economic trends & developments

• Environmental trends & developments

• Political/regulatory trends & developments


A STEEP analysis was completed to evaluate the future demand for agricultural products as well as the social, technological, economic, environmental and political trends shaping the future, external environment for Iowa agriculture.

Consumer Demand

Econ

om

ic


Demand for Agricultural Products

• Aggregate growth in the demand for food

increases by 40-50% by 2030 as per capita

income grows and hundreds of millions of

consumers enter the middle class.

• Ninety percent of the growth in the demand for

food over the next 20 years is from developing

countries. China continues to strive for 95% food

self-sufficiency but relaxes this goal for selected

commodities.

• Average daily caloric intake increases 6-8%

globally. Consumption of dairy products,

vegetable oils and meat increases the most.

Social Trends & Developments

• Consumer concern about health & wellness

and the environment continues to grow

globally.

• Food safety remains a priority issue for

consumers and the food value chain.

• Consumers gradually accept biotechnology

as new traits with environmental and health

benefits are introduced.

Agriculture Situational Analysis Summary: Assumptions/Forecasts About the Future (to 2030)


Technological Trends & Developments Economic Trends & Developments

• Agriculture intensifies to meet the increase in

demand for food, but higher input costs and

consumer pressure lead to a major emphasis on

minimizing the use of inputs. Major

improvements in agricultural productivity in

developing countries allows farmers to meet the

global demand for food. Education is critical.

• New technology/services are developed to

optimize input use.

• Use of agricultural materials to produce fibers,

fuels and feedstocks increases after new

processing technology is developed. Non-food

and non-feed products are utilized.

• Rapid adoption of new technology becomes the

norm as information spreads faster, costs decline

quicker and competitive pressures intensify.

• The economic center of gravity shifts eastward

as Asian countries maintain their rapid growth

while western countries struggle to manage

their debt.

• U.S. interest rates climb and retard U.S.

economic growth. U.S. unemployment

averages 6.5-7.5% over the next ten years.

• Energy prices soar due to insufficient

investment in oil production and shortfalls in

capacity to generate electricity (in selected

countries). Oil prices exceed $130/bbl by 2030

and spikes of $175/bbl are conceivable.

• The value of the dollar continues to decline on a

trade-weighted basis assisting U.S. export

performance.

• U.S. labor competitiveness improves as

productivity increases far outstrip wage

increases. Automation and robotics decrease

the importance of labor in many food

processing and manufacturing industries.



Environmental Trends & Developments

Political Trends & Developments

• Weather becomes more variable worldwide

leading to periodic shortages of some

commodities. Food prices continue to be

volatile.

• The growing season becomes longer in Iowa.

New pest pressures begin to appear.

• More variable precipitation, declining water

tables and poor water quality become chronic

issues for countries like China & India.

• Declining soil fertility, water quality and water

availability drive changes towards more

sustainable farming practices (China makes

some of the largest changes).

• Federal support for agriculture declines.

Biofuels incentives are removed except for

fuels produced from non-food and non-feed

commodities.

• New environmental regulations affecting

animal waste, phosphorus, nitrogen and

pesticides are issued.

• Pressure on agriculture from NGO’s

continues.



Long-term Demand for Agricultural Products: Global population grows by 1.4 billion people by 2030 with most of the growth in developing countries. Per capita income surges and the world’s middle class expands by 800 million by 2020.

Global population reaches 8.3 billion in 2030 Sixty-five percent will live in an urban area

Per capita income surges in NIC’s

108%

96%

79%

206%

349%

107%

% Increase

800 million new, middle-class consumers by 2020

Urban Rural

43%

Urban

Source: FAO, How to feed the world in 2050 Source: United Nations

Source: Goldman Sachs


kg/person/year 2000 2030 Change 2000 2030 Change

Cereals, food 165.7 166 0.3 162.4 159 (3.4)

Cereals, all uses 238.0 268 30.0 591.8 641 49.2

Roots & Tubers 67.0 75 8.0 66.7 61 (5.7)

(Developing minus China) 62.8 76 13.2 n.a. n.a. n.a.

Sugar (raw sugar eg.) 20.7 25 4.3 33.1 32 (1.1)

Pulses, dry 6.7 7 0.3 3.6 4 0.4

Veg. oils, oilseeds & products (oil eq.) 10.4 14 3.6 21.5 24 2.5

Meat (carcass weight) 26.7 38 11.3 90.2 99 8.8

(Developing minus China & Brazil) 15.9 25 9.1 n.a. n.a. n.a.

Milk & dairy, excl. butter (fresh milk eq.) 45.2 67 21.8 214.0 223 9.0

Other food (kcal/person/day) 242.0 285 43.0 525.0 565 40.0

Developing Countries Industrial Countries

Average Kcal/person/day increases:

The largest increases are in developing countries:

• Cereals consumption remains about the same per

person with some switching between rice and

wheat.

• Sugar consumption rises modestly.

• The most significant increases are in vegetable oils

followed by meat.

• The % change in food consumption per person will

be about the same in developing & industrial

countries.

• Average food consumption per person in

developing countries is still only 50% of that in

industrialized countries by 2030.

• Increases in cereal consumption will be in non-food

applications.

Observations:

Long-term Demand for Agricultural Products: Average caloric intake increases 7.6% by 2030 globally. Increased consumption of dairy products, meat and vegetable oils provide most of the added calories.

Source: FAO, World agriculture: towards 2015/2030 Summary Report

Source: FAO, World agriculture: towards 2030/2050 Interim Report


STEEP Analysis - Social: Health and wellness and eco-consciousness are greatly influencing consumer lifestyles. Marketers now segment consumers in industrial countries by their attitudes toward their own health and that of the planet.

LOHAS NATURALITES

Grown without pesticides 66% Low cholesterol 57%

Environmentally-friendly packaging 59% Grown without pesticides 55%

Recyclable packaging 57% No trans-fats 54%

Natural 56% Natural 50%

No GM ingredients 56% Low fat 49%

New customer segments in industrial countries:

Food factors important to these segments:

Observations:

• The consumers who are most concerned about the

health of the environment, sustainability, social

responsibility and their own heath are termed LOHAS

consumers (Lifestyles of Health and Sustainability).

• A second segment is called NATURALITES. These

consumers value natural and organic products but

aren’t politically committed to the environmental

movement.

• Marketers estimate these two segments account for

41% of U.S. consumers with a disproportionate

amount of purchasing power and the ability to

influence the overall market.

• Grown without pesticides and natural food are

important factors to both segments.

• LOHAS consumers worry about environmental

issues.

• NATURALITES are very concerned about dietary

fat.

Source: The Natural Marketing Institute Survey, 2005

Source: The Natural Marketing Institute Survey, 2005

Segment Description

LOHAS 16%

LOHAS consumers are dedicated to personal and planetary health.

Not only do they make environmentally friendly purchases, they also

take action – they buy green products, support advocacy programs,

and are active stewards of the environment.

NATURALITES 25%

Focused on natural and organic consumer packaged goods. They

are not politically committed to the environmental movement, nor are

they driven to green and eco-friendly durable goods.

DRIFTERS 23%

This segment has good intentions, but when it comes to behavior,

other factors influence their decision more than the environment.

Somewhat price sensitive (and trendy), they are full of reasons why

they do not make environmentally friendly choices.

CONVENTIONALS 23%

This practical segment does not have “green attitudes”, but they do

have some “municipal” environmental behaviors such as recycling

and energy conservation.

UNCONCERNED 14%

The environment and society are not priorities to this segment. They

are not concerned, and show no environmentally-responsible

behavior.


STEEP Analysis - Social: Consumer attitudes have changed towards agriculture and the entire food value chain. Confidence and trust in the food supply has dropped. Far fewer people have lived on a farm or understand farming.

Confidence in the U.S. food supply:

Food Safety Issue 2010 2008

Disease/contamination 38% 50%

Handling/preparation 33% 29%

Food source 11% 13%

Preservatives/chemicals 10% 6%

Health/nutrition 9% 8%

Agricultural production 9% 7%

Packaging/labeling 5% 3%

Biotech 2% 1%

Processed foods 1% 1%

Other 4% 2%

Most important U.S. food safety concerns:

• Food scares around the world have had a large

impact on consumer attitudes.

• Surveys show this is a common concern in

industrial and industrial-izing countries.

• The largest problems are with fresh foods,

especially animal products.

• Only 18% of the U.S. population is very confident

in the safety of the U.S. food supply.

• Disease/contamination and handling/preparation

were mentioned by a third of consumers as areas

of concern.

• Ten percent were concerned about preservatives/

chemicals and agricultural production.

• Only 2% in this survey mentioned biotech as a

food safety concern.

-10 -10

50 51

18 18

-2-3-20

-10

0

10

20

30

40

50

60

70

80

% o

f R

es

po

nd

en

ts

Very confident

Somewhat confident

Not at all confident

Not very confident

2008 2010

Source: International Food Information Council, Understanding Consumer Perceptions of Food Technology & Sustainability

No Opinion: 19 19



STEEP Analysis - Social: Consumer awareness/knowledge of sustainability is growing globally. Food security is most important but efficient resource utilization isn’t far behind.

U.S. Consumer Awareness of the Sustainable Food Production Concept :

Most important aspects of sustainability to U.S. consumers:

0 10 20 30 40 50 60 70 80

Nothing at all

A little

Some

A lot

% of Respondents

2010

2008

0 10 20 30 40 50 60 70 80 90

Fewer food miles

Lower carbon footprint

Recyclable packaging

Less waste

Maximum output with minimal use of

natural resources

Land and water use and efficiency

Ensuring a sufficient food supply for the

growing global population

Selected f irst

Selected second

• The percentage of the U.S. population that has heard at

least something about sustainable food production

increased from 30% to 50% in the past two years.

• Long-established attitudes towards conservation are

apparent in the aspects of sustainability that are

most important to U.S. consumers.

• Largest concerns are about land, water and natural

resources in general. Concern about climate change

not significant in this survey.




STEEP Analysis - Social: Consumers’ attitudes towards agricultural biotechnology are split. Forty percent or more either don’t know enough about it to offer an opinion or are neutral towards it.

Impressions of Plant Biotechnology: Impressions of Animal Biotechnology:

• U.S. consumers with an unfavorable impression of plant

biotechnology outnumber those with a favorable

impression by a ratio of 3:2.

• In the EU the ratio of unfavorable to favorable would be

2:1.

• Impressions change when environmental (lower water

use) or health benefits (lowered saturated fat) are

mentioned.

• Consumer impressions of animal biotechnology are

more balanced than those towards plant

biotechnology.

• A high percentage can still be influenced one way or

another.

Very

Favorable

10%

Not very

favorable

13%

Favorable

19%

Neutral

24%

Don't know

enough to

form an

opinion

20%

Not at all

favorable

14%

Don't know

enough to

form an

opinion

20%Not favorable

32%

Favorable

19%

Neutral

29%



STEEP Analysis - Social: Consumers in Argentina, China, Germany, the U.S. and the U.K. expect to have a greater say about food ingredients by 2020 in one survey done by a New York-based marketing communications firm.

• Today’s consumers want to have a greater say about food ingredients, safety and quality, and by the year 2020, consumers

around the globe expect the way they choose and shop for food to be different.

• Taste, quality and price are the top considerations in choosing foods – except in China, where health benefits are most

important.

• 65% of consumers want good taste, but they also want to know more about the ingredients in their food.

• 45% of consumers want food companies to take away the temptations that lead to obesity . . . but they don’t want to eat less.

• 44% of consumers say that knowledge, taste and availability are key barriers to healthier eating.

• 43% of consumers expect how they choose and shop for food to be different by 2020 . . . but they still expect food companies

to be responsible for their health and well-being.

• 40% of consumers want food companies to help solve societal issues related to food and nutrition, and they are willing to pay

for it – within reason.

• Only one-third of consumers cited “brand name” as among the factors they consider when buying food – except in Argentina

and China.

• Consumers want local food, but they’re not willing to pay for it – in terms of either cost or taste.

Future Consumer Needs & Attitudes:

Source: Ketchum (a public relations and marketing communications firm), Food 2020 Survey


STEEP Analysis - Technological: Many are counting on new technology to increase agricultural production while conserving resources, improving the environment and improving human health and nutrition.

New Market Opportunities

• New technology may open new market opportunities for Iowa Agriculture to supply raw materials

and products for biobased chemicals, fibers and fuels. Success in these fields will be highly

dependent on the relative cost of biobased feedstocks versus petroleum based feedstocks and the

capital cost to build world scale facilities. Sugar is the feedstock of choice at present but many are

exploring other non-food and non-feed raw materials

Intensification vs.

Extensification

• Concerns about loss of wilderness and the role that forests, wetlands and other natural areas play

in the earth’s ecosystem have led to most countries choosing to intensify agriculture to meet future

demand. But consumers are increasingly concerned about the effects of agriculture on the land,

water and air. New technology is seen as being vital to increase production, sustainably.

Areas of Application

• The largest opportunity for new technology is to improve the utilization of scarce resources.

Historically the focus has been on land and labor but it is switching to water, fertilizer, feed and

energy.

Food Safety

• Food safety is a major market opportunity for new products. Management systems that ensure

food safety are becoming mandatory, opening up the opportunity for new software. Other food

safety related technology includes sensor technology, preservation technology and packaging

technology.


STEEP Analysis - Technological: Enabling technology like bioinformatics and service offerings such as various crop consulting services will speed the rate of technology development and the availability of information.

• Advances in animal biotechnology are mostly directed at improving feed conversion. The

success and acceptance of animal biotechnology varies by species and this could influence the

consumption of one type of protein in place of another. A key test case is the tentatively approved

GM salmon that continues to grow year-round.

Animal Biotechnology

Waste Utilization

• New waste conversion technology will allow crop and animal wastes to be converted to fuels

and fertilizers. One technology with a lot of potential is pyrolysis, which would allow the use of

cellulosic feedstocks, such as crop residues, to produce a liquid fuel and a soil amendment. It

hasn’t reached commercial scale yet.

• Water utilization is a key challenge for agriculture. Major opportunities are to optimize the use of

water in irrigation and to reuse gray water. Technologies that could be important include new

sensor technology and emitter designs to further improve drip irrigation and various technologies

such as high intensity light, new microbial and chemical treatments to eliminate pathogens and

heavy metals from gray water.

Water Utilization

• Advances in bioinformatics, genomics and marker assisted breeding are allowing faster

improvements in both conventional breeding and transgenic breeding. New mutagenesis

techniques that allow for more precise modification of a plant’s traits are beginning to appear and

may offer an alternative to transgenic plants. Many of the same techniques used to improve

plant varieties are/will be applied to improving the genetics of various animal species. Large

opportunities will continue for these types of enabling technologies.

Biotechnology


STEEP Analysis - Technological: Agriculture will be influenced by technology developed specifically for agriculture and technologies developed for unrelated fields. Sensor technology and RFID tags could be extremely important.

• Important over-arching or cross-cutting technologies are information technology, sensor

technology, nanotechnology, robotics and radio frequency identification. All could find application

at multiple points along the food value chain.

Over-Arching Technologies

Information & Industrial

Technologies

• Advances in information technology, process control technology, automation and robotics will find

broad application in the production, processing and manufacturing of food. The food processing

and manufacturing industries will adopt these technologies to improve efficiency and reduce

labor.

Precision Farming

• Optimizing the application of inputs will become increasingly important as resources become

scarce and prices increase. New sensor technology, better data mapping and decision support

software could allow on-the-fly adjustment of the amount of fertilizer, pesticides and water that are

applied to a field. The challenge is making the technology broadly available and inexpensive.

Services/technology such as these could become as common as cell phone service in the future.


STEEP Analysis - Technological: Forecasting what the most important new technologies will be is a roll of the dice, but we feel confident they will be both beneficial and disruptive, if the last 20 years is any indication.

A few cautionary notes…

• New technology development is a double edged sword. It can help Iowa Agriculture to maintain a

completive advantage or allow a competitor (Brazil) to rapidly reach parity or advance beyond Iowa

Agriculture.

• New technologies could eventually allow greater (developing country) self-sufficiency, decreasing size

of some export markets.

• All technology becomes less expensive over time, providing access to countries/organizations that

couldn’t previously afford it.

• Information/knowledge is spreading faster than ever, compressing technology and product lifecycles.

• Any new facility that is built in the BRIC countries will incorporate the latest technology putting older

plants at a competitive disadvantage. This has happened to numerous American industries (especially

steel).

• The adoption of various technologies could easily induce switching between various commodities.


STEEP Analysis - Economic: USDA Long-term Projections (issued Feb. 2011)

Annual GDP Growth (2011-2020):

0

1

2

3

4

5

6

7

8

9

World

China

India

Bra

zil

Rus

sia

Indo

nesia

Mex

ico

EU

U.S

.

An

nu

al G

DP

Gro

wth

(%

)

0

2

4

6

8

10

12

14

16

18

20

China

India

Bra

zil

Rus

sia

Indo

nesia

Mex

ico

EU

U.S

.

GD

P (

Billio

n $

's)

2009

2020

GDP by Country (2011 vs. 2020):

Note: Base year is in 2005 $’s

Macroeconomic Risks:

• Prolonged weakness in developed countries’ labor markets.

• Financial market risk (Eurozone internal debt & consumers’ retrenchment).

• U.S. business confidence remains low.

• Weakening of the dollar.

• Accelerating inflation in China.

Source: USDA, Long term Projections, February, 2011 Source: USDA, Long term Projections, February, 2011


Other Long-term Economic Projections (2011-2020):

Population Growth:

(slows markedly)

• Global growth averages 1.0% per year

• China’s growth averages 0.4% per year

• India’s growth averages 1.2% per year

• Brazil’s growth averages 1.0% per year

Oil Prices: • Reaches $111/bbl. in 2020

U.S. Inflation Rate (CPI): • Averages 2.5% per year

U.S. 3-month T-Bill: • Averages 4.8% over the period

Value of U.S. $: • Trade-weighted value declines ~6% by 2020

U.S. Unemployment Rate: • Declines to 6.2% by 2017 and remains there

Real Personal Income Growth: • Averages 2.8% over the period

STEEP Analysis - Economic: USDA Long-term Projections (issued Feb. 2011)

Source: USDA, Long term Projections, February, 2011


• Frost free days will increase by 10-15 days, lengthening the

growing season by a similar amount.

Average Temperatures

• Temperatures are projected to increase 1.5-2oC from

1990 to 2030. The average U.S. temperature has

already increased 0.5-1oC.

Heat Waves • The grain belt will experience 14-21 more days of high heat.

• Precipitation is expected to increase by 1-5%.Precipitation

Warm Nights • The number of warm nights are projected to increase 20-30%.

Frost Free Days

Note: Projections based on IPCC Scenario A1B which calls for very rapid economic growth that peaks in mid-century and declines thereafter. All of the projections are relative to 1980-1990 averages.

STEEP Analysis - Environmental: Weather in the grain belt is forecasted to become warmer and wetter. The growing season is forecasted to be longer.

Source: Intergovernmental Panel on Climate Change, Climate Change 2007


Note: 1990 hardiness map by USDA. 2006 hardiness map by the Arbor Day Foundation.

1990

2006

STEEP Analysis - Environmental: The most recognizable sign of climate change may be the change in plant hardiness zones from 1990 to 2006.


Environmental Changes:

Follow-on Effects:

Changes in Growing Conditions

Temperature:

• Ground & Air

• Day/night

• Extremes

Precipitation:

• Annual Amount

• Frequency

• Extremes

Growing Season:

Length

Pests/Weeds:

Northern migration & over-wintering of new pests (insects and diseases)

Atmospheric CO2:

Higher levels generally conducive to plant growth

Arable Land:

Loss of prime land due to more frequent flooding

Regional Differences:

National/Regional:

Shifts in growing conditions by latitude and longitude

Continental:

Growing market opportunity in Canada

Global:

Uneven effects. U.S. will be affected more than Latin American countries

STEEP Analysis - Environmental: Environmental changes will have a cascading effect on many other parameters.


STEEP Analysis – Political/Regulatory: Expect increasing regulation on food safety and environmental issues. Farm bill payments likely to decline. New industry standards likely over time as food retailers & manufacturers grow stronger.

Area Trends & Possible Developments

Farm Bill • Decreasing support over time.

Industry Standards • Food retailer and processor requirements likely to grow (e.g. GFSI,

GlobalG.A.P. and GSCP).

Pressure from NGO’s • Some will be cooperative but others will be confrontational. Animal

agriculture will face the most pressure. Agriculture is vulnerable from

a public relations point of view.

International Agreements • GATT will be updated at some point. Until then expect more bilateral

agreements.

• Brazil likely to file an unfair trading practice complaint against the U.S.

• A climate change treaty of some sort is likely in the next ten years.

Will drive up the cost of energy.

EU Trade Restrictions • Restrictions on GMO crops for animal feed will be relaxed over time

by some EU countries.

Immigration • Legislation providing a path to citizenship for illegal immigrants will be

enacted in the next ten years as the U.S. Hispanic population grows.

Environmental

Regulations

• New federal regulations are almost inevitable. Potential areas include

animal welfare, further restrictions on the selection of pesticides,

phosphorus and nitrogen.

Renewable Fuels • Incentives will be phased out but not the RFS.


Chapter 5: Value Chains and Competitiveness

Assessments


Methodology: Value Chains & Competitiveness Assessments

• All of the information captured in the value chains/competitiveness assessments was gathered

through secondary research.

• The corresponding Associations reviewed their value chain/competitiveness assessment prior to

the report being finalized.

• The value chains/competitiveness assessments only provided support for the development of the

strategies and recommendations and their prioritization.



Corn

Value Chain & Competitive Assessment

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Corn Industry Statistics – World Corn Consumption

• Total corn consumed in the world was 810,165 thousand

metric tons (2009-2010)

• The United States and China consumed over half of the

annual world corn supply.

– The United States is the #1 consumer of corn in the

world. They consumed 35% of the world corn supply

at 281,590 thousand metric tons per year. (2009-2010)

– China is a distant #2, consuming 20% of the corn at

159,000 thousand metric tons per year (2010-2011)

– The rest of the top 10 corn consuming

countries/regions are: the European Union, Brazil,

Mexico, Japan, India, Egypt, Canada, and South

Africa.

1

World Corn Consumption by Country, 2009/10 Crop Year

35%

20%7%

6%

4%

2%2%1%1%1%

21%United States

China

EU-27

Brazil

Mexico

Japan

India

Egypt

Canada

South Africa

Rest of the World

Source: USDA, PSD database, for 2009/10 crop year, accessed 10/7/11


Corn Industry Statistics – US Corn Consumption/Utilization

• Although used primarily to feed livestock, corn is a versatile

grain with a wealth of uses.

• The US is the world’s top corn producer and exporter of

corn.

• Approximately 90% of all fuel contains a 10% ethanol

blend.

• Corn is also processed into a multitude of food and

industrial products, including starches, sweeteners, corn

oil, and beverage and industrial alcohol.


US Corn Utilization, Marketing Year Ending Aug 2010

1

40%

35%

10%

15%

Feed and Residual

Ethanol

Food, Seed, andIndustrial

Exports

Sources: WASDE, Sept. 2011, for 2009/10 crop year;

US Grains Council; The Endless Uses for Corn, Corn Marketing Program of Michigan,

Winter 2008

Corn Industry Statistics – US Corn Consumption/Utilization

2011-2012 US Corn Crop12,433 mbu

1,400 mbuprocessed into

4,939 mbufor ethanol ***

1,650 mbuto exports

4,505 mbuto feed livestock

Starch

Corn oil

Sweeteners

Beverage alcohol

Corn meal

Grits

Corn flour

36%

40%

13%

12%

2011-2012 US Corn Crop Projected Utilization

% Percent of Total Corn Crop

1

*** Corn displaced by DDG use for 2011-2012 is 1168 mbu

Source: ProExporter, October 12, 2011

320 mbuResidual

3%


Corn Industry Statistics – Iowa Corn Consumption/Utilization

2011-2012 IA Corn Crop2,497 mbu *

387 mbuprocessed into

1,281 mbufor ethanol ***

407 mbuto exports

325 mbuto feed livestock

Starch

Corn oil

Sweeteners

Beverage alcohol

Corn meal

Grits

Corn flour

13%

45%

16%

22%

1

2011-2012 Iowa Corn Crop Projected Utilization

Source: ProExporter, August 2011

95 mbuResidual

4%

% Percent of Total Corn Crop

* 2011-2012 Iowa Crop Production is projected at 2,290 mbu*** Corn displaced by DDG use for 2011-2012 is 139 mbu


Corn Industry Statistics – Demand Considerations

• As economies expand and personal incomes grow,

consumers shift to more meat in their diets and this requires

more feed grains for meat production.

– Diets in the U.S. already have adequate quantities of

meat, but an expanding economy will keep meat

consumption brisk.

– Internationally, expanding economies are likely to

change diets, especially in developing countries.

• As a result, the long-term projections are expected to

expand world trade in feed grains and increase exports from

the United States.

Estimated Global Meat Production

1

Sources: USDA Feed Grain Baseline, 2009-18;

USDA Ag Projections to 2018, February 2009; USDA, Economic Research Service



• Projections for the livestock sector include production

adjustments to high grain and soybean meal prices in 2011.

Production of meats declines next year, as a result. Once

the sector adjusts, lower overall production combined with

strong domestic demand and some strengthening in meat

exports result in higher prices and higher returns, providing

economic incentives for expansion in the livestock sector

and resumption in meat production gains.

• Distillers' grains, a co-product of dry-mill ethanol production,

can be used in livestock rations, partially substituting for

corn and soybean meal. However, the primary users of

distillers' grains are ruminants (such as cattle) because they

are better able to accept the higher fiber levels compared to

mono-gastric animals (such as hogs and chickens). Beef

cattle feedlots and dairies located close to ethanol plants

are best situated to benefit from a steady supply of distillers'

grains, also reflecting the ability of those animals to use the

wet form of distillers' grains.

– Research is being conducted by Monsanto that is evaluating

feeding DDGs and corn stalks as feed for cattle.

• Higher grain prices and drought in recent years hold down

cattle inventories, pushing U.S. beef production down in

2009-12. Production then rises in the remainder of the

projection period as returns improve and herds are rebuilt.

Domestic Livestock & Poultry Production

1

0

20000

40000

60000

80000

100000

120000

20092010

20112012

20132014

20152016

20172018

20192020

Mil

. p

ou

nd

s

7300

7400

7500

7600

7700

7800

7900

8000

8100

Mil

. d

oze

n

Beef Pork Broiler Turkey Egg

• The total cattle inventory drops to under 93 million head

before expanding to about 97 million at the end of the

decade. Rising slaughter weights also contribute to the

moderate expansion of beef production beyond 2012.

• The relative cost of feeding cattle in feedlots versus on

pasture will result in stocker cattle remaining on pasture to

heavier weights before entering feedlots. As increased

numbers of cattle go on feed in feedlots, more feed grains

will be needed.

Sources: USDA Ag. Baseline Projections 2011;

Shane Ellis, ISU; Iowa Corn Growers Association


Corn Industry Statistics – Demand Considerations 1

• Pork production in 2012 is expected to be up minimally

(.6%) from 2011 in response to high feed prices. Moderate

growth is expected throughout the remainder of the

projections period as higher hog prices improve returns. The

greatest gains are forecast for 2014 and 2015 at 1.8% per

year. The eventual increase in hog numbers will necessitate

more feed grains, primarily corn.

• Broiler production had a setback with the feed price

increases in 2008 and 2011, but longer term projections are

for significant production increases over the next decade.

Poultry is the most efficient feed converter, and thus, will

have the greatest increase in production across the

livestock sector. As broiler production expands, feed needs

of the broiler industry are expected to grow over the period.

• Feed needs for turkey production have decreased during

the last 2 years, but projections going forward show

moderate increases after 2011. Growth in demand for turkey

products is supported by rising per capita consumption of all

meat products over the longer term.

• After slowing in 2008 and 2012, egg production is projected

to grow slightly each year with increases beginning in 2014

and later maintained at a 1%-per-year rate.

0

20000

40000

60000

80000

100000

120000

20092010

20112012

20132014

20152016

20172018

20192020

Mil

. p

ou

nd

s

7300

7400

7500

7600

7700

7800

7900

8000

8100

Mil

. d

oze

n

Beef Pork Broiler Turkey Egg

• Milk production is projected to increase slowly throughout

the projection period. Dairy cow numbers are expected to

continue their long-term decline during the next 10 years,

but annual herd reductions are more moderate compared

with past decades. Production gains are the result of

increased production per cow, although some slowing in

these gains occurs in 2008-10 in response to higher feed

cost. Over the long run, feed needs are likely to increase.

Domestic Livestock & Poultry Production

Sources: USDA Ag. Baseline Projections 2011;

Shane Ellis, ISU; Iowa Corn Growers Association



• Corn used for producing fuel alcohol (i.e., ethanol) has grown

sharply since the early 1980s. Production of corn-based ethanol

has grown from less than 3 billion gallons in 2003 to over 13

billion gallons in 2010. As a result, fuel alcohol has become the

largest component of the food, seed, and industrial (FSI) use

category. Fuel alcohol production has overtaken exports in recent

years as the second- largest use category for corn.

• Corn's use in fuel-alcohol production depends on the interaction of

government incentives and policies, technology development,

corn prices, prices of co-products from ethanol production, and

prices of energy substitutes. Approximately ninety percent of all

fuel contains a 10% ethanol blend. Ethanol is also used in

reformulated gasoline blends required in designated regions under

the Clean Air Act. Ethanol serves as an oxygenate replacing

methyl tertiary-butyl ether in these reformulated blends. Prices of

ethanol relative to gasoline remain a key factor in determining how

much ethanol is blended.

• Policy incentives underlie the interest in, and greatly impact the

expansion of, ethanol production. The Energy Policy Act of 2005

established a renewable fuel standard which mandated the use of

renewable fuels in gasoline. The U.S. Government blender tax

credit, various state production subsidies, and some states'

required use of fuel alcohol, as well as the cost and availability of

substitute fuel additives, affect the amount of ethanol used.

• The Energy Independence and Security Act of 2007 (P.L. 110-140)

required the use of 9.0 billion gallons of renewable fuels in 2008,

increasing each year to 36 billion gallons in 2022. In addition, the

Act requires that an increasing share of the mandate be met with

advanced bio-fuels, which are bio-fuels produced from feed stocks

other than cornstarch (and with 50% lower lifecycle greenhouse gas

emissions than petroleum fuels). Potential advanced bio-fuels

include ethanol from cellulosic material (such as perennial grasses

and municipal solid waste), ethanol from sugarcane, and diesel fuel

substitutes produced from a variety of feed stocks.

• The continued presence of ethanol demand in the corn sector, in

combination with other long-term factors, holds prices for corn and

many other crops well above their historical levels.

1

Sources: USDA Feed Grain Baseline, 2010-19

Million Gallons of Corn Based Ethanol Production and Million

Bushels of Corn Used In Ethanol Production


Corn Industry Statistics - US Feed Grain Supply & Use

• Feed grain production increases throughout the projection

period, as yield growth accounts for most of the expanded

output.

– Corn is expected to gain in share of total feed grain production

and use.

– Corn area is projected to remain above 90 million acres over the

rest of the decade.

– US DDGs production is the 4th largest feed crop available.

Approximately one third of all corn that goes into an ethanol plant

comes back out as a valuable livestock feed.

• After the first year of the projections, total feed grain use is

projected to set new records.

– By 2020/21, exports are expected to grow about 19% from 55

million metric tons in 2009/10, supporting growth in global meat

production.

– Improved growth in global imports is expected, and U.S. feed

grain exports are expected to encounter only moderately higher

competition throughout the period.

• U.S. ending stocks of feed grains are projected to remain

tight and slowly decrease for the rest of the projection

period (versus historical levels of 40-50 mmt)

– Productivity is projected to account for most of production growth

throughout the decade.

1

0

50

100

150

200

250

300

350

400

450

500

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

Mil.

metr

ic tons

Beginning stocks Production Imports

0

50

100

150

200

250

300

350

400

450

500

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

Mil.

metr

ic tons

Feed & residual Food, seed, & industrial Exports Ending stocks

US Feed Grain Supply

US Feed Grain Utilization

Source: USDA Ag. Baseline Projections 2011; Iowa Corn Growers Association, October 2011; FAPRI-ISU

2011 World Agricultural Outlook196 | Context | Iowa AgriScope 2030

Corn Industry Statistics – Corn Supply & Use to Grow

• Corn yields are expected to increase, resulting in record

corn production in 2012/13 and beyond. Use is projected to

set records throughout the projection period driven by

expanding livestock herds (raising feed needs) and

industrial corn use.

• In 2011, corn acreage increased above 90 million acres and

is expected to remain at or above that level over the

remainder of the projection period.

– A gradual shift to corn away from other crops reflects the

high levels of domestic corn-based ethanol production and

gains in feed use and exports that keep corn demand and

producer returns strong.

– In the projections, corn area grows relative to soybean area,

as relative net returns are expected to favor corn throughout

most of the decade.

– Gains in corn yields are expected to continue over the entire

projections period, facilitated by genetic improvements.

US Corn Area & Yield

1

0

10

20

30

40

50

60

70

80

90

100

19801983

19861989

19921995

19982001

20042007

20102013

20162019

Mill

ion a

cres

0

20

40

60

80

100

120

140

160

180

200

Bu/a

cre

Planted Harvested Yield

0

2

4

6

8

10

12

14

16

18

1980/81

1983/84

1986/87

1989/90

1992/93

1995/96

1998/99

2001/02

2004/05

2007/08

2010/11

2013/14

2016/17

2019/20

Bill

ion b

ush

els

Beginning stocks Production Imports

US Corn Supply

Sources: USDA-NASS; USDA-ERS, Feed Outlook197 | Context | Iowa AgriScope 2030

Corn Industry Statistics – US Corn Utilization

• Feed and residual use of corn bottoms out in the initial

years of the projections due to reduced meat production and

increased feeding of distillers' grains. Increases in feed use

rise somewhat faster later in the period as meat production

picks up and growth in availability of distillers' grains slows

with the reduced pace of corn-based ethanol expansion.

• Despite its growth, direct feed use of corn is not as strong

as it would be without co-products from ethanol production.

Ethanol wet mills produce corn gluten feed, corn gluten

meal, and corn oil as co-products, while dry mills produce

distillers’ dried grains (DDG). The projections assume that

each 56-pound bushel of corn that goes into dry-mill ethanol

production results in 17 pounds of DDG as a co-product.

• Food, seed, and industrial use of corn is anticipated to

remain fairly flat.

– Corn-to-ethanol use is expected to remain fairly flat based

on the 15 bg gap on corn-based ethanol.

– Consumer dietary concerns and other changes in tastes

and preferences limit increases in the combined use of

corn for high fructose corn syrup, glucose, and dextrose to

half the rate of population gain.

– Growth in starch production is expected to be limited in the

first part of the projection period by weaker demand for

paper and building materials due to poor economic

conditions.

US Corn Utilization

• U.S. corn exports rise in response to stronger global

demand for feed grains to support growth in meat

production, but the U.S. share of global corn trade falls

slightly in the projections.

1

0

2

4

6

8

10

12

14

16

18

1980/81

1983/84

1986/87

1989/90

1992/93

1995/96

1998/99

2001/02

2004/05

2007/08

2010/11

2013/14

2016/17

2019/20

Bill

ion b

ush

els

Food, seed, and industrial Feed and residual Exports Ending stocks

Source: USDA-ERS, Feed Outlook; Iowa Corn Growers Association198 | Context | Iowa AgriScope 2030

Corn Industry Statistics – US Corn Utilization

• Ending stocks of corn are expected to remain lower over the

course of the projection period. However, corn prices fall

from the high level of 2010/11 as increases in ethanol

production slow and corn stocks build somewhat. In the

longer run, corn prices remain higher than their pre-2006

levels due to continued demand for corn to produce ethanol

as well as growth in feed use and exports.

US Corn Price and Stock-to-Use Ratio

1

0%

10%

20%

30%

40%

50%

60%

70%

1980/81

1983/84

1986/87

1989/90

1992/93

1995/96

1998/99

2001/02

2004/05

2007/08

2010/11

2013/14

2016/17

2019/20

0

1

2

3

4

5

6

7

$ p

er

bush

el

Stocks-to-use Price

Source: USDA-ERS, Feed Outlook


Corn Industry Statistics – World & US Corn Trade

• Increased global demand for meat is expected to boost world

consumption of feed grains. However, production constraints,

especially limited area, will keep many traditional importing

countries from expanding production as rapidly as use,

boosting global trade from 89 million metric tons in 2010/11

to 113 million in 2020/21. The U.S. share of corn trade is

expected to hold steady at 52% by the end of the projection

period.

• China is important for the future of global corn trade. As

recently as 2002/03, China was the second-largest corn

exporter. However, the country is expected to limit exports

and gradually increase imports of corn, becoming a small net

importer by the end of the projection period. Meat demand in

China is expected to rise because of strong income growth.

Rapid gains in meat production are expected to increase

corn feed use. While corn yield growth is projected to rise

less than 1% per year, area increases will be limited by

higher returns from other land uses. Nonetheless, northeast

China is expected to remain a surplus corn producing region

and, because it is so close to South Korea—one of the

world's largest corn importers—China is expected to

continue exporting corn. However, southern China is

expected to be an increasingly corn-deficient region,

boosting imports during the next decade.

World and US Corn Trade

1

0

20

40

60

80

100

120

1980/1981

1983/1984

1986/1987

1989/1990

1992/1993

1995/1996

1998/1999

2001/2002

2004/2005

2007/2008

2010/2011

2013/2014

2016/2017

2019/2020

Mil.

metr

ic tons

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

World United States Share

Sources: USDA, PSD database, accessed 10/7/11;

USDA-ERS Market Outlook



• Growth in global corn imports over the projections period is

not limited to China. Most corn-importing countries are

expected to increase imports as meat production rises and

as corn production growth is limited by several factors.

Mexico's corn imports are projected to rise from about 9

million metric tons to 14 million metric tons in 2020/21. With

the liberalization of U.S.-Mexico corn trade complete—as

part of the North American Free Trade Agreement (NAFTA),

future growth in Mexican corn imports will be influenced by

factors other than NAFTA, such as rising feed demand from

Mexico's poultry sector.

• Corn area expansion in Argentina is expected to be limited

by profitable returns for soybeans and higher export taxes

on grains.

• The European Union (EU) becomes a more competitive

corn exporter due to increases in area and yields, which

enable it to more than double shipments during the

projections.

• Exports from non-EU countries are also projected to climb

steadily.

• Brazil is expected to remain a significant net exporter of

corn because of attractive world prices and niche market

demand in the EU for grain that is not genetically modified.

In the last several years, Brazil has targeted the EU market

for non-genetically modified grain. This ability is assumed

to diminish as Brazil legalizes planting of genetically

modified corn varieties and the EU reduces imports. Also,

strong growth in domestic demand from its livestock and

poultry sectors and the profitability of growing soybeans

limits corn exports.

1

0

20

40

60

80

100

120

1980/1981

1983/1984

1986/1987

1989/1990

1992/1993

1995/1996

1998/1999

2001/2002

2004/2005

2007/2008

2010/2011

2013/2014

2016/2017

2019/2020

Mil.

metr

ic tons

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%







• Steady long run growth in the livestock sectors of

developing countries in Latin America, Asia, North Africa,

and the Middle East is projected to account for much of the

growth in world coarse-grain imports during the next

decade. Canada is expected to increase corn imports to

support a rise in domestic meat production.

• Russia and other former Soviet Union countries increase

corn imports faster than Ukraine increases exports, making

the region a growing net importer of corn.

• However, some markets, like Japan, South Korea, and

Taiwan, are expected to have no growth in corn imports due

to slow growth in meat consumption combined with higher

meat imports.

1

0

20

40

60

80

100

120

1980/1981

1983/1984

1986/1987

1989/1990

1992/1993

1995/1996

1998/1999

2001/2002

2004/2005

2007/2008

2010/2011

2013/2014

2016/2017

2019/2020

Mil.

metr

ic tons

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%






Corn Industry Statistics – World Corn Production

• Corn is the largest US crop, in terms of both volume and

value. The states of Iowa, Illinois, Nebraska and Minnesota

account for more than 50% of U.S. corn production. Other

major corn-producing states include Indiana, Wisconsin,

South Dakota, Michigan, Missouri, Kansas, Ohio and

Kentucky.

• The United States grew 41% of the world's corn in 2009/10

crop year, producing 332 million metric tons (12.1 billion

bushels).

• Other major corn producing countries in 2009/2010

included:

– China -158 million metric tons (6.2 billion bushels)

– European Union - 57 million metric tons (2.25 billion

bushels)

– Brazil- 56.1 million metric tons (2.2 billion bushels)

– Argentina – 23.3 million metric tons (886 million

bushels)

– Mexico - 20.4 million metric tons (799 million bushels)

– India - 16.7 million metric tons (657 million bushels)

World Corn Production, 2009/10

1

41%

19%

7%

7%

3%

3%

2%2%1%1%

14%

United States

China

EU-27

Brazil

Argentina

Mexico

India

South Africa

Ukraine

Canada

Rest of the World

Sources: USDA, PSD database, for 2009/10 crop year, accessed 10/7/11;

US Grains Council


53%

17%

12%

5%

2%2%

2%1%1%1% 4%

United States

Argentina

Brazil

Ukraine

South Africa

India

EU-27

Paraguay

Serbia

Thailand

Rest of the World

29%

17%

14%

6%

6%

4%

3%

2%2%

2%

15%

Japan

Mexico

Korea, South

Taiwan

Egypt

Canada

China

Venezuela

Syria

Dominican Republic

Rest of the World

Corn Industry Statistics – World Corn Exports

• The United States is not only the world's top corn producer,

but also the top exporter.

• On average, about 20% of U.S. corn is exported.

• During the 2009/10 crop year (September 2009 to August

2010), the U.S. exported 50.3 million metric tons (1.98

billion bushels) - accounting for 53% of world corn exports.

• During the same period, other major corn exporters included

– Argentina (16.5 million metric tons, or 646 million

bushels)

– Brazil (11.6 million metric tons, or 454 million bushels)

• Japan is the largest and most consistent importer of corn in

the world.

• The United States satisfies nearly all of Japan's demand.

During the 2009/10 crop year, Japan imported 14.6 million

metric tons (573 billion bushels) of U.S. corn.

• Mexico, Korea, Taiwan, Egypt, Canada and (recently) China

are also major corn importers and important markets for the

United States.

World Exporters of Corn, 2009-10

World Exporters: Top US Corn Customers, 2009-10

1

Sources: USDA, PSD database, for 2009/10 crop year, accessed 10/7/11;

US Grains Council


Corn Industry Statistics – US Supply Considerations

• Among the feed grains, corn has the highest return above

variable cost. Soybeans, while being an excellent rotation

crop with corn, are also the major competitor with corn for

acreage. Realized net returns for soybeans were above

those for corn in marketing years 1996/97 through 2001/02

and also in 2006/07. Soybean planted area expanded

during these years. Net returns for soybeans are expected

to be below those for corn throughout the projection period,

due to lower relative prices caused by increased corn

demand by the ethanol industry.

• There are benefits to growing crops that may not be

reflected in a single year's cost and returns analysis. Thus,

expected net returns do not explain all planting decisions.

Maintaining rotations is an important objective for most

farmers. This provides numerous agronomic benefits and

may outweigh decisions based only on price signals.

Net returns for various crops

• Soybeans and corn work well in rotation because many of the

insects that attack one crop do not bother the other crop. Many

corn farmers alternate annually between corn and soybeans.

Corn benefits from increased fertilizer use and carryover

fertilizer benefits soybeans in the following year. Likewise,

soybeans roots host bacteria that convert nitrogen from the air

into a form usable by plants. Carryover nitrogen from this

process benefits the following corn crop. Before genetically

modified, herbicide-tolerant soybeans became available, corn in

the rotation was preferable for greater weed control. Corn

remains an important rotation crop as soybeans planted

following soybeans typically suffer disease-related yield losses.

1

0

100

200

300

400

500

600

700

800

99/00

01/02

03/04

05/06

07/08

09/10

11/12

13/14

15/16

17/18

19/20

$ p

er

acr

e

Wheat Corn Sorghum Barley Oats Soybean

Source: FAPRI 2010 and 2011 Outlooks; USDA-

ERS Outlook


Corn Industry Statistics – Iowa Cooperatives(Note: These cooperatives handle other crops beyond corn)

Consolidation with the grain and farm supply cooperatives has been vast over the past 20+ years (1990 = 256; 2011 = 58). However the impact on the local communities of Iowa has not dwindled.

1


Corn Industry Statistics – Iowa Rail Lines

Iowa Railroad Service Map - 2010

1



Iowa Grain Loading & Processing Facilities - 2010

In most cases, the larger the rail loading facility, the more competitive they become.

1



Iowa Biodiesel and Ethanol Processing Plants - 2010

1


Iowa Corn Industry Economic Impact

Corn Production

• Iowa has produced the largest corn crop of any state for each of the past 14 years. In an average year, Iowa produces more

corn than most whole countries. For example, Iowa grows three times as much corn as a country like Argentina.

• In 2010, 42% of Iowa’s farmland (13.05 million acres harvested) was corn. The average yield across those acres was 165

bushels/acre. Iowa farmers produced 2.15 billion bushels of corn. With corn prices at $5.45, this crop contributed $11.74 billion

(value of production) to the state’s economy.

• Additional value, income and jobs are created up and down the corn value chain

– Rail & truck transportation

– Crop insurance

– Equipment

– Seed

– Chemicals

– Fertilizer

– Corn processing

– Livestock consumption

2

Sources: USDA – NASS; Iowa Renewable Fuels Association; Ethanol Facts online;

Iowa Corn Growers Association; Iowa Agriculture Quick Facts 2010



Economic importance of Iowa biofuels industry, 2009

Purchases

(million $’s)

GDP

(million $’s)

Household

Earnings

(million $’s)

Employment

(Jobs)

State Tax

Revenues

(million $’s)

Operations

Ethanol 4,999.6 10,473.6 1,887.8 59,010 476.0

Biodiesel 224.3 471.2 103.0 2,911 22.3

Subtotal 5,224.0 10,944.8 1,990.8 61,921 498.3

New

Construction

Ethanol 520.7 547.4 295.5 8,260 34.1

Biodiesel 0.0 0.0 0.0 0 0.0

Subtotal 520.7 547.4 295.5 8,260 34.1

Total 5744.7 11,492.2 2,286.3 70,181 532.4

Source: John H. Urbanchuk, LEGC LLC, Contribution of the Biofuels Industry to the Economy of Iowa

Corn Processing Ethanol

• Biofuels production is part of the manufacturing sector that

adds value to agricultural commodities produced in Iowa and

makes a significant contribution to the Iowa economy.

• Iowa produced 3.2 billion gallons of ethanol from 39 operating

plants in 2009.

• In 2009 biofuels production contributed $11.5 billion to the

Iowa economy or 8% of total state GDP. Half of industry GDP

was generated through purchases and the other half through

value-added operations. Approximately 95% of the industry’s

contribution to state GDP came from operations and the rest

from new construction.

• Ethanol contributed $11,021 million or 96% of the total.

• It generated $2.2 billion in household earnings, 67,270 full and

part time jobs and state tax revenues of $510 million.

• The industry also consumed billions of dollars of raw materials,

other inputs, goods and services. Just over half of purchases

were for feedstocks (grains, vegetable oil and animal fats).

• The Iowa ethanol industry consumed 1.14 billion bushels of

corn (46% of the state’s production) providing $2.9 billion in

revenues to Iowa farmers. The Iowa biodiesel industry

consumed 353 million pounds of soybean oil, 218 million

pounds of other fats and oils and 71 million pounds of corn oil.

The total value of these feedstocks was $194.5 million.

• Half of Iowa’s ethanol plants, representing a third of the state’s

production capacity are locally owned.

• DDGS, a co-product generated in the production of ethanol

has become an important input to the animal feed industry

globally.

2



Corn Processing - Bioprocessing Center in Eddyville

• Direct Economic Impact: The center produces an estimated $718 million in industrial output among the three firms, Cargill,

Ajinomoto Heartland LLC, and Wacker Chemical Corporation. There are 702 jobs at the Center with a combined payroll of

$41.86 million – an average earnings level per job of $59,635 across the three firms. The center requires 85 million bushels of

corn annually.

• Indirect Economic Impact: In producing those inputs, the Center required $153.85 million in non-corn inputs from regional

suppliers, which in turn stimulated 1,107 more jobs receiving $54.2 million in labor incomes.

• Induced Economic Impact: The direct and indirect workers convert labor incomes into household spending. That spurs $43.9

million in induced output in the region, which required 551 more jobs making $13.3 million in labor income.

• Total Economic Impact: The Center links to $915.7 million in total industrial output, $190.2 million in value-added of which

$109.35 million is labor income to the area’s 2,360 benefitted workers.

2

Source: An Analysis of the Economic Impacts of the Iowa Bioprocessing Center in Eddyville, Iowa, 2007


Inputs *

* Seeds

* Agrochemical

* Fertilizer

* Farm Equipment

* Land

* Labor

$8.21 billion

Farm Production

$11.7 billion

Exports

Processing

Livestock Feed

Ethanol Refining

Food & Industrial

Uses

3

Sources: USDA-NASS; Estimated Costs of Crop Production in Iowa, 2011

* Estimate based on 13,400 thousand acres planted to corn in 2010 (USDA-NASS) & ISU Estimated Costs of Crop Production in Iowa for Corn following Soybeans in 2010 of $612.50

Growth in the corn value chain can continue as

long as Iowa continues to have opportunities for

export and new uses are identified.


Corn Industry Value Chain Summary – Iowa (2010)

Iowa Corn Industry Value Chain Summary –

Production Costs, Corn following Corn

• Continued sustainability and growth of Iowa’s corn sector will

depend upon the state’s competitiveness compared to other

Midwestern states, other countries and continued growth in the

demand for corn.

• Total production costs have increased and are expected to

continue to do so. They peaked in 2009 at $739/acre but that

number is expected to be surpassed in 2012.

– Machinery costs have averaged around 21% of total production

costs yet dipped to 16% in 2009 at almost $116/acre

– Seed, Chemicals, etc. costs have gradually increased, peaking in

2009 at 52% ($387/acre) of total production costs. They are

expected to exceed 2009 levels in 2012.

– Labor costs have decreased as a percent of total production

costs (7% to 4%, although they are a very small portion of total

production costs).

– Land prices per acre as a percent of total production costs have

also decreased from 35% to 28%. However, on a dollar for dollar

comparative basis, they peaked in 2009 at $205/acre.

– An August report from a private survey of professional farm

managers in Iowa, Minnesota, and Illinois found that $400 cash

rents will be commonplace in 2012 on highly productive land.

Increases of 10-20% were thought to be common, depending on

when the lease terms were established.

3

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

2003 2004 2005 2006 2007 2008 2009 2010 2011

Land

Labor

Seed,Chemicals,etc.

Machinery

Machinery

Seed,Chemicals,etc.

Labor

Land

Distribution of Iowa corn production costs –

Corn following Corn

Distribution of Iowa corn production costs, 2009 –

Corn following Corn

Source: Estimated Costs of Crop Production in Iowa, 2011 ; 2012 Crop Input Costs Increase, Along with Profit

Margin Opportunities, 2011; Iowa Corn Growers Association; Costs Increasing for 2012 Crop Production, Sept 2011


Iowa Corn Industry Value Chain Summary –

Production Costs, Corn following Soybeans

• Continued sustainability and growth of Iowa’s corn sector

will depend upon the state’s competitiveness compared to

other Midwestern states, other countries and continued

growth in the demand for corn.


continue to do so. They peaked in 2009 at $691/acre but

that number is expected to be surpassed in 2012.

– Machinery costs have averaged around 21% of total production costs yet dipped to 16% in 2009 at almost $114/acre.

– Seed, Chemicals, etc. costs have gradually increased, peaking in 2009 at 50% of total production costs.

– Labor costs have decreased as a percent of total production costs (6% to 4% although they are a very small portion of total production costs).

– Land prices per acre as a percent of total production costs have also decreased from 37% to 30%. However, on a dollar for dollar comparative basis, they peaked in 2009 at $205/acre.

– An August report from a private survey of professional farm managers in Iowa, Minnesota, and Illinois found that $400 cash rents will be commonplace in 2012 on highly productive land. Increases of 10-20% were thought to be common, depending on when the lease terms were established.

3

Machinery

Seed,Chemicals,etc.

Labor

Land

Distribution of Iowa corn production costs,

2009 – Corn following Soybeans

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

$800.00

2003 2004 2005 2006 2007 2008 2009 2010 2011

Land

Labor

Seed,Chemicals,etc.

Machinery

Distribution of Iowa corn production costs –

Corn following Soybeans

Source: Estimated Costs of Crop Production in Iowa, 2011 ; 2012 Crop Input Costs Increase, Along with Profit

Margin Opportunities, 2011; Iowa Corn Growers Association; Costs Increasing for 2012 Crop Production, Sept 2011


Corn Industry Outlook – Future Opportunity

Corn Production

• Yields per acre for U.S. feed grains will continue to increase, and corn yields will grow at the fastest rate. Rising corn yields

help boost net returns, keeping planted area up. Corn production is projected up 15% over the next decade.

• In 2010, Iowa farmers produced 2.15 billion bushels of corn. With corn prices at $5.45, this crop contributed $11.74 billion

(value of production) to the state’s economy.

– A 50¢ per bushel increase in corn prices would add $1.08 billion to the state’s economy.

– A 10% increase in yield at $5.45/bushel, would add $1.17 billion to the state’s economy.

• In 2011, Iowa farmers are expected to produce 2.31 billion bushels of corn. With corn prices at $6.20/$7.20, this crop would

contribute $14.3/$16.6 billion (value of production) to the state’s economy.

– A 50¢ per bushel increase in corn prices would add $1.15 billion to the state’s economy.

– A 10% increase in yield at $6.20/bushel and $7.20/bushel, would add $1.43/$1.66 billion to the state’s economy.

4

Sources: USDA – NASS; USDA-ERS Market Outlook;

Interior Iowa Daily Grain Prices, October 28, 2011; WASDE Report, 2011



Corn Exports

• China may double its corn imports from the U.S. this season, adding to a burgeoning year for American exporters and giving

railroads and ocean carriers a boost in grain shipments until about August 2012.

– US corn exports to China so far this year have already exceeded total exports from last year, thanks to the recent sale of 900,000

metric tons of American corn, one of the largest sales ever to the country, the Department of Agriculture recently announced.

– China imported about 1 million metric tons last fiscal year, according to the US Grains Council.

– Although China is already on track to become a net importer of U.S. corn for the second straight year, estimates of how much corn

the country will import vary widely.

– The US Grains Council expects the country to import 5 to 10 million metric tons of corn, while the USDA places imports at closer to

2 million metric tons.

– Analyst Hanver Li expects China to import 7 - 10 million metric tons of U.S. corn over the next 12 months, according to the

Associated Press. China’s annual imports of U.S. corn could reach 15 million metric tons by 2015, said Li, Chairman of the market

research firm, Shanghai JC Intelligence.

• Most corn-importing countries are expected to increase imports as meat production rises and as corn production growth is

limited by several factors.

• Mexico's corn imports are projected to rise from about 9 million metric tons to 14 million metric tons in 2020/21. With the

liberalization of U.S.-Mexico corn trade complete—as part of the North American Free Trade Agreement (NAFTA), future

growth in Mexican corn imports will be influenced by factors other than NAFTA, such as rising feed demand from Mexico's

poultry sector.

• Canada is expected to increase corn imports to support a rise in domestic meat production.

• After the trio of Free Trade Agreement deals (Columbia, Korea and Panama) recently passed, the National Corn Growers

Association said “statistics show passage of the three FTAs could create 250,000 American jobs and add an additional $13

billion annually in exports. The United States continues to be the largest producer and exporter of corn in the world, exporting

50.4 million metric tons last year.”

4

Sources: USDA – NASS; Iowa Renewable Fuels Association; Checkoff Connection, Iowa Corn Promotion Board, 2010; USDA-ERS Market

Outlook; US Grains Council; Trio of Trade Agreements Pass Congress, Oct 2011; US Corn Exporters Double Up on China Sales, October 2011217 | Context | Iowa AgriScope 2030


Corn Processing – Feed Grain

• Demand for feed and livestock production is growing 3% to 6% annually, according to US Grains Council officials.

• As economies expand and personal incomes grow, consumers shift to more meat in their diets and this requires more feed

grains for meat production.

• After rebounding from the current recession, increased global demand for meat is expected to boost world consumption of feed

grains.

– Global trade in feed grains is expected to rise because many traditional importing countries will not be able to increase

production as much as the gains in consumption. (Reference “Estimated Global Meat Production” - Slide 6 of this section)

– Most of the growth in trade is in corn.

• Strong use both domestically and worldwide keeps feed grain prices at historically high levels, but down from record highs

attained in 2007/08.

• China is on pace to become the largest buyer of U.S. dried distillers grain (DDGS), a corn-based byproduct of ethanol

production used as animal feed, this year buying some 1.5 million tons. China’s imports of dried distillers grain may rise to 2.5

million to 3 million tons.

4

Sources: USDA – NASS; Iowa Renewable Fuels Association;

Checkoff Connection, Iowa Corn Promotion Board, 2010; USDA-ERS Market Outlook; US Grains Council



Corn Processing – Ethanol

• FAPRI is forecasting corn-based ethanol to continue to grow,

exceeding the RFS2 mandate of 15 billion gallons by the

15/16 marketing year, despite the loss of blenders credit and

the import tariff. The major drivers of continued growth are

the RFS2 mandate, the rising value of RIN’s, ethanol’s price

competitiveness with gasoline and the marketing of E15. The

January forecast projects corn-based ethanol volumes will

reach 16 billion gallons by 20/21. Adoption of 15% ethanol

blends opens up a new 7 billion-gallon-per-year market,

which is twice the size of Iowa’s 2010 ethanol production.

• Cellulosic ethanol only reaches 242 million gallons in 16/17.

• Ethanol imports (sugarcane-based) rise to fulfill a portion of

the advanced biofuels requirement from RFS2. They reach

3.7 billion gallons by the 16/17 marketing year.

• E85 also paints a bright future for ethanol. With the

commitment by the three major U.S. automakers to make

50% of their 2012 production as flex-fuel vehicles, more

motorists will have the option to purchase renewable fuels.

4

Ethanol

0

5,000

10,000

15,000

20,000

25,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17

Eth

an

ol S

up

ply

(m

illio

n g

allo

ns)

EtOH-corn Cellulosic EtOH-imports

Sources: FAPRI, August 2011 Baseline Update for U.S. Agricultural Markets, USDA – NASS;

Iowa Renewable Fuels Association; Checkoff Connection, Iowa Corn Promotion Board, 2010;

USDA-ERS Market Outlook; Iowa Does its Part in Encouraging Adoption of E15, Ethanol

Producer Magazine, May 2011; US ; USDA-NASS; Grains Council; USDA-ERS Market

Outlook


Corn Production

• ISU Extension economist Mike Duffy expects that non-land costs for 2012 will increase approximately 15% over those realized in

2011; led by higher fertilizer, fuel, seed and crop protection costs.

• An August 2011 report from a private survey of professional farm managers in Iowa, Minnesota and Illinois found that $400 cash

rents will be commonplace in 2012 on highly productive land. Increases of 10-20% were thought to be common, depending on

when the lease terms were established.

• Managing margins is nothing new to row crop farmers, but the increased risk of these high crop prices is that they might lead to

a decrease in demand; a very real concern for 2012. While nearby 2011 corn futures prices approach $8 per bushel, you can

expect demand to decline, especially the demand for corn fed by U.S. livestock producers. This demand could be slow to return

in the short run and have a negative impact on 2012 price prospects.

Corn Processing – Food & Industrial

• Growth in starch production is expected to be limited in the first part of the projection period by weaker demand for paper and

building materials due to poor economic conditions.

• Consumer dietary concerns and other changes in the tastes and preferences limit increases in the combined use of corn for high

fructose corn syrup, glucose, and dextrose to half the rate of population gain.

Corn Processing – Feed Grain

• While nearby 2011 corn futures prices approach $8 per bushel, you can expect demand to decline, especially the demand for

corn fed by U.S. livestock producers. This demand could be slow to return in the short run and have a negative impact on 2012

price prospects.

4

Sources: ISU Ag Decision Maker - 2012 crop input costs increase, along with profit margin opportunities, 2011;

USDA-ERS Market Outlook; USDA-ERS Outlook


Corn Industry Outlook – Risks to Growth

Corn Processing - Ethanol

• Current installed capacity is approximately 14.7 billion gallons, with no

new corn-based plants under construction. It is difficult to see why

investors would commit $150 million to build a new plant when returns

have been so marginal.

• A prior FAPRI analysis of the loss of the blenders credit estimated that

production capacity could drop by ~1 billion gallons, yet their most recent

analysis shows no real effect from the imminent loss of the credit.

• The FAPRI forecast is based on minimal year-to-year volatility in corn or

ethanol prices which seems questionable. Plant margins may face

additional pressure in the years ahead and some older capacity could be

retired rather than face periods of negative returns and the costs of

replacing equipment.

• Water is going to become an increasing problem in the plains states and

ethanol plants could see water allocations reduced in favor of municipal

use.

• The ethanol industry is approaching the maximum blending requirements

of RFS2 which will inhibit future growth.

• Market acceptance of higher ethanol blends is weak and some states are

removing incentives for corn-based ethanol or resisting the introduction of

E15 on non-flex fuels vehicles.

4

Political support for biofuels in

the U.S. is eroding.

The new fleet mileage standards

may accelerate the decline in

liquid fuels use in the U.S. and

the opportunity to blend biofuels.


Corn Industry Outlook – Risks to Growth

Corn Industry - References

• Agriculture and the State of Iowa http://www.iowacorn.org/documents/filelibrary/education/State_of_Iowa_and_County_Agricultur_A18D1C040E3D5.pdf

• Bureau of Economic Analysis

• The Economic Impact of Ethanol Production in Iowa http://www2.econ.iastate.edu/research/webpapers/paper_12865.pdf

• U.S. Department of Labor – Quarterly Census of Employment and Wages (QCEW)

• Importance of the Renewable Fuels Industry to the Economy of Iowa, January 24, 2011 http://www.iowarfa.org/documents/2011IowaBiofuelsEconomicImpactFinal.pdf

• The Economic Importance of Agri-Food Industries in Iowa, Sept 2005

• US Grains Council http://www.grains.org/corn

• Estimated Costs of Crop Production in Iowa, 2011 http://www.extension.iastate.edu/agdm/crops/pdf/a1-20.pdf

• WASDE, Sept. 2011, for 2009/10 crop year

• USDA Feed Grain Baseline, 2009-18 http://www.ers.usda.gov/briefing/corn/2009baseline.htm#US

• USDA-NASS

• USDA-ERS, Feed Outlook

• USDA Agriculture Baseline Projections 2011

• USDA, PSD database, accessed 10/7/11

• USDA Feed Grain Baseline, 2010-19 http://www.ers.usda.gov/briefing/corn/2010baseline.htm

• Ethanol data from DOE-EIA, corn data by formula

• FAPRI 2010 and 2011 Outlooks

• FAPRI, August 2011 Baseline Update for U.S. Agricultural Markets


http://www.iowacorn.org/documents/filelibrary/education/State_of_Iowa_and_County_Agricultur_A18D1C040E3D5.pdf

http://www2.econ.iastate.edu/research/webpapers/paper_12865.pdf

http://www.iowarfa.org/documents/2011IowaBiofuelsEconomicImpactFinal.pdf

http://www.grains.org/corn

http://www.extension.iastate.edu/agdm/crops/pdf/a1-20.pdf

http://www.ers.usda.gov/briefing/corn/2009baseline.htm

http://www.ers.usda.gov/briefing/corn/2010baseline.htm

Corn Industry - References

• Checkoff Connection, Iowa Corn Promotion Board, November 2010

http://www.iowacorn.org/documents/filelibrary/checkoff/IowaCorn_B74E478E1F1E0.pdf

• Iowa Renewable Fuels Association http://www.iowarfa.org/PDF/freedom.pdf

• An Analysis of the Economic Impacts of the Iowa Bioprocessing Center in Eddyville, Iowa, October 2007

• ISU Ag Decision Maker - 2012 crop input costs increase, along with profit margin opportunities, September 2011

• Iowa Does Its Part in Encouraging Adoption of E15, Ethanol Producer Magazine, May 2011

• The Endless Uses for Corn, Corn Marketing Program of Michigan, Winter 2008

http://www.micorn.org/downloads/PLA_newsletter.pdf

• Ethanol Quick Facts www.ethanolfacts.com

• Iowa Corn Growers Association – Brian Jones, Rod Williamson, www.iowacorn.org

• 2012 Crop Input Costs Increase, Along with Profit Margin Opportunities, ISU, August 2011

• Costs Increasing for 2012 Crop Production, Wallace’s Farmer, Sept 2011

http://wallacesfarmer.com/story.aspx?s=52757&c=0&pv=1

• Interior Iowa Daily Grain Prices, October 28, 2011 http://www.ams.usda.gov/mnreports/nw_gr110.txt

• US Corn Exporters Double Up on China Sales, The Journal of Commerce Online, October 21, 2011

http://www.joc.com/importexport/us-corn-exporters-double-china-sales

• Trio of Trade Agreements Pass Congress, Delta Farm Press, October 12, 2011 http://deltafarmpress.com/markets/trio-trade-

agreements-pass-congress

• NationalMaster.com http://www.nationmaster.com/graph/agr_gra_cor_con-agriculture-grains-corn-consumption


http://www.iowacorn.org/documents/filelibrary/checkoff/IowaCorn_B74E478E1F1E0.pdf

http://www.iowarfa.org/PDF/freedom.pdf

http://www.micorn.org/downloads/PLA_newsletter.pdf

http://www.ethanolfacts.com/

http://www.iowacorn.org/

http://wallacesfarmer.com/story.aspx?s=52757&c=0&pv=1

http://www.ams.usda.gov/mnreports/nw_gr110.txt

http://www.joc.com/importexport/us-corn-exporters-double-china-sales

http://deltafarmpress.com/markets/trio-trade-agreements-pass-congress

http://www.nationmaster.com/graph/agr_gra_cor_con-agriculture-grains-corn-consumption

Value Chain & Competitiveness Assessment


Soybean

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Soybean Industry Statistics – World Consumption

• Total soybean consumed in the world was 238,203

thousand metric tons (2009/10)

• The United States, Brazil, China, and Argentina consumed

over 70% of the annual world soybean supply.

– China is the #1 consumer of soybeans in the world. They

consumed 24% of the world soybean supply at 59,430

thousand metric tons per year (2009/10).

– The U.S. is #2, consuming 21% of the soybeans at 50,671


– Brazil is #3, consuming 15% of the soybeans at 36,797


– Argentina is #4, consuming 15% of the soybeans at 35,723


– The rest of the top 10 soybean consuming countries/regions

are: the EU-27, India, Mexico, Japan, Taiwan and Indonesia.

1

World soybean consumption, by country – 2009/10

24%

21%

15%

15%

6%

4%

2%2%

1%1%

9%

China

United States

Brazil

Argentina

EU-27

India

Mexico

Japan

Taiwan

Indonesia

Rest of the World

Source: USDA, PSD database, for 2009/10 crop year, accessed 10/25/11


Soybean Industry Statistics – US Consumption/Utilization

US Soybean Crop3,329 mbu

132 mbuDirect Use

4%

2010/11 US Soybean Crop Utilization

% Percent of Total US Soybean Crop

1

Meal Processed into Oil Processed into

1,648 mbuCrush

Feed(poultry, swine, beef, dairy, eggs,

petfood, aquaculture, other)

Food (flour, concentrate, isolate, fiber)

Industrial (adhesives, other)

1,500 mbuto Exports

Edible, refined(salad oil, bake/fry fat, margarine,

other)

Inedible Industrial(coatings-paint & resin, ink, lubricants,

soap & fatty acids, feed, solvents & cleaners, biodiesel, polyols, other)

Refining Loss

45%

50%

Seed

Feed (as whole beans)

Food Products

Other

Source: USDA – Foreign Agriculture Service,, Supply, Demand & Distribution Online, pulled 11/2/11


Soybean Industry Statistics – US Consumption/Utilization

US Soybean Crop3,060 mbu

120 mbuDirect Use

4%

2011/12 US Soybean Crop Utilization


1


1,635 mbuCrush





1,375 mbuto Exports


other)



Refining Loss

45%

53%

Seed


Food Products

Other

Source: USDA – Foreign Agriculture Service,, Supply, Demand & Distribution Online, pulled 11/2/11


Soybean Industry Statistics – Iowa Consumption/Utilization

Iowa Soybean Crop496 mbu

14 mbuDirect Use

3%

2010/11 Iowa Soybean Crop Utilization


1


364 mbuCrush





128 mbuto Exports


other)



Refining Loss

26%

73%

Seed


Food Products

Other

Source: ProExporter 1/14/11


Soybean Industry Statistics – World Trade

• Global trade in soybeans and soybean products has risen

rapidly since the early 1990s, and has surpassed not only

wheat—the traditional leader in agricultural commodity

trade—but also total coarse grains (corn, barley, sorghum,

rye, oats, millet, and mixed grains). Continued strong growth

in global demand for vegetable oil and protein meal,

particularly in China and other Asian countries, is expected

to maintain soybean and soybean-product trade well above

wheat and coarse grains trade throughout the next decade.

• Production of wheat, coarse grains, and oilseeds compete

with each other and with other crops for limited cropland.

Higher prices for vegetable oils, as a result of increased

demand for food use as well as for biodiesel production and

other industrial uses, are bringing previously un-cropped

land in Brazil, Indonesia, and Malaysia into soybean and

palm oil production.

• In most countries, the projected growth in total area planted

to all crops rises less than a half-percent per year. Area

expands more rapidly in countries with a reserve of

available land and policies that enable farmers to respond to

higher prices. Such countries include Brazil, Russia,

Ukraine, and some other countries in South America and

Eastern Europe. About two-thirds of the projected growth in

global production is derived from rising yields. However,

growth in crop yields has slowed during the last several

decades and is projected to continue doing so.

Global Trade: Wheat, Course Grains, Soybeans & Soybean Products

• The market impact of slower crop yield growth is partially offset

by slower growth in world population. Nonetheless, increasing

population is a significant factor driving overall growth in

demand for agricultural products. Additionally, rising per capita

income in many countries supplements population gains in the

demand for vegetable oils, meats, horticultural products, and

coarse grains. During the projection period, world per capita

use of vegetable oils is projected to rise 12%, compared with

5% for total coarse grains and 3% for meat. Per capita use is

projected to decline nearly 3% for wheat and 2% for rice.

• In the coming decade, overall gains in global grain trade come

from a broad range of countries, but particularly from countries

in Africa and the Middle East.

1

Source: USDA, Agricultural Projections to 2020, Feb 2011


• Economic growth and population increases in developing countries

are projected to boost demand for vegetable oils for food

consumption and for protein meals used in livestock production.

Vegetable oil used for biodiesel production is also projected to

increase. As demand for vegetable oils increases faster than for

protein meals, vegetable oil prices rise more rapidly than for

oilseeds and protein meals, particularly for rapeseed oil compared

with rapeseed meal.

• Many countries with limited opportunity to expand oilseed

production, such as China and some countries in North Africa, the

Middle East, and South Asia, have invested heavily in crushing

capacity in recent years. As a result, import demand for oilseeds

has grown rapidly and should continue. Global trade in soybeans is

projected to increase 30%, soymeal by 21%, and soy oil by 19%.

• In China, increasing per capita income is projected to continue a

rapid expansion of consumer demand for livestock products and

vegetable oils. Feed rations are expected to include an increasing

percentage of protein meal to improve rates of weight gain for

meat-producing animals. China will mostly import oilseeds for

crushing rather than large amounts of oilseed meals and oils. This

changes the composition of world trade by raising global import

demand for soybeans and other oilseeds rather than for oilseed

products.

• The EU is expected to expand biodiesel production using rapeseed

oil as the primary feedstock. Rapeseed area increases early in the

projections. Although EU imports of soybeans are projected to

decline, imports of soybean meal and soybean oil increase.

Global Exports: Soybeans, Soybean Meal, and Soybean Oil

• Argentina, Brazil, and the United States continue to account for

about 89% of the world’s aggregate exports of soybeans,

soybean meal, and soybean oil during the coming decade. In

Argentina, uncertainties about grain policies cause farmers to

shift some land to soybean production. Also, some pasture land

is converted to crops, especially to soybean production. This

enables Argentina to increase its soybean production, and its

share of world exports of soybeans and products remains above

30%. Brazil’s soybean area continues to increase, but an

increasing share of soybean production is crushed for domestic

feed and food use and its share of exports remains in the 25-31%

range. The U.S. share of world soybean and soybean meal trade

declines from 29% to less than 26% by 2020.

1



Soybean Industry Statistics – World Trade

Soybean Industry Statistics – World Imports

• World soybean trade is projected to rise rapidly, but

at a slower pace than in recent years, climbing nearly

30 million tons (~30%) during the next decade.

• The EU was the world’s leading importer of soybeans until 2002.

However, increases in grain and rapeseed meal feeding and

rising imports of soybean meal have resulted in declining

soybean imports since then. These trends are projected to

continue.

• Imports of soybeans and meal by East Asia (Japan, South Korea,

and Taiwan) are dominated by a continuing shift from importing

feedstuffs to importing meat and other livestock products. As a

result, this region’s imports of soybeans do not change much

during the coming decade. Small increases in soymeal imports

support slowly rising meat production.

• Mexico’s soybean imports are projected to increase by more than

20% during the projection period. These imports will support the

production of soybean meal for the Mexican poultry and pork

industries and soybean oil for domestic food consumption.

• In recent years, Argentina has imported more than a million tons

of soybeans to enable its crushing plants to operate at full

capacity. However, changes in Argentine policy provide

disincentives to import in the future. The policy impediment to

importing soybeans supports more rapid expansion in Argentine

soybean area in order to supply the needs of the country’s

crushers.

1

Global Soybean Imports

59%

41%China

Rest of World

Global Soybean Imports – 2010/11

Source: USDA, Agricultural Projections to 2020, Feb 2011; USDA – Foreign Agriculture Service,

Supply, Demand & Distribution Online



• China’s soybean imports have risen sharply and now

account for more than 50% of world trade. China will face

policy decisions regarding tradeoffs in producing or

importing corn and soybeans. The projections assume that

Chinese policies will pursue self sufficiency for domestic

corn production and let soybean imports increase. Thus,

China accounts for more than 90% of the projected 30-

million-ton growth in global soybean imports over the next

10 years. China’s underutilized oilseed crushing capacity

drives strong gains in soybean imports as China seeks to

capture the value added from processing oilseeds into

protein meal and vegetable oil. The use of vegetable oils for

biodiesel production is assumed to have a negligible impact

on China’s total vegetable oil use.

1

Global Soybean Imports

Source: USDA, Agricultural Projections to 2020, Feb 2011; USDA – Foreign Agriculture Service,

Supply, Demand & Distribution Online

59%

41%China

Rest of World

Global Soybean Imports – 2010/11


Soybean Industry Statistics – World Exports

• The three leading soybean exporters—the United States,

Brazil, and Argentina—have accounted for nearly 90% of

world trade in recent years. Although exports from other

countries, such as Uruguay, Paraguay, and Bolivia increase

during the projections, the share held by the traditional

exports remains near 90%.

• With continuing area gains, Brazil strengthens its position as

a leading exporter of soybeans and soybean products.

Combating soybean rust disease increases production

costs. However, as world oilseed prices rise relative to the

price of grains, soybeans remain more profitable than other

crops in most areas of Brazil. With increasing soybean

plantings in the Cerrados region and expansion extending

into the Legal Amazon region, the growth rate for Brazil’s

soybean planted area is projected to average nearly 2.5%

per year during the coming decade. During the next 10

years, soybean exports are projected to rise about 47%.

• Argentina’s export tax rates are higher for soybeans than for

soybean products, which favors domestic crushing of whole

seeds and exporting the products. However, in response to

world demand for soybeans for crushing, Argentina’s

soybean exports have risen sharply and are projected to

continue doing so, rising about 30% to nearly 18 million tons

by 2020. Most of the soybeans exported by Argentina go to

China.

Global Soybean Exports

• Other South American countries, principally Uruguay,

Paraguay, and Bolivia, respond to higher oilseed prices by

expanding the area planted to soybeans. Exports rise more

than 50% to nearly 11 million tons.

• Canada is the next largest soybean exporter, although its

export volume and growth are well below those of the

above-mentioned exporters.

• Ukraine responds to higher international market prices for

oilseeds by increasing production of rapeseed and

soybeans. Soybean exports from Ukraine are projected to

rise rapidly (32%), but from a small base.

1

Source: USDA, Agricultural Projections to 2020, Feb 2011 233 | Context | Iowa AgriScope 2030

Soybean Industry Statistics – U.S. Exports

• U.S. soybean and product exports exceeded $23 billion in

2010.

– China was the largest customer for U.S. soybeans with

purchases exceeding $10.8 billion.

– Mexico was the second largest market for U.S. soybeans

with purchases of nearly $1.5 billion.

– Other significant buyers included Japan with purchases of

$1.1 billion and Indonesia with purchases of $806 million.

– Canada was the largest customer for U.S. soybean meal at

$300 million, with the Philippines and Mexico each

purchasing $285 million.

– China was the largest customer for U.S. soybean oil with

purchases of $420 million, and Mexico was second with

purchases of $200 million.

Top 10 U.S. Export Customers $ Million - 2010

1



• World trade in soybean meal climbs by more than 12

million tons (about 21%) in the projections to 2020.

Continued growth in the demand for livestock products,

limited capability to increase oilseed production, and

relatively lower world prices for protein meals boost

demand for soybean meal in a number of countries with

rising middle-income populations. Lower import prices for

soybean meal relative to soybeans and grains provide

incentives for countries to use imported soybean meal at a

higher rate in livestock feed rations.

• The EU remains the world’s largest destination for soybean

meal throughout the projection period, despite increased

domestic feeding of grains and rapeseed meal. Although

there will be abundant supplies of low-cost rapeseed meal

available for feed as a result of the EU biofuels expansion,

there are technical limits on the amount of rapeseed meal

that can be incorporated in livestock rations. As a result,

growth in EU soybean meal imports is expected to continue

to increase and to account for more than one-fourth of the

increase in world soybean meal trade.

• The regions of Southeast Asia, Latin America, and North

Africa and the Middle East all become larger importers of

soybean meal due to increasing demand for livestock feed

and low oilseed meal prices.

• Russia is projected to experience rapid growth in soybean

meal imports, although from a small base. Increased

livestock production, especially from larger, more modern

Russian facilities, will boost the demand for soybean meal.

• Mexico’s strong growth in demand for protein feed and

vegetable oils is projected to continue.

• Although the projected growth rate for China’s use of

soybean meal is one of the highest in the world, most of the

meal will be supplied by domestic crush, either using

domestically produced or imported soybeans.

1

Global Soybean Meal Imports

Source: USDA, Agricultural Projections to 2020, Feb 2011 235 | Context | Iowa AgriScope 2030


• Argentina, Brazil, and the United States remain the three

major exporters in international soybean meal markets.

Together, their share of world exports rises slightly to 90%

during the next 10 years. Argentina, the world’s largest

soybean meal exporter, increases its share of the world

market from less than 50% in recent years to about 57%.

Trade shares held by all other major exporters decline.

• Argentina imposes higher export taxes on soybeans than

on soybean products. This has provided an incentive for

the country to develop a large oilseed crushing capacity.

With Argentina’s low cost of soybean production and the

trade policy incentives to export soy products, soybean

meal exports are projected to continue their robust growth.

• In Brazil, strong growth in domestic meal consumption due

to rapid expansion of the poultry and pork sectors limits

increases in soybean meal exports. Also, domestic

soybean crushing capacity is not expected to grow as fast

due to heavy competition from Argentina. Brazil’s share of

world exports declines from about 25% in recent years to

less than 19% by 2020.

• U.S. soybean meal exports remain at about 8 million tons

during the next 10 years. The U.S. share of world exports

declines steadily from about 15% in most recent years to

less than 12% by 2020.

• The volume of India’s soybean meal exports declines from

more than 3.5 million tons in most recent years to 1.5

million by 2020 as rapidly increasing poultry, egg, and milk

production absorbs more of India’s soybean meal

supplies.

• The EU continues to be a small but steady exporter of

soybean meal to Russia and other East European

countries where livestock production is expected to

increase significantly.

1

Global Soybean Meal Exports




• World soybean oil imports climb 1.8 million tons (19%) in the

projection years, bolstered by rising food use and increased

demand for use in biofuel production. China and India are the

world’s two largest soybean oil importers, primarily for food use.

In recent years, their combined imports have been more than a

third of total world trade. The growth in soybean oil trade will be

constrained by competition with palm oil, which claims the top

ranking in world vegetable oil trade.

• Income and population growth in Latin America, North Africa,

and the Middle East contribute to gains in soybean oil demand

and imports. Although rising international prices for soybean oil

will temper consumption, especially in developing countries,

imports by the North Africa and the Middle East region are

projected to be exceeded only by those of Latin America.

• India remains the world’s largest soybean oil importing country.

Factors that contribute to continued growth in imports include

burgeoning domestic demand for vegetable oils and limited

capacity to expand domestic production of oilseeds. Low yields,

associated with erratic rainfed growing conditions and low input

use, inhibit growth of oilseed production. India sharply reduced

its edible oil import tariffs to zero in 2008 in response to high

world prices. It is assumed that during the next decade, the

soybean oil tariff gradually rises toward the prior rate of 45%,

but that tariffs for the other major imported oils—palm and

sunflower—remain below their historical highs of 75-85%.

• China experiences a growing demand for vegetable oils,

and land-use competition from other crops constrains the

expansion of area planted to oilseed crops. However, with

the rapid increase in soybean imports for crush, China is

able to slowly decrease its imports of soybean oil during

the coming decade.

1


Global Soybean Oil Imports



• Argentina’s and Brazil’s combined share of world soybean oil

exports dropped from 84% in 2005/06 to 65% in 2009/10 due

to poor harvests. However, these countries are projected to

recover partially during the next 5 years to about 75% of world

trade.

• Argentina is the leading exporter of soybean oil, reflecting the

country’s large crushing capacity, its small domestic market for

soybean oil, and an export tax structure that favors exports of

soybean products rather than soybeans. Gains in Argentine

soybean production due to extensive double cropping, further

adjustments in crop-pasture rotations, and the addition of

marginal lands in the northwest part of the country, contribute

to increased soybean production and crush. Argentina’s soy oil

exports are projected to continue increasing even though more

soybean oil is expected to be used as a feedstock for biodiesel

production—with most of the biodiesel destined for export. The

projected 2011-2020 growth in soybean oil exports account for

60% of the increase in world soy oil trade.

• Brazil’s projected increase in soybean oil exports accounts for

most of the rest of global increases in soybean oil trade.

Although Brazil is also projected to use more soy oil for

biodiesel production, expansion of soybean production into

new areas of cultivation enables it to increase its volume of

soybean oil exports from its 2009/2010 reduced level. It does

not however, recover to the large volumes exported between

2002 and 2007.

• The United States remains the world’s third-largest

soybean oil exporter. U.S. soybean oil exports will be

constrained by increased use of soybean oil for biodiesel

production. U.S. canola oil imports from Canada and

palm oil imports from Southeast Asia are projected to

continue to grow strongly, and augment the U.S. edible

oil supply.

• In the EU, exportable supplies of vegetable oils are

limited by the growth in biodiesel production.

1


Global Soybean Oil Exports


Soybean Industry Statistics – World Supply Considerations

• The world annually produced 39.3 million metric tons of

soybeans in 1966-70, and reached 238.7 million metric tons

in 2006-10. The quantity increased 6.1 times during the half

century. – The US produced more than 50% of the world soybean

production until the 1980s but that share declined to 35% in

2006-10.

– Brazil and Argentina, though, have significantly increased

their shares steadily over the same period.

• Brazil is the second largest producer with 64.5 million

tons, or 27% of world production.

• Argentina ranks third producing 46.1 million tons and

19% of world output.

– The top four countries - United States, Brazil, Argentina, &

China - produce 88% of the world’s soybeans.

• The world soybean production is projected at 311.1 million

metric tons in 2020 and 371.3 million metric tons in 2030.

The annual growth rates are 2.5% from 2010 to 2020, and

1.8% from 2020 to 2030. The estimated quantity level in

2030 is approximately 1.7 times greater than that in 2005-

07.

• During the forecast period, Argentina’s production rises

rapidly by 4.5% annually from 2010 to 2020 and 2.8% from

2020 to 2030, when it reaches 108.4 million metric tons in

2030. At that time, Argentina is projected to become the top

soybean grower, producing 29.2% of the world’s output.

Shifts of Soybean Production

Shares of Top 7 Countries plus Continents

1

Source: World Soybean Production: Area Harvested, Yield & Long Term Projections, International

Food & Agribusiness Management Review, 2009;

USDA – Foreign Ag Service – Production, Supply and Distribution Online & Author’s Calculations

World Soybean Production Projection Summary

Production & Share

73% 77%

66%59%

50% 48% 46%39% 35%

0%0%

14%

17%

19% 19% 21%

26%27%

0%0%

4%6%

9% 10% 13% 18% 19%

21% 16%10% 11%

11% 11% 9% 8% 6%

1% 1% 1% 1%1% 2% 2% 1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rest of America

Rest of EUAS

Oceania

Africa

Canada

Paraguay

India

China

Argentina

Brazil

USA


Soybean Industry Statistics – U.S. Supply Considerations

• Among the feed grains, corn has the highest return above

variable cost. Soybeans, while being an excellent rotation

crop with corn, are also the major competitor with corn for

acreage. Realized net returns for soybeans were above

those for corn in marketing years 1996/97 through 2001/02

and also in 2006/07. Soybean planted area expanded

during these years. Net returns for soybeans are expected

to be below those for corn throughout the projection period,

due to lower relative prices caused by increased corn

demand by the ethanol industry.

• There are benefits to growing crops that may not be

reflected in a single year's cost and returns analysis. Thus,

expected net returns do not explain all planting decisions.

Maintaining rotations is an important objective for most

farmers. This provides numerous agronomic benefits and

may outweigh decisions based only on price signals.

Net returns for various crops

• Soybeans and corn work well in rotation because many of

the insects that attack one crop do not bother the other

crop. Many corn farmers alternate annually between corn

and soybeans. Corn benefits from increased fertilizer use

and carryover fertilizer benefits soybeans in the following

year. Likewise, soybeans roots host bacteria that convert

nitrogen from the air into a form usable by plants.

Carryover nitrogen from this process benefits the following

corn crop. Before genetically modified, herbicide-tolerant

soybeans became available, corn in the rotation was

preferable for greater weed control. Corn remains an

important rotation crop as soybeans planted following

soybeans typically suffer disease-related yield losses.

1

* It is not clear whether or not this includes land costs.

Source: ERS-USDA Briefing Room: Market Outlook


Soybean Industry Statistics – Iowa Cooperatives(Note: These cooperatives handle other crops beyond soybeans)

Consolidation with the grain and farm supply cooperatives has been vast over the past 20+ years (1990 = 256; 2011 = 58). However the impact on the local communities of Iowa has not dwindled.

1


Iowa Railroad Service Map - 2010

1


Soybean Industry Statistics – Iowa Rail Lines

Iowa Grain Loading & Processing Facilities - 2010

In most cases, the larger the rail loading facility, the more competitive they become.

1



Iowa Biodiesel and Ethanol Processing Plants - 2010

1



Iowa Soybean Industry Economic Impact

Soybean Production

• Iowa is the #1 producer of soybeans in the U.S.

• In 2010, 32% of Iowa’s farmland (9.73 million acres harvested) was soybean. The average yield across those acres was 51

bushels/acre. Iowa farmers produced 496 million bushels of soybeans. With soybean prices at $11.70, this crop contributed

$5.8 billion (value of production) to the state’s economy.

• Additional value, income, and jobs are created up and down the soybean value chain

– Rail & truck transportation

– Crop Insurance

– Equipment

– Seed

– Chemicals

– Fertilizer

– Soy processing

– Livestock consumption

2

Sources: USDA NASS, Iowa Soybean Association;

Iowa Agriculture Quick Facts 2010


Iowa Soybean Industry Economic Impact


Purchases

(million $’s)

GDP

(million $’s)

Household

Earnings

(million $’s)

Employment

(Jobs)

State Tax

Revenues

(million $’s)

Operations

Ethanol 4,999.6 10,473.6 1,887.8 59,010 476.0

Biodiesel 224.3 471.2 103.0 2,911 22.3

Subtotal 5,224.0 10,944.8 1,990.8 61,921 498.3

New

Construction

Ethanol 520.7 547.4 295.5 8,260 34.1

Biodiesel 0.0 0.0 0.0 0 0.0

Subtotal 520.7 547.4 295.5 8,260 34.1

Total 5744.7 11,492.2 2,286.3 70,181 532.4

Sources: John H. Urbanchuk, LEGC LLC, Contribution of the Biofuels Industry to the Economy of Iowa; Biodiesel Returns

US Soybean Farmers ‘ Investment by the Billions, National Biodiesel Board

Soybean Processing - Biodiesel

• Biofuels production is part of the manufacturing sector that

adds value to agricultural commodities produced in Iowa

and makes a significant contribution to the Iowa economy.

• Iowa produced 85 million gallons of biodiesel from nine

operating plants in 2009.

• In 2009, biofuels production contributed $11.5 billion to the

Iowa economy or 8% of total state GDP. Half of industry

GDP was generated through purchases and the other half

through value-added operations. Approximately 95% of the

industry’s contribution to state GDP came from operations

and the rest from new construction.

– Biodiesel contributed $471.2 million or 4% of the total

• It generated $103 million in household earnings, 2,911 full

and part time jobs and state tax revenues of $22.3 million.

• The industry also consumed $5.75 billion of raw materials,

other inputs, goods and services. Just over half of

purchases were for feedstocks (grains, vegetable oil and

animal fats).

• The Iowa biodiesel industry consumed 353 million pounds of

soybean oil, 218 million pounds of other fats and oils and 71

million pounds of corn oil.

2

• An updated 2011 independent study funded by the United

Soybean Board (USB) and soybean check-off found that:

– The biodiesel industry’s demand for U.S. soybean oil

supported U.S. soybean prices by as much as $.27 per

bushel over the past five years, bringing U.S. soybean

farmers an additional $2.7 billion in net returns.

– The increased demand for soybean oil resulted in a larger

supply of U.S. soybean meal, decreasing feed prices paid by

U.S. poultry, livestock and fish farmers by between $16 and

$48 per ton in marketing years 2005-2009.


Inputs *

* Seeds

* Agrochemical

* Fertilizer

* Farm Equipment

* Land

* Labor

$4.3 billion

Farm Production

$5.8 billion

Exports

Crushing

Oil

Food

Industrial

Hulls/Other

Food/Feed

Industrial

Protein

Feed

Food

Industrial

3

Sources: USDA-NASS; Canada’s Soybean Value Chain; Estimated Costs of Crop

Production in Iowa, 2011

* Estimate based on 9,800 thousand acres planted to soybeans in 2010 & ISU Estimated Costs of Crop Production in Iowa for Soybeans in 2010 of $433.65/acre

Growth in the soybean value chain can continue as long as Iowa continues to have a strong livestock sector and

opportunities for export.


Soybean Industry Value Chain Summary – Iowa (2010)

Iowa Soybean Industry Value Chain Summary –

Production Costs, Soybeans following Corn

• Continued sustainability and growth of Iowa’s soybean

sector will depend upon the state’s competitiveness

compared to other Midwestern states.


continue to do so. They peaked in 2009 at $491 per acre.

In 2012, they are expected to be even higher than 2009.

– Machinery costs have averaged around 14% of total

production costs yet dipped to 11% in 2009 at almost $56

per acre.

– Seed, Chemicals, etc. costs have gradually increased,

peaking in 2009 at 41% ($203/acre) of total production

costs. They are expected to exceed 2009 levels in 2012.

– Labor costs have decreased (8% to 5% although they are a

very small portion of total production costs).

– Land prices per acre as a percent of total production costs

have also decreased from 47% to 42%. However, on a

dollar for dollar comparative basis, they peaked in 2009 at

$491/acre.

– An August report from a private survey of professional farm

managers in Iowa, Minnesota and Illinois found that $400

cash rents will be commonplace in 2012 on highly

productive land. Increases of 10-20% were thought to be

common, depending on when the lease terms were

established.

3

Sources: Estimated Costs of Crop Production in Iowa, 2011; Iowa Soybean Association;

2012 Crop Input Costs Increase, Along with Profit Margin Opportunities, 2011

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

2003 2004 2005 2006 2007 2008 2009 2010 2011

Land

Labor

Seed,Chemicals,etc.

Machinery

Distribution of Iowa Soybean Production Costs –

Soybeans following Corn

13%

36%

6%

45%Machinery

Seed,Chemicals,etc.

Labor

Land

Distribution of Iowa Soybean Production Costs, 2010 –

Soybeans following Corn

$433.65 per acre$8.67 per bushel


Soybean Production

• Yields have continued to increase at ~0.5 bushels/acre/year. Yields are expected to continue to increase. However, they will

need to increase at a more rapid pace (1.6 bushels/acre annually) to meet growing demand.

• In 2010, Iowa farmers produced 496 million bushels of soybeans. With soybean prices at $11.70, this crop contributed $5.8

billion (value of production) to the state’s economy

– A $.50 per bushel increase in soybean prices would add $248 million to the state’s economy.

– A 10% increase in yield at $11.70/bushel would add $581 million to the state’s economy.

• In 2011, Iowa farmers are estimated to produce 468 million bushels of soybeans. With soybean prices at $13.15, this crop will

contribute ~$6.15 billion (value of production) to the state’s economy

– A $.50 per bushel increase in soybean prices would add $234 million to the state’s economy.

– A 10% increase in yield at $11.70/bushel would add $615 million to the state’s economy.

4

Sources: USDA-NASS; World Agriculture & Supply Estimates, USDA,

October 2011


Soybean Industry Outlook – Future Opportunity

Soybean Industry Outlook – Future Opportunity

Soybean Processing – Biodiesel

• The biodiesel industry is forecast to continue to grow on the

strength of the biodiesel mandate within RFS2, despite the

loss of the blender’s credit by the end of 2011. RIN values

surged at the beginning of the year to draw more capacity into

production.

• SBO and animal fats are expected to provide the bulk of the

feedstocks needed in the 10/11 marketing year.

• Use of SBO for biodiesel production peaks in 11/12 and

declines gradually thereafter. Corn oil extracted from DDGS

at ethanol plants accounts for 20% of biodiesel feedstocks by

16/17, gaining share at the expense of animal fats.

4

Biodiesel

Sources: FAPRI, U.S. Baseline Briefing Book Projections for agricultural and biofuels markets;

Iowa Renewable Fuels Association

0

200

400

600

800

1,000

1,200

10/11 11/12 12/13 13/14 14/15 15/16 16/17

Eth

an

ol S

up

ply

(m

illio

n g

allo

ns)

Soy-based Corn Oil-based Other

• According to a recent economic impact analysis released

by IRFA, economist John Urbanchuk found that increasing

Iowa biodiesel production from 2010 levels to near its

capacity of 315 million gallons per year would:

– Boost Iowa’s GDP by $1.7 billion

– Add almost $375 million to Iowa household earnings

– Support more than 6,300 new jobs in all sectors of the Iowa

economy

– Grow state tax revenue by nearly $80 million per year


Soybean Industry Outlook – Future Opportunity 4

Recent Developments Affecting Soybean Production, Consumption and Trade include:

• Rapid growth of economies in the developing world, especially in Asia, where increased per capita income is leading to increased

demand for animal protein and cooking oil

• Depreciation of the dollar

• Increase in Chinese processing capacity

• Rise in global biodiesel production

• Potential for high oleic soybean oil to gain market share that was lost because of trans fats

• Higher demand for specialty oils

• Growth in the global aquaculture sector

• Potential growth for India to move from being a soybean exporter to a soy importer relatively soon

• Poultry will be the biggest growth engine among the livestock sector because the Middle East prefers poultry. Pork will also grow

due in part to countries such as China, Thailand, South America and Russia.

Source: How the Global Oilseed and Grain Trade Works


Soybean Industry Outlook – Risks to Growth 4

• Current issues facing growers

– Competition from corn for acres and DDGs from ethanol plants displacing some of the soybean meal demand

– Although average farm prices for U.S. grown soybeans reached historic highs in 2008, average operating and allocated overhead

costs have exceeded average total gross value of production in heartland states in 10 of the past 13 years. Increased productivity is

needed to ensure adequate supplies to meet greater global demand for soybeans in food, feed and fuel applications; and to lower

costs to sustain profitability in soybean production

– Rising costs for inputs (fertilizer, crop protection products, seed, fuel, land)

– Increased pests and diseases – soybean aphids, soybean cyst nematode (SCN), soybean rust, sudden death syndrome (SDS), iron

deficiency chlorosis, phytophthora root & steam rot, and other plant pathogens and diseases

– Export market acceptance of GM soybeans

– Genetic development of conventional soybean varieties

– Access to Roundup Ready 1 genetics into foreign markets (expiring patent products)

– Foreign sustainability barriers to imports

– Threats of reducing funding to government assistance for exports (i.e. research trade)

– Large federal reductions in funding for American agriculture

– Potential failure of the transportation (rail, river, roads and bridges) infrastructure to keep up with demand

– Threat of Chinese recession/economic crisis due to internal debt

Sources: 2009-2013 Strategic Plan for Advances in Soybean Research: Planning for Iowa’s Growth in Global Soybean Production;

Canada’s Soybean Value Chain



• Current concerns facing elevators (feed and grain cooperatives)

– Access to capital and that capital is needed for two reasons:

• Building infrastructure (grain handling, grain storage and fertilizer storage)

– The elevators/coops can not stay ahead of the volume and speed with which this crop comes into them.

• Managing the volatility in the marketplace

– Ability to hire and retain quality employees (High school graduates, 2 year graduates and 4 year graduates)

• This is a huge issue because no one can move a country elevator to a bigger city (i.e., Ames)

Source: Dave Holm, Iowa Institute of Cooperatives



• Current concerns facing Biodiesel

– FAPRI is forecasting SBO prices of over $0.50 per pound to 20/21. It

seems highly unlikely that there will be any additional growth in soy-

based biodiesel.

– The permanent loss of the blenders credit could convince a number of

firms to finally exit the business.

– The U.S. biodiesel industry has been operating at ~20% utilization for five

years. Capital is usually redeployed by investors when it fails to provide

adequate returns. A lot of capacity may only exist on paper.Political support for biofuels in







Soybean Industry - References

• USDA-NASS Quick Stats http://www.nass.usda.gov/QuickStats/Create_Federal_All.jsp

• USDA – Foreign Ag Service – Production, Supply and Distribution Online http://www.fas.usda.gov/psdonline/psdQuery.aspx

• USDA, World Agricultural Outlook Board, Agricultural Projections to 2020, Feb 2011

http://www.usda.gov/oce/commodity/archive_projections/USDAAgriculturalProjections2020.pdf

• USDA – World Agriculture Supply & Demand Estimates, October 12, 2011 http://www.usda.gov/oce/commodity/wasde/latest.pdf

• ERS-USDA Briefing Room: Market Outlook

• USDA, PSD database, for 2009/10 crop year, accessed 10/25/11

• USDA Agricultural Projections to 2019 http://www.ers.usda.gov/Publications/OCE101/OCE101.pdf

• USDA Agricultural Projects to 2020 – US Crops www.ers.usda.gov/Publications/OCE111/OCE111d.pdf

• WASD, September 2011, for 2009/10 Crop Year

• Importance of the Renewable Fuels Industry to the Economy of Iowa, January 24, 2011


• Iowa Soybean Association http://www.iasoybeans.com/index.php

• World Soybean Production: Area Harvested, Yield & Long Term Projections, International Food & Agribusiness Management Review,

2009 http://ageconsearch.umn.edu/bitstream/92573/2/20091023_Formatted.pdf

• Iowa Renewable Fuels Association http://www.iowarfa.org/pr031811.php

• IRFA Wishes Iowans a Happy Biodiesel Day! News Release, Iowa Renewable Fuels Association, March 18, 2011

http://www.iowarfa.org/pr031811.php

• The Biofuel Industry’s Contribution to the Iowa Economy http://www.iowarfa.org/biodiesel_facts.php

• Dave Holm, Iowa Institute of Cooperatives


http://www.nass.usda.gov/QuickStats/Create_Federal_All.jsp

http://www.fas.usda.gov/psdonline/psdQuery.aspx

http://www.usda.gov/oce/commodity/archive_projections/USDAAgriculturalProjections2020.pdf

http://www.usda.gov/oce/commodity/wasde/latest.pdf

http://www.ers.usda.gov/Publications/OCE101/OCE101.pdf

http://www.ers.usda.gov/Publications/OCE111/OCE111d.pdf


http://www.iasoybeans.com/index.php

http://ageconsearch.umn.edu/bitstream/92573/2/20091023_Formatted.pdf



http://www.iowarfa.org/biodiesel_facts.php

Soybean Industry - References

• Soy Demand is Growing All Over, United Soybean Board, January 26, 2011 http://unitedsoybean.org/topics/global-

opportunities/soy-demand-is-growing-all-over

• Soy Stats website http://www.soystats.com/2010/Default-frames.htm

• 2009-2013 Strategic Plan for Advances in Soybean Research: Planning for Iowa’s Growth in Global Soybean Production

• 2012 Crop Input Costs Increase, Along with Profit Margin Opportunities, ISU, August 2011

• Canada’s Soybean Value Chain, Soy 20/20 http://www.soy2020.ca/pdfs/Canadas-Soybean-Value-Chain.pdf

• Estimated Costs of Crop Production in Iowa, 2011 http://www.extension.iastate.edu/publications/fm1712.pdf

• Spectrum Commodities http://www.spectrumcommodities.com/education/commodity/statistics/soybeantable.html

• How the Global Oilseed and Grain Trade Works http://www.soyatech.com/userfiles/file/tradeflow_manual%281%29.pdf

• ProExporter

• Contribution of the Biofuels Industry to the Economy of Iowa, John H. Urbanchuk, LEGC LLC

• Biodiesel Returns U.S. Soybean Farmers' Investment by the Billions, National Biodiesel Board, www.biodiesel.org

• John Baize, President, John Baize and Associates

• FAPRI, U.S. Baseline Briefing Book Projections for agricultural and biofuels markets


http://unitedsoybean.org/topics/global-opportunities/soy-demand-is-growing-all-over

http://www.soystats.com/2010/Default-frames.htm

http://www.extension.iastate.edu/publications/fm1712.pdf

http://www.spectrumcommodities.com/education/commodity/statistics/soybeantable.html

http://www.soyatech.com/userfiles/file/tradeflow_manual(1).pdf

http://www.biodiesel.org/



Pork

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Pork Industry Statistics – World Markets and Trade

• US exports are forecast up 3% to 2.3 million tons with

larger shipments to China and Mexico expected to

outweigh reduced demand from South Korea and

Russia. Exports are increasingly important to the U.S.

pork industry, accounting for 22% of production.

• EU exports are forecast down 5% to 1.9 million tons

largely on tighter supplies as well as weaker demand by

some key importers.

• Lower shipments are expected to Russia due to lower

import quotas and South Korea where domestic

supplies are recovering.

• Brazil exports are forecast down 2% to 570,000 tons as

Russia continues to ban imports from three major pork

producing states. However, Brazil is expected to

expand exports to Hong Kong, Argentina, and other

markets.

• Canada is unchanged at 1.2 million tons as a relatively

strong Canadian dollar and limited supplies are

expected to constrain their competitive position.

1

Source: Livestock and Poultry; World Markets and Trade, USDA-FAS, October 2011

US Builds Its Pork Export Market Share



• US pork exports have seen a steady incline since the 1980s.

• 2010 total US pork exports were $4.781 billion. (1,917,649 metric

tons)

• Top 6 export markets include: Japan, Mexico, Canada, Hong

Kong/China, South Korea, and Taiwan.

• “Many regions of the world are facing very tight pork supplies and

exports from many pork-producing countries are stagnant. The

efficiency and resourcefulness of U.S. producers have allowed

our industry to fill this need, and through aggressive campaigns

such as the global pork butt initiative, we are moving a wider

range of cuts than ever in overseas markets. This has solidified

our position as the world’s leading pork exporter,” according to

USMEF President and CEO Philip Seng in August 2011.

Source: Livestock and Poultry; World Markets and Trade, USDA-FAS, October 2011;

Statistics provided by US government & compiled by US Meat Export Federation ;

August Pork, Beef Exports Soar to New Heights, US Meat Federation, August 2011

1

US Pork Exports (Carcass Weight, Annual)

US Pork Exports to Major MarketsUS Pork Exports to Major Markets



• Imports are forecast down 4% to 6.0 million tons,

constrained by a sharply lower Russian TRQ and

reduced South Korean import demand. Other major

importers are forecast nearly unchanged or, in the case

of Mexico and China, slightly higher.

• Russia’s imports are forecast to drop 25% to 700,000

tons, due mostly to a 30% cut in the import quota in an

attempt to promote domestic production. However, out-

of-quota shipments are expected to continue to be

significant. Lower imports combined with modest

production growth are expected to result in a decline in

consumption.

• South Korea’s imports are expected to fall 20% to

500,000 tons, yet will remain significantly higher than

2010 pre-FMD-impacted levels. The special zero duty

TRQs to facilitate imports in 2011 are not expected to

continue.

• Mexico’s imports are forecast up 3% to 650,000 tons

as pork is expected to be more price competitive vis-à-

vis other meats. Additionally, the expected reduction of

Mexican retaliatory tariffs on hams and shoulders are

expected to make U.S. pork more competitive.

1

Russian and South Korean Imports Fall

• China’s imports are forecast 2% higher to 560,000 tons as

expanding domestic supplies are unable to meet rising

demand.

• Japan’s imports are expected to remain flat at 1.2 million

tons as greater domestic supplies limit import growth.


Pork Industry Statistics - Consumption

• Pork is one of the most widely eaten meats in the world,

accounting for about 38% of meat production worldwide,

although consumption varies widely from place to place.

• According to the USDA-FAS, nearly 100 million metric tons

of pork were consumed worldwide in 2008 (preliminary

data).

• Increasing urbanization and disposable income have led to

a rapid rise in pork consumption in China, where 2006

consumption was 20% higher than in 2002, and a further

5% increase was projected in 2007.

• Pork is popular throughout eastern Asia and the Pacific,

where whole roast pig is a popular item in Pacific Island

cuisine.

– It is consumed in a great many ways and highly esteemed

in Chinese cuisine.

– There, pork is preferred over beef for economic and

aesthetic reasons.

– The pig is easy to feed and is not used for labor.

– The colors of the meat and the fat of pork are regarded as

more appetizing, while the taste and smell are described

as sweeter and cleaner.

– It is also considered easier to digest.

1

2008 Worldwide Pork Consumption

Sources: USDA-FAS; Food for Thoughts, Global Food Trends, Science News Online,

May 2003; Livestock and Poultry: World Markets and Trade, Circular, USDA-FAS,

October 2006; Encyclopedia of Asian Food. Melbourne: William Heinemann Australia.;

The Modern Art of Chinese Cooking, New York: Hearst Books261 | Context | Iowa AgriScope 2030

Pork Industry Statistics – World Production

• Global pork production is forecast 2% higher to a record

103.4 million tons. Growth is mostly attributed to recovery

in South Korea and China. Modest growth is also expected

from major exporters the United States, Russia, and Brazil.

• South Korea is forecast up 21% to 1.0 million tons as their

pork industry rebuilds following the devastating foot and

mouth disease (FMD) outbreak that slashed their

production by 25%. Record high swine and pork prices

have encouraged producers to quickly rebuild despite

higher compound feed prices. Sow inventories have

expanded rapidly and beginning sow stocks are expected

to reach 98% of pre-FMD levels. Producers are expected to

continue to rebuild through 2012. However, it is unlikely

that total inventories at the end of 2012 will reach pre-FMD

levels due to new regulations increasing minimum barn

space requirements and environmental regulations.

Additionally, the recently implemented Free Trade

Agreement with the EU is expected to increase relative

competitiveness of EU pork, which in turn is expected to

put downward pressure on Korean production.

Global Pork Production Rebounds

• China’s production is forecast to recover 4% to 51.3 million

tons following swine disease problems and poor producer

returns. The rebound is being fueled by sharply higher

prices and recent government measures such as the

productive sow subsidy, although swine inventories are not

expected to fully recover in 2012. Expansion in small scale

operations, which still account for a majority of production,

is being constrained by higher feed costs and swine

disease threats. Meanwhile, large scale operations report

some difficulties in acquiring additional land necessary for

expansion.

1

Source: Livestock and Poultry: World Markets and Trade, USDA-FAS, October 2011262 | Context | Iowa AgriScope 2030

Pork Industry Statistics – World Production

• The United States is forecast up 2% to 10.5 million tons.

Producers are expected to continue to benefit from

productivity gains, with the pig crop up 2% while beginning

sow stocks have increased only slightly. Greater available

supplies compared to competing proteins are expected to

bolster domestic consumption.

• Russia is forecast up 3% to 2.0 million tons, supported by

positive producer gains and government support and

investment. Producers have expanded their breeding herds

in the face of October 2011 lower feed prices, less import

competition due to a sharp reduction in the import quota,

and the prospect of higher pork prices. Production growth

is expected to come from larger operations, as smaller

producers find it difficult to compete with new, modernized

farms.

• Japan’s production is forecast up 2% to 1.3 million tons as

producers are expected to rebuild. Greater domestic

supplies are expected to mitigate import demand.

Global Pork Production Rebounds

• The Canadian hog industry has reached a turning point

after several years of decline. Pork production is forecast

up 1 % to 1.8 million tons with modest increases in

beginning sow inventories and the pig crop. Relatively high

feed costs and uncertainties in both pork prices and foreign

demand will likely temper growth.

• Brazilian pork production is forecast up 2%, to 3.3 million

tons, as domestic demand strengthens in response to

industry promotions. Consumption is also expanding

among the growing Brazilian middle class, as pork prices

are competitive with beef.

1

Source: Livestock and Poultry: World Markets and Trade, USDA-FAS, October 2011263 | Context | Iowa AgriScope 2030

Pork Industry Statistics – US & Iowa Production

• The number of swine in Iowa has grown in the past 20

years.

• The breeding herd has been slowing, declining nationally

and in Iowa. Increasing litter size has offset the need for

more sows.

• Market hog numbers continue to increase in Iowa as the

state’s hog industry has increased importation of feeder

pigs from other states or Canada. Iowa’s feed cost

advantage for finishing hogs is more pronounced than its

cost advantage in the farrowing sector which requires more

labor and capital investment.

• As the number of farms with hogs has declined and the

number of total hogs has been increasing, the inevitable

result is that the average number of hogs per farm has

increased.

• Iowa currently produces about a sixth of the nation’s litters

but feeds almost a third of the nation’s hogs.

1

Swine Breeding Herd – U.S. and Iowa

Market Hog Inventory – U.S. and Iowa

Source: Iowa Concentrated Animal Feeding Operation Air Quality Study, Feb 2002;

Updated Information by Shane Ellis, ISU Ag Extension Economist


Pork Industry Statistics – Iowa Production

• Inventories have varied cyclically over time, but have

trended upward.

• Sustained profitability in the hog production enterprise

from 2004-2007 spurred expansion in the swine

industry. The introduction of a new vaccine for

circovirus resulted in a notable increase in efficiency

and production. However, an excessive hog supply,

falling hog prices and increased feed costs resulted in

record losses in 2008 and 2009. Modest profitability

returned in 2010 and 2011.

• Average monthly return to hog production in Iowa is

estimated to be $5-6 per head in 2011.

• Iowa has grown its pork production capacity over the

past ten years. However, the hog finishing capacity in

Iowa grew faster than farrowing capacity as weaned

pigs are brought in from surrounding states and

Canada.

1

Iowa Hog Inventory and Share of U.S. Hogs

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

10

00

He

ad

IL

IND

IOWA

MN

NC

4th Quarter Market Share of the Top 5 Pork Producing States

2001-2010

See next slide for trends (2001-2011) regarding returns to

hog production.

Source: The Iowa Pork Industry 2008: Patterns and Economic Importance, ISU, 2008 – Updated by Shane

Ellis, ISU Ag Extension Economist


• The hog industry continues to gravitate to larger

operations. While the number of very small (<100

head) swine operations has increased with interest in

hobby farming, market share from operations with less

than 2000 head has been declining.

• The dropout from production of the smaller farms has

been largely picked up by expansion within the larger

pig production segment.

• Within Iowa, the number of small swine operations has

declined dramatically in the past two decades. Total

hog operations in the state have declined by more than

half in the state, while the number of larger operations

has more than doubled.

• While USDA data was not available specifically for Iowa

after 2007, the period from 2008-09 saw a continued

decline in small operation numbers as high feed costs

and heavy losses pushed those small operations out of

the industry.

1

Changes in U.S. number of Pork Operations by Size

and Percentage of U.S. Marketings

Herd Size 2004 2009 % change 2004 2009

1-99 41,980 50,370 20.0% 1.0% 0.9%

100-499 9,800 5,370 -45.2% 4.0% 2.2%

500-999 3,830 2,050 -46.5% 4.5% 2.2%

1000-1999 2,300 1,900 -17.4% 6.0% 4.0%

2000-4999 1,850 2,200 18.9% 9.5% 9.7%

5000-9999 620 745 20.2% 7.0% 8.0%

10000-19999 290 350 20.7% 7.0% 7.3%

20000-49999 130 185 42.3% 7.0% 9.0%

50000+ 110 130 18.2% 54.0% 56.7%

% of MarketingsNumber of Operations

Herd Size 1997 2004 2007 % chg 2004-07

1-99 3400 1300 900 -31%

100-499 6900 2600 2300 -12%

500-999 3900 1600 1500 -6%

1000-1999 2250 1600 1500 -6%

2000-4999 1250 1600 1700 6%

5000+ 300 500 600 20%

Total Operations 18000 9200 8500 -8%

Changes in Number of Iowa Pork Operations By Size




Pork Industry Statistics – Industry Structure

• Total hog marketings in Iowa have increased in recent

years but the number of farms raising hogs has continued

to decline.

– Since 1999, the number of farms with hogs decreased

from 14,500 to 8,500 farms.

– Meanwhile, the average inventory of hogs has

increased from 1,062 to 2,282 per farm.

• Structure of Iowa inventory (2007)

– 16% of the hogs are on farms with < 2,000 head

inventory.

– 30% of hog inventory on farms with 2,000-5000 head.

– 54% of hog inventory on farms with > 5,000 head of

hogs.

1

Iowa farms with hogs and hogs per farm

Percent of inventory by size of Iowa hog farm, 2007

Source: The Iowa Pork Industry 2008: Patterns and Economic Importance, ISU, 2008267 | Context | Iowa AgriScope 2030

Pork Industry Statistics – Number and Size of Farms

Pork Industry Statistics – Number & Size of Farms

• One reason for the increased herd sizes is the greater

potential for profit.

• This table shows the percentage of farms that reported

a profit for the year 2000.

• It is clear that the higher percentage of smaller farms

were in the breakeven or net loss return categories

when compared to larger farms.

• The reasons for this are many, but do include those

mentioned earlier (Prior Slide – Pork Industry Structure)

• Larger operations are able to spread out labor,

management and fixed costs over more pigs. Larger

operations also tend to be more proactive in adopting

improved production methods and animal genetics.

• Larger farms are more consistently making a profit

when compared to smaller farms.

1

Profitability by herd size (number of sows) in the US (2000)




Pork Industry Statistics – Iowa Production 1

Estimated Returns to Farrow to Finish Hog Production,

$ Head, ISU Extension


Pork Industry Economic Impact

• Total industry output measures total dollars of goods and

services produced by an industry, including government

and non-government activity.

• The estimated $4.3 billion of gross output from pork

production activity is linked directly into the state’s hog

slaughtering and processing sectors.

• The total sales from the pork production and processing

sectors support additional input purchases, spending on

transportation and other services, as well as consumer-

related purchases worth $16.1 billion of direct & indirect

sales throughout the Iowa economy.

• This output, or gross sales number should be used with

caution because the value of the hog is counted twice at

the farm level and as part of the total value of pork

products when it is sold from the processor.

• While much of the impacts are concentrated in the

agricultural and input-supply sectors, economic linkages

beyond the farm gate capture additional activities such as

transportation, handling, processing and the personal

consumer spending effects. As a result, the effects of the

pork industry are distributed throughout the economy,

including the services and trade sectors.

2

Economic importance of pork industry in Iowa - 2008

• ~ $340.3 million of direct income to pork producers is linked

to an additional $2.2 billion of income throughout the Iowa

economy, including the pork-processing sector, for a total

impact of $2.55 billion of personal income.


Pork Industry Economic Impact – Value Added

• Total Value added measures the total gain in economic

activity to the economy resulting from production of goods

or services. Wages, salaries, taxes & profits are included

in the value-added measure.

• The value-added measure is a good indicator of net

economic activity as only the net incremental value is

summed at each transaction to avoid the double counting

issue that occurs when using the total industrial output

measure.

• The estimated $477 million of value added to pork

production is linked to $3.62 billion of additional indirect and

induced value-added activity in the state’s economy for a

total value added of $4.1 billion.

2

Economic importance of pork industry in Iowa - 2008


Pork Industry Economic Impact - Employment

• About 64,000 Iowa jobs are involved in various aspects of the hog industry ranging from input suppliers to producers, to

processors and handlers as well as main-street businesses that benefit from purchases by people in these industries.

• Estimating the labor component involved in hog production represents a special challenge.

• Government sources such as the USDA Hogs and Pigs report estimate that 8,500 farms are involved in hog production, although

many of them operate at a scale too small to be counted as fulltime enterprises.

• Although an estimated 8,500 farms are reported to be involved in hog production in 2007, based on the FTE standard of these

budgets, an estimated 6,131 workers are required to produce the current volume of hogs in Iowa.

• The 6,131 jobs include farm proprietors as well as farm workers and can be interpreted as FTE positions.

• The 6,131 plus the 17,500 at the slaughter and processing level generate a chain of economic activity that supports an additional

39,700 jobs throughout the rest of the economy.

• This service sector provided the largest number of secondary jobs followed by Finance, Insurance and Real Estate and Retailing

(FIRE). The higher number of jobs in services combined with the lower levels of income suggests that many of these jobs are

less than full time.

2


Pork Industry Value Chain Summary 3

Iowa pork production and processing sector


Pork Industry Value Chain Summary

• The largest single category of expenditure is feed costs.

• With 32.08 million head produced annually, 291.6 million

bushels of corn valued at $1.134 billion are used in Iowa.

• Feed supplements and additives represent another $811.9

million of purchased inputs from suppliers in Iowa. The use

of this scale of feed supplements helps support soybean

prices, the soybean processing industry, local elevators and

transportation services based in rural areas.

• In addition to the backward linkage effects of purchased

inputs by pork producers, forward linkages can be traced to

the slaughter and processing level for impact on the state's

economy. Based on estimates of inter-industry flows used

in the state Input-Output model, the cost of live animals

represents about 50 percent of the total value of the pork at

the slaughtering level and a smaller share at the

processor's product. The remaining margin is for other

inputs including labor, proprietor’s income, and return on

investment. Farm level effects, the backward and forward

linkages, generate significant additional impacts throughout

the Iowa economy.

3

Iowa pork production and processing sector

• The backward linkages include purchased inputs, supplies

and services used by hog producers. The forward linkages

include further value added activities occurring after the

farm gate such as meat preparation and processing.

• Total inputs, including labor, used by the Iowa hog industry

are estimated based on aggregated cost of production

budgets weighted according to the share of hog production

occurring in different types and sizes of production

systems.


• Continued sustainability and growth of Iowa’s pork


compared to other regions, especially those closer to

major market centers.

• The primary advantage Iowa pork producers enjoy over

other pork producing regions is access to lower cost

feed. Feed is the largest component, representing

~64% of production costs.

• Consequently, feed prices have a dramatic impact.

Iowa has a feed price advantage due to its extensive

farmland and will likely maintain that advantage for the

foreseeable future.

• Higher oil prices have resulted in additional cost of feed

transportation from the Midwest to corn deficient

regions.

• But feed prices have increased more in corn importing

regions.

3

• The largest non-feed cost items provide the greatest

opportunity for producers in other regions to compensate

for Iowa’s feed cost advantage.

• Production efficiency is primarily related to diet,

environmental conditions, genetics and other factors

controlled by management. Much of which would be short

lived.

Distribution of Iowa Pork Production Costs

See next slide for more recent cost of production data and trends.



Pork Industry Opportunity Outlook – Threats to Growth

• Likely Threats to Iowa’s Production Cost Advantage

– The cost of transporting feed gives Iowa a competitive advantage over many other states.

– Iowa tends to be the nation’s leader in advancing the efficiency of the swine industry both in feed conversion and litter size.

– Because hog production units are larger on average, and more specialized than in the past, total economic activity may be more

stable or increase for regions that have production units. Other regions that are losing share of production will lose economic activity.

• Other Threats / Uncertainties

– As production units increase, there is the associated concentration of waste produced & emissions released. On the positive side,

waste from modern deep pitted swine operations is a value nutrient source for farming operations. As fertilizer costs have increased

so has interest in acquiring livestock manure.

– Federal environmental standards may have differing regional impacts on hog production.

– State & county environmental and zoning regulations can greatly alter the competitive position of the local pork industry

– Animal health issues

– Animal welfare guidelines

4

Source: The Iowa Pork Industry 2008: Patterns and Economic Importance, ISU,

2008; Iowa Concentrated Animal Feeding Operation Air Quality Study, Feb 2002277 | Context | Iowa AgriScope 2030

Pork Industry Opportunity Outlook – Threats to Growth

• Necessary ingredients to industry survival are effective:

– Marketing – identification of new markets and positioning themselves to produce products for these markets

– Financial management

– Risk management

– Environmentally-sound facilities & management practices (and be good neighbors in order to remain sustainable)

• Changes in the pork industry have been and will continue to be driven by:

– Emerging technology

– Emerging Markets

– Emerging Information

– Skills of producers

4

Source: The Iowa Pork Industry 2008: Patterns and Economic Importance, ISU,

2008; Iowa Concentrated Animal Feeding Operation Air Quality Study, Feb 2002


Pork Industry - References

• The Iowa Pork Industry 2008: Patterns and Economic Importance

http://www2.econ.iastate.edu/faculty/lawrence/Iowa%20Pork%20Industry%202008%20Final.pdf

– USDA Disposition, Production and Income report

– USDA Farms, Land in Farms, and Livestock Operations 2007 Summary

– Positioning Your Pork Operation for the 21st Century, Professor Chris Hurt of Purdue University

– The Food and Agricultural Policy Institute (FAPRI)

– IMPLAN system developed by the US Forest Service

• Iowa Concentrated Animal Feeding Operation Air Quality Study, February 2002

http://www.deq.state.or.us/aq/dairy/docs/appendix/appendix_L.pdf

– Chapter 2: Industry Structure and Trends in Iowa

• Food for Thoughts, Global Food Trends, Science News Online, May 31, 2003

• Livestock and Poultry: World Markets and Trade, USDA-FAS, October 2006

http://www.fas.usda.gov/dlp/circular/2006/2006%20Annual/Livestock&Poultry.pdf

• Encyclopedia of Asian Food. Melbourne: William Heinemann Australia.

• The Modern Art of Chinese Cooking, New York: Hearst Books.

• US Pork Export Statistics - Statistics provided by US government & compiled by US Meat Export Federation

http://www.usmef.org/

• August Pork, Beef Exports Soar to New Heights, US Meat Federation, August 2011 http://www.usmef.org/news-statistics/press-

releases/august-pork-beef-exports-soar-to-new-heights-2

• Livestock and Poultry; World Markets and Trade, USDA-FAS, October 2011

http://www.fas.usda.gov/psdonline/circulars/livestock_poultry.pdf

• Shane Ellis, Iowa State University, Ag Extension Economist

• USDA – FAS279 | Context | Iowa AgriScope 2030

http://www2.econ.iastate.edu/faculty/lawrence/Iowa Pork Industry 2008 Final.pdf

http://www.deq.state.or.us/aq/dairy/docs/appendix/appendix_L.pdf

http://www.fas.usda.gov/dlp/circular/2006/2006 Annual/Livestock&Poultry.pdf

http://www.usmef.org/

http://www.usmef.org/news-statistics/press-releases/august-pork-beef-exports-soar-to-new-heights-2




Beef

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Beef Industry Statistics – World Markets and Trade

• The world’s leading beef exporters are: Brazil,

Australia, United States and India.

• Competition is expected to tighten among key beef

exporters in 2012.

• Beef exports are forecast to rise 5% in 2012 on robust

global demand, particularly by Southeast Asia, the

Middle East and North Africa.

• India accounts for nearly half of world growth in 2012 on

increased supplies and price-competitive shipments to

emerging markets.

• Expansion enables the rising exporter, India, to nudge

the United States to become the world’s third largest

exporter.

1

Source: USDA-Livestock and Poultry: World Markets and Trade, 2011

World’s Leading Beef Exporters



• The most significant change in the cattle and beef export

business in recent years has been a dramatic increase in

U.S. exports of beef. By-products like hides and variety

meats remain important to cattle producers. Dollar-value

exports of cattle products continue to exceed imports by a

substantial margin.

– Beef exports in 1993 decreased somewhat for the first time

in years.

– Exports increased again in 1994 and 1995.

– A further increase was expected in 1996, but decreases in

exports to Japan and Korea, partly because of concerns

about E. coli, later brought decreases in total beef exports

for the year in total.

– Exports during 1998 and 1999 were stronger as Asian

economies began to recover.

– The United States maintains gains achieved since 2003, the

last year before the BSE detection in Washington State, to

reach record level exports.

• Despite a weak dollar, additional U.S. growth is constrained

by lower production.

• 2010 beef exports were $4.08 billion, 2.35 billion pounds

• Top 6 export markets included: Mexico, Canada, Japan,

South Korea, China/Hong Kong, and Taiwan.

1

Source: National Cattlemen’s Beef Association; Statistics provided by US Government &

compiled by US Meat Export Federation

0

2000

4000

6000

8000

10000

12000

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Beef & Veal Variety Meats Tallow Hides Live Cattle Total

U.S. Cattle and Beef Products – Exports (million dollars)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Japan Mexico Canada

South Korea China/Hong Kong Taiwan

Total Top 6

Leading Markets for U.S. Beef - including variety meat

(metric tons)



• Russia, which now includes trade with Belarus, is

forecast to continue its new found position as world’s

leading importer. Slightly lower production will be

partially offset by an increase in imports. The tariff rate

quota (TRQ) volume remains unchanged in 2012 and

again a significant volume will likely be imported over

quota.

1

World’s Leading Beef Importers

0

2000

4000

6000

8000

10000

12000

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Beef & Veal Variety Meats Tallow Hides Live Cattle Total

US Cattle and Beef Products – Imports (million dollars)

Sources: National Cattlemen’s Beef Association;

USDA-Livestock & Poultry: World Trade Markets & Trade, 2011


Beef Industry Statistics – Consumption & Production

• Per capita consumption of beef has been declining

slowly, but steadily since 2006. While per capita

consumption was declining, total beef production

remained above 26.5 billion pounds. However, beef

production is expected to decline by 4-5% in each of the

next two years.

• Per capita consumption of beef has been declining as

beef exports and national population increases have

out- paced any increased beef production.

• Beef production has become more efficient in recent

years, with more beef produced per beef cow than ever

before.

• US beef production is expected to decline in the next

several years, as a declining national beef cow herd

and drought conditions impact the nation’s beef

production capabilities.

1

U.S. Per Capita Beef Consumption

U.S. Commercial Beef Production

Source: USDA284 | Context | Iowa AgriScope 2030

Beef Industry Statistics – Production 1

• Iowa has the 7th largest cattle inventory in the U.S. with

4.2% of the nation’s cattle.

• Iowa had the 13th largest beef cow herd on January 1,

2011.

• Iowa had the 4th largest inventory of cattle on feed January

1, 2011.

• The inventory of US total cattle tends to follow a ten year

cycle between peaks, with the current decline beginning in

2007.

• Iowa’s total cattle inventories have remained fairly steady,

even though national trends have been declining the past

15 years.

– Iowa beef cow herds have declined by 17% since 2007,

and are now at their lowest level since 1952.

– Dairy cow numbers have been generally steady since

2007.

– 1.38 million head of cattle were on feed at the beginning of

the year, the highest volume since 1980.

All Cattle and Calves, US and Iowa Inventory

January 2011

• More than 50% of the total value of U.S. sales of cattle and

calves comes from the top 5 states:

1. Texas

2. Kansas

3. Nebraska

4. Iowa

5. Colorado

Sources: Economic Importance of the Iowa’s Cattle Industry, 2005,

updated by Shane Ellis at Iowa State University, 2011; USDA 2007 Ag Census


Beef Industry Statistics – Production 1

• Iowa’s inventory of beef cows was 840,000 head at the

start of 2011.

• The U.S. beef cow inventory had its last significant peak in

1996 and then declined until 2004 before increasing slightly

in 2005. Since then, the national herd has been in decline.

• At least part of the Iowa decline since 1990 is due to a loss

of pasture acres in the state, as crops and land retirement

programs bid land away from cowherds.

• Significantly higher row crop prices in the past five years

encouraged the conversion of land use from pasture

grazing to crop production. Iowa beef cow numbers have

been declining annually by a rate of more than 4% in the

past four years.

• If profitable conditions continue, U.S beef cow inventories

are expected to increase in 2015.

• The figure to the right shows the inverse relationship

between U.S. total cattle inventory and cow-calf herd

returns.

– Generally, the national cattle herd increases after five to six

years of profitability.

– The increased profits then encourage expansion of the

herd and thus the cycle continues.

Beef cows that have calved, January 1 (1,000 head)

U.S. beef cow inventory and cowherd returns

Source: Economic Importance of the Iowa’s Cattle Industry, 2005,

updated by Shane Ellis at Iowa State University, 2011286 | Context | Iowa AgriScope 2030

• As of the most recent count in 2007, there are

approximately 25,000 farms in Iowa with beef cow herds.

• The number of herds in Iowa has declined since the mid-

1980s, then was stable during the early 2000s.

• Since 2007 there has been a dramatic decline in beef cow

numbers in the state. The majority of this decline comes

from a reduction in the number of small production herds

with fewer than 100 head.

• Beef cow herds in Iowa are relatively small, with an

average size of approximately 40 cows per herd.

• It is important to note that the smaller herds are in rural

Iowa and the part time jobs they produce are important to

rural Iowa.

• From the 2007 Census of Ag.

– 34% of the state’s beef cows are in over 15,000 herds with

less than 50 cows

– 25% of Iowa beef cows are in herds between 50-99

– 36% of Iowa beef cows are in herds between 100-499

– 5% of Iowa beef cows are in herds of over 500 head

1

Beef cow herds and cows per herd in Iowa

Percent of inventory by size of Iowa beef cow herd

Sources:

2007 Census of Agriculture; Economic Importance of the Iowa’s Cattle Industry, 2005, updated by

Shane Ellis at Iowa State University, 2011; Iowa Concentrated Animal Feeding Operation Air Quality

Study. 2002

Beef Industry Statistics – Number & Size of Farms


• Iowa had 1,380,000 head of cattle on feed January 1, 2011.

This figure is 41% greater than in 1990, but 25% more than

2000.

• Iowa’s cattle feeding capacity has increased in the past

decade, especially during 2003-2007. While losses in the

cattle feeding sector during 2008 and 2009 led to a decline

in cattle on feed inventories, Iowa has since returned to

increasing its cattle feeding inventory.

• Cattle feeding returns are cyclical, but profitability has been

brief in the past seven years.

– In 2008 and 2009 a combination of increasing feed costs

and declining demand for finished beef during the recession

produced the longest and most severe period of losses in

the cattle feeding sector on record.

• Even if there are economic losses to the cow-calf or feedlot

enterprise, cattle production still generates value added

economic activity. Inputs to production are still purchased,

labor and services are still used, and cattle are still

transported, sold and processed.

1

All cattle on feed, January (1,000 head)

ISU Estimated Returns to Finishing Yearling Steers

Sources:

Economic Importance of Iowa’s Cattle Industry, 1999, updated by Shane Ellis at Iowa State University,

2011; Iowa Estimated Returns

Beef Industry Statistics – Production


Beef Industry Statistics – Industry Structure

• The beef industry structure is shaped like a funnel, therefore the ability to affect change gets increasingly difficult as the number

of decision makers increase.

Source: Economic Importance of the Iowa’s Cattle Industry, 2005

1

Over 775,000 farms in the U.S. with Beef Cows

28% of the cows are in 600,000 herds with <50 cows with an average inventory of 15 head

264 feedlots with 16,000 head capacity or more marketed 60% of

the fed cattle in 2004

85% of the fed cattle are marketed by 2,176

feedlots that have 1,000 head or more capacity

3 packers process 75% of the steers and heifers in the US


Beef Industry Economic Impact

• The estimated $2.13 billion of gross output from beef

production activity supports an additional $2.93 billion of

economic output for a total of $5.06 billion of direct and

indirect economic activity throughout the Iowa economy.

• While much of the impact is concentrated in the agricultural

sectors, the personal income linkages in the economy

results in major economic effects also being distributed in

the services and trade sectors.

• The estimate of $240 million of direct income to beef

producers is linked to an additional $690 million of income

throughout the Iowa economy for a total impact of $930

million of personal income.

– Again, the service and retailing sectors receive strong

stimulus from the initial effect of income earned in the beef

sector.

• The estimated $350 million of value-added for beef

production is linked to $950 million of additional indirect and

induced value-added, for a total of $1.4 billion of value-

added in the state's economy.

2

Economic importance of Iowa cattle industry, 2004



Beef Industry Economic Impact - Employment

• Assigning job numbers to the livestock producing sector is

a little more difficult.

• There are 25,000 Iowa farms with beef herds. However,

18,000 have herds of less than 50 head, clearly less than

full time employment.

• A more appropriate measure would be to use an estimate

of full time employment, but acknowledge there are

additional farms with part time beef enterprises.

– It is important to note that the smaller herds are in rural

Iowa and the part time jobs they produce are important to

rural Iowa.

• The nearly 12 million hours associated with the $2.13 billion

of cattle marketings imply about 6,000 direct jobs in beef

producing activities involving farm workers as well as farm

proprietors. This number is consistent with aggregate

budget estimates of total number of hours needed to

produce 1.498 million fed cattle per year.

• Since the other non-agricultural sectors give credit for jobs

based on part-time employment, it seems appropriate to

give some credit for livestock enterprises that are a

significant activity on Iowa farms.

2


• We therefore use an estimate of about 10,000 direct jobs

involved in Iowa livestock production.

• These direct jobs at the farm level support an additional

26,500 jobs throughout the rest of the economy, including in

the meat processing sector.

• The distribution of employment impacts is similar to the

pattern for the other indicators in that effects are present in

all parts of the economy. The service sector provides the

largest number of secondary jobs followed by Finance,

Insurance and Real Estate and Retailing.



Beef Industry Economic Impact - Employment

• The higher number of jobs in services combined with the

lower levels of income suggests that many of these

secondary jobs are less than full-time.

• Estimates of the impacts of the Iowa beef industry include

forward linkages into the meatpacking industry.

• By moving past the farm gate, additional economic

activities including transportation, processing, and handling

are captured in the economic model and presented in the

estimates.

• Based on levels of commercial cattle slaughter in Iowa and

on U.S. averages, we estimate about 2500 workers are

employed in cattle processing in the state.

• An estimated $65 million of wage and salary income is paid

to workers in the cattle slaughtering and processing

sectors.

– Since cattle processing and slaughtering facilities tend to

be located near the source of raw materials, this stage of

the beef industry has the additional benefit of providing

needed jobs in rural labor markets.

2


** From an employment standpoint, the numbers employed

may not have changed much since 2004, however

efficiencies have. There is more beef being produced per

labor hour.


updated by Shane Ellis at Iowa State University, 2011


Beef Industry Value Chain Summary

Iowa cattle industry flowchart

3

2010 estimate: 780,000 calves

2010: 2,021,000 head


updated by Shane Ellis at Iowa State University, 2011


Beef Industry Value Chain Summary

• The estimated total value of cash inputs used in Iowa sum to

an estimated $921.7 million or $1.025 billion if a $9.00 per

hour average value is assigned to the 11.5 million total hours

of labor used in cattle production in Iowa.

– These hours are based on an estimate of average hours of

labor used per calf until marketed by existing producers in

Iowa.

• Total fixed costs including depreciation and interest on assets

is $229.342 million.

• The residual value between inputs and marketings can be

described as returns to unpaid labor and management.


– With 1.5 million fed cattle sold annually, 107.5 million bushels

of corn valued at $258 million are used in Iowa.

– 2010 Update: 2.026 million fed cattle sold, 145.4 million

bushels of corn, or corn equivalents, valued at $872 million

were used in Iowa.

– Feed supplements and additives represent another $56.5

million of purchased inputs from suppliers in Iowa.

– The use of this scale of feed supplements helps support

soybean prices and the soybean processing industry, as well

as local elevators and transportation services based in rural

areas.

3

Iowa cattle industry flowchart

• Forward linkages can be traced to the slaughter and

processing level for impact on the state's economy.

• Data from the American Meat Institute indicate that, on

average, the cost of live animals represents 89% of the total

value of the processor's product (AMI).

• The remaining margin is for other inputs including labor and

return on investment.

• The final demand uses of processed cattle products are an

estimated 53.6 million pounds going into foreign markets

and 877 million pounds into domestic markets.

2010 estimate: 780,000 calves

2010: 2,021,000 head


updated by Shane Ellis at Iowa State University, 2011294 | Context | Iowa AgriScope 2030

Beef Industry Opportunity Outlook

• The beef industry is also slowly transforming from a commodity to a production orientation with increased interest in value-based

marketing and retained ownership.

– These trends will place greater value on superior cattle and on information systems that will accurately relate value through the marketing

channel.

– New products are playing an increasingly important role in beef sales.

– These new products will have to meet the requirements for fresh, processed, HRI (Hotel, Restaurant, and Institutions), retail and international

markets which are expected to have greater share of branded or labeled products.

– As a result, the different segments of the marketing channel will communicate more closely with one another. This communication and demand for

information will be accelerated by the implementation of the National Animal Identification System (NAIS).

– Once the infrastructure is in place to support the NAIS, the cost of moving data with cattle will be greatly reduced and become the standard for

doing business.

– The additional data handling and processing associated with these new markets will mean additional value-added jobs in Iowa's agri-industries.

• The beef industry is also quickly evolving to an integrated forage, grain, and beef system approach to production.

– Once the market place identifies the genetic characteristics of cattle to fill a particular market niche, the genetics will determine the needed

nutrition, grazing and feeding program.

– Using this system approach to beef production, Iowa producers will remain competitive in the cattle industry and the global protein market.

– An emerging element in the Iowa production system is feeding of distillers grains from the rapidly growing ethanol industry.

• Distillers grains are an excellent feed for beef cattle and an item that can be costly to dry and ship for the ethanol producer if there is not a

local market. Iowa is well positioned to grow the cattle feeding sector in tandem with the ethanol industry creating a win-win scenario for

corn and cattle producers while creating jobs in rural communities

4

Sources: Growing Iowa’s Cattle Industry, Are Iowa’s Feedlots Competitive,

Iowa Beef Center; Economic Importance of the Iowa’s Cattle Industry,

2005; The environmental impact of U.S. beef production: 1977 compared

with 2007, Journal of Animal Science, July 2011


Beef Industry Opportunity Outlook

• The decline in cow numbers, especially in the southern U.S., opens up big opportunities for Iowa’s cattle industry.

• Existing efficient beef producers will continue to be competitive. Successful beef enterprises in the future will depend on the

manager's ability to develop effective profitable business plans, implement sound plans efficiently, and analyze ongoing

information to determine if the operation is on the chosen path.

• Iowa is competitive compared to some regions and some cattle. However buy and sell price are big determinants of profit. Iowa

is competitive due in part to:

– Lower cost of feed and cost of gain (Cheap feed alone is not enough!)

– Higher quality grade cattle

– Higher yield grade cattle

– However, buy and sell price are big determinants of profit

• Modern beef production (2007) is much more efficient than the equivalent system in 1977.

• Modern beef production (2007) requires considerably fewer resources than the equivalent system in 1977.

– 13% fewer animals in 2007 produced 13% more beef than in 1977

– 20% less feedstuffs

– 14% less water

– 30% less land

– 9% less fossil fuel energy

– 18% decrease in total carbon emissions (methane, nitrous oxide and carbon dioxide)

4

Sources: Growing Iowa’s Cattle Industry, Are Iowa’s Feedlots Competitive, Iowa Beef Center; Economic Importance of the Iowa’s

Cattle Industry, 2005; The environmental impact of U.S. beef production: 1977 compared with 2007, Journal of Animal Science, July

2011; Environmental Sustainability of Beef Production Has Improved Considerably over Last 30 Years, WSU Expert Says,

Washington State University, July 2010


Beef Industry Opportunity Outlook –

Emerging Issues Facing the Industry

• The beef feedlot sector continues to consolidate into fewer and larger operations at the national level and to a lesser extent in

Iowa.

• The cow-calf sector remains quite dispersed as cow herds tend to locate near available forages.

• The beef industry structure is shaped like a funnel, therefore the ability to affect change gets increasingly difficult as the

number of decision makers increase.

• The environmental impact of beef production is another emerging issue that is not independent of the economic impact of the

industry.

– The beef industry is concerned with the significant loss of pastures. The industry acknowledges that there is

environmental value in keeping marginal land in pasture.

– Because of differences in climate and cropping patterns, uniform federal environmental standards may have regional

impact on cattle production.

– In addition, state and county environmental and zoning regulations can greatly alter the competitive position of the local

beef industry.

– Cost benefit analysis to evaluate the trade-offs between restrictions, regulations, or incentives to alter production

practices and the competitiveness of individual farms will be important.

4



Beef Industry - References

• Iowa Concentrated Animal Feeding Operation Air Quality Study, February 2002, Iowa State University and the University of

Iowa Study Group http://www.public-health.uiowa.edu/ehsrc/cafostudy.htm

• Economic Importance of Iowa’s Cattle Industry, Dept of Economics, ISU, 1999

http://www2.econ.iastate.edu/outreach/agriculture/AgImpactStudy/cattle/state.htm

• Economic Importance of Iowa’s Cattle Industry, Dept of Economics, ISU 2005

http://www.docstoc.com/docs/37742929/ECONOMIC-IMPORTANCE-OF-IOWAS-CATTLE-INDUSTRY

• 2007 Census of Agriculture http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf

• USDA Cattle Report

• Iowa Estimated Returns

• National Cattlemen’s Beef Association http://www.beefusa.org/beefindustrystatistics.aspx

• USDA-Livestock & Poultry World Markets and Trade http://www.fas.usda.gov/psdonline/circulars/livestock_poultry.pdf

• US Meat Export Federation (Statistics provided by US Government and Compiled by the USMEF) http://www.usmef.org/news-

statistics/statistics/

• Growing Iowa’s Cattle Industry, Are Iowa’s Feedlots Competitive, Iowa Beef Center

http://www.iowabeefcenter.org/Docs_coproducts/Growing-Iowa_Competitive-Feedlots.pdf

• The environmental impact of U.S. beef production: 1977 compared with 2007, Journal of Animal Science, July 2011

http://jas.fass.org/content/early/2011/07/29/jas.2010-3784.abstract

• Environmental Sustainability of Beef Production Has Improved Considerably over Last 30 Years, WSU Expert Says, Washington

State University, July 2010 http://cahnrsnews.wsu.edu/2010/07/14/environmental-sustainability-of-beef-production-has-

improved-considerably-over-last-30-years-wsu-expert-says/


http://www.public-health.uiowa.edu/ehsrc/cafostudy.htm

http://www2.econ.iastate.edu/outreach/agriculture/AgImpactStudy/cattle/state.htm

http://www.docstoc.com/docs/37742929/ECONOMIC-IMPORTANCE-OF-IOWAS-CATTLE-INDUSTRY

http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf

http://www.beefusa.org/beefindustrystatistics.aspx


http://www.usmef.org/news-statistics/statistics/

http://www.iowabeefcenter.org/Docs_coproducts/Growing-Iowa_Competitive-Feedlots.pdf

http://jas.fass.org/content/early/2011/07/29/jas.2010-3784.abstract

http://cahnrsnews.wsu.edu/2010/07/14/environmental-sustainability-of-beef-production-has-improved-considerably-over-last-30-years-wsu-expert-says/



Dairy

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Dairy Industry Statistics - Consumption

• Dairy product consumption has changed substantially over

the past several decades. These changes have important

implications for all involved in the production, processing,

and marketing of milk and milk-based products.

• There has been a continual downward trend in per capita

sales of total beverage milk.

– Per capita sales of whole milk, flavored whole milk, and

buttermilk have all decreased significantly since 1975.

– Moreover, per capita sales of whole milk and buttermilk

during 2009 were less than 50% of the level recorded in

1975.

– While lower fat fluid products posted substantial gains during

much of this time period, per capita sales have declined in

recent years for all items except lower fat milk.

• Iowa ranks 8th in total dairy products processed.

– 7th in cheese production

– 6th in cottage cheese production

– 6th in production of American cheese

– 4th in ice cream production

1

Source: Marketing Service Bulletin: Per Capita Consumption of Selected Dairy Product, Federal Milk Market Administrator, July 2004, USDA

U.S. per capita sales of fluid dairy products



• The change in fluid milk sales has been subtle in the past

twenty years. Most categories of milk have held steady

sales in term of quantity sold.

• Reduced fat milk replaced a large market share of whole

milk.

1

U.S. total sales of fluid dairy products




• Cheese consumption has exhibited large gains.

• To emphasize this point, the milk equivalent of cheese

consumption has been greater than fluid milk and

cream since the late 1980s.

– Mozzarella has posted the largest gains among hard

cheeses with consumption rising from 2.12 pounds per

person in 1975 to 11.3 pounds during 2010.

• Yogurt and cream products also posted significant per

capita consumption gains during this time period.

1

U.S. per capita consumption of cheese pounds



Dairy Industry Statistics - Consumption 1


US per capita consumption of miscellaneous dairy products US per capita consumption of selected class II products


Dairy Industry Statistics – Number and Size of Farms

• US dairy production has tended to become concentrated in

fewer counties

• 250 counties produce 75% of the US milk supply (2002)

• Fewer than 15 counties (shown in red) account for about

25% of all milk produced in the country and only one of

those counties lies east of the Mississippi river. (2002)

• Past – Traditional family farm herd with less than 100 cows

dominated the Iowa dairy production sector

• Most recent decade – share of production originating on

larger operations has grown rapidly

• 1999 – farms with < 100 cows produced about 60% of all

Iowa milk

• 2001 – farms with < 100 cows produced about 50% of all

Iowa milk

1

The 250 US Counties that product 75% of the milk

Sources: The Economic Importance of the Iowa Diary Industry, ISU, 2003


Dairy Industry Statistics - Production

• The dairy industry is one of the six largest commodities

in Iowa. (2009)

• Iowa has had remarkably stable milk production in the

past decade.

• Annual production has remained in the 3.8 – 4.3 billion

pound range.

• Iowa ranks 12th in total pounds of milk produced - 4.34

Billion: pounds of milk produced (2010)

– 12th in milk cow numbers

– 12th in production per cow

– 9th in fluid milk bottling

– 8th in total dairy products processed

– 7th in number of dairy herds

– 7th in cheese production

– 6th in cottage cheese production

– 6th in production of American cheese

– 4th in ice cream production

1

Total milk production in Iowa

Sources: USDA – NASS; Iowa Dairy Facts, Iowa State Dairy Association; The

Economic Importance of the Iowa Diary Industry, ISU, 2003; Bureau of Economic Analysis


Dairy Industry Statistics – Number, Size & Production 1

• The number of producing dairy cows has been fairly

steady the past 5 years.

– 209,000 milk cows in production (2010)

• Steady increases in production per cow have

permitted a smaller number of cow herds to produce

a constant quantity of milk.

– 1,922 number of dairy farms (2010)

• Iowa ranked 12th in the nation in average milk

production per cow at almost 21,000 pounds of milk

produced per cow (2010)

− This benchmarks quite favorably against virtually

all of the surrounding states – including dairy

states such as MN & WI.

– The steadily increasing production per cow has

occurred as a result of changing technology and

intensity of management in Iowa operations.

Number of dairy cows in Iowa

Average Number of cows per farm in Iowa

Sources: USDA – NASS; Iowa Dairy Facts, Iowa State Dairy Association; The Economic Importance of the Iowa Diary Industry, ISU, 2003;


Dairy Industry Statistics - Production

• Dairy production has historically been an important farm

enterprise in Iowa.

• Iowa ranks 12th in US Production (2002) and has held that

position for the past 5 years.

– 2010 - Iowa still ranks 12th in milk production

• Although heaviest production occurs in the northeastern

and northwestern portions of the state, there is some level

of dairy production activity in 90% of Iowa counties. (2002)

• Iowa produces about 30% of the milk produced in the

Central Order –more than any of the 6 other states. (2002)

• According to 2009 data from the USDA, the rankings have

changed a bit.

1

2002 Milk production ranking top ten states highlighted

Central federal order milk marketings by county, Dec 2001

Sources: USDA – NASS; Iowa Dairy Facts, Iowa State Dairy Association; The Economic Importance of the Iowa Diary Industry, ISU, 2003, USDA

CA 1

WI 2

NY 3

ID 4

PA 5

MN 6

TX 7

MI 8

NM 9

OH 10


Dairy Industry Economic Impact

• The estimated $550 million of gross output from dairy

production activity is linked to approximately $1.45 billion

sales in the state’s dairy processing sectors.

• The total sales from these direct components of dairy

production & processing sectors support additional input

purchases, spending on transportation & other services, as

well as consumer-related purchases worth $1.2 billion of

direct & indirect sales throughout the Iowa economy.

– Caution – value of the dairy is counted twice – at the

farm level and as part of the total value of dairy

products when it is sold from the processor.

• Effects of the dairy industry are distributed throughout the

economy, benefiting rural and urban areas including

services & trade sectors.

• The estimate of $230 million of direct income to dairy

producers is linked to an additional $160 million of earnings

to workers in dairy processing and to $342.4 of additional

income throughout the Iowa economy for a total impact of

$732.5 million of personal income.

2

• The value added measure is a good indicator of net

economic activity as only the net incremental value is

summed at each transaction to avoid double counting. The

estimated $253 million of value added for dairy production

and $335.1 million in dairy processing is linked to $535.9

million of additional indirect & induced value added activity

in the state’s economy for a total value added of $1.124

million. The distribution of these values is among different

sectors in the table above.

Economic importance of the Iowa dairy industry, 2002

Sources: The Economic Importance of the Iowa Diary Industry, ISU, 2003; IMPLAN Model


Dairy Industry Economic Impact – Employment & Earnings

• There are more than 26,000 jobs involved in some aspect

of the dairy industry--including jobs on dairy farms, dairy

processors, and other services that benefit and aid the

dairy industry.

• The 2,390 farms in 2007 and 2,400 direct jobs in the dairy

producing activities involve farm workers as well as farm

proprietors and can be interpreted as FTE positions.

• These 2,400 jobs at the farm level along with the 4,366 at

the processing level generate a chain of economic activity

that supports an additional 12,555 jobs throughout the rest

of the economy.

• Total employment in dairy processing has stayed relatively

constant over the past 20 years, although the composition

of that employment has changed.

– 4,366 workers are employed in dairy processing activities

with the majority of these workers in ice cream production.

(2000)

– In the past (1980), fluid milk processing used to be the

largest category and is now the 3rd largest employer of

dairy processing workers.

2

• An estimated $160 million of wage and salary income is

paid to workers in these sectors. Since dairy processing

facilities tend to be located near the source of the raw

materials, this stage of the dairy industry has the additional

benefit of providing well-paying jobs in rural labor markets.

Employment in Iowa’s dairy processing industries

Earnings in Iowa dairy processing industries

Sources: The Economic Importance of the Iowa Diary Industry, ISU, 2003; IMPLAN Model


Dairy Industry Value Chain Summary 3

Iowa milk production flowchart, 2001

2010 production is near 2001 levels, therefore the quantities will be about the same. However, commodity values have changed and are

probably near double those noted in the flowchart.


Dairy Industry Value Chain Summary

• The cost of production and input usage is calculated for the

Iowa dairy numbers based on average costs of production

in the ISU budgets. Based on statewide numbers on cows

and milk production, totals of feed use, other direct inputs,

annual depreciation on capital investments, labor

requirements and returns to management and capital are

generated.

• The right hand side of the schematic represents purchased

cash inputs used by producers at the farm level. The prices

and values in this section are intended to reflect long-run

conditions and prices in the industry and are consistent

with projections made by The Food and Agricultural Policy

Institute (FAPRI).

• The estimated total value of direct inputs used in Iowa sum

to $242.4 million. Additional costs for depreciation of fixed

assets and facilities total an estimated $52.4 million. Labor

and management expenses add an additional $115.2

million of costs for a total of $410 million of aggregate input

costs used in dairy production in Iowa. The residual value

between inputs and marketings can be described as

returns to unpaid labor and management.

3

Iowa milk production flowchart, 2001


• Annually, an estimated 20.1 million bushels of corn valued at

$44.2 million are used.

• 2011 value of corn or corn equivalent used is closer to $120

million

• Other feeding costs include an estimated 2.9 million tons of

hay and silage representing another $135.1 million of value.

• Forward linkages can be traced to further processing

activities in the form of cheese, butter, ice cream, dried milk

and fluid milk. The upper portion of the schematic illustrates

the flow of milk production into various forms of further

processing.


Dairy Industry Outlook – Risks to Growth

• The Iowa dairy industry is facing numerous policy issues. How these issues are addressed will affect the future growth and

development of Iowa’s dairy industry

– Environmental permitting for production sites (State level regulations will only affect confinement operations that are larger

than 700 cows, but will deal with issues such as runoff, odor, and other factors that create potential conflicts in site selection).

– Federal Milk Market Order pooling/Class I utilization issues

– Federal Farm Program issues

4

Sources: The Economic Importance of the Iowa Diary Industry, ISU, 2003312 | Context | Iowa AgriScope 2030


• Environmental permitting for production sites

– Iowa is expected to have the capacity to effectively utilize the animal waste generated by an expanded dairy production base. CAFO

regulations as they are presently configured would allow added manure application to replace the plant nutrients removed in the grain

exported to other states & countries.

– Will deal with issues such as runoff, odor, other factors that create potential conflicts in site selection.

– State permitting process has been streamlined and in some ways made more flexible under recent legislation.

– Implementation of a point system for evaluating permit applications submitted by producers allows proposed projects to be more

closely tailored to specific circumstances and conditions existing at the site.

– The ability to permit new sites and conduct expansions on existing sites cannot be underestimated as a force that will impact the

future growth & success of the dairy industry in Iowa.

– The number of dairy farms has been declining for decades.

– The average size of an Iowa operation has had to increase to maintain total production.

– The existing producer demographics imply that these trends will accelerate going forward, otherwise Iowa production can be

expected to decline.

– To the degree that permitting becomes a significant barrier to larger operations or expansions, current production levels will be difficult

to maintain.

– The CAFO regulations favor regions where there is less chance that there will be nutrient buildup in the soils when animal waste is

applied over an extended time period.

– Such buildup is much less likely to occur in regions where significant quantities of grain are produced and exported for use outside

the producing area. This is currently the case for much of the grain produced in Iowa.

– Iowa, unlike production areas that import feedstuffs, will be able to apply animal waste to replenish nutrients in the harvested grains

that is exported or shipped to domestic markets outside the state.

– The increased flexibility in the state environmental permitting process provided by the point system should also make selecting and

permitting sites more straightforward.

– This approach should provide applicants with the ability to better adapt, but it still requires that permits be re-evaluated if there are

significant expansions to existing facilities.

4



• Federal Milk Market Order pooling/Class I utilization issues

– New pooling requirements will make it more difficult to pool milk on the Central FMMO without actually diverting milk to

Class I uses. This combined with a rule prohibiting pooling on both a state order and a federal order is expected to raise

Class I utilization %age in the Central FMMO. These changes in the FMMO pooling requirements have not been

implemented long enough to document their impact, but it is estimated that they will increase producer prices by 10-15

cents per cwt.

• Federal Farm Policy Issues

– Current federal farm policy appears to favor states where average herd size is smaller. The average payment per cwt.

under the deficiency payment program would be much higher for herds with fewer than 200 cows. This would tend to

benefit many of the smaller existing herds and smaller scale start-ups or small-scale expansions. While this is favorable for

many current producers it may be of much less benefit for some of the larger operations that are attempting to expand,

operations that have already expanded, and large-scale start-ups. The potential impacts of non-government voluntary herd

buy-out are uncertain at this time. There are provisions for regional caps on the buy-out to gear the production growth since

2000 to the participation rates in different regions. Current milk supply is tight thus even relatively modest reductions in

production in Iowa under the proposed plan could disadvantage Iowa in the longer run.

4


Iowa Dairy Production - References

• USDA – NASS

• USDA

• Iowa State Dairy Association www.iowadairy.org

• The Economic Importance of the Iowa Dairy Industry, Iowa State University, 2003

http://www.econ.iastate.edu/sites/default/files/publications/papers/p7629-2003-06-01.pdf

• Marketing Service Bulletin: Per Capita Consumption of Selected Dairy Products, Federal Milk Mark Administrator, July 2004

– http://www.fmmacentral.com/PDFdata/msb0704.pdf

• Bureau of Economic Analysis


http://www.iowadairy.org/

http://www.econ.iastate.edu/sites/default/files/publications/papers/p7629-2003-06-01.pdf

http://www.fmmacentral.com/PDFdata/msb0704.pdf



Eggs

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Egg Industry Statistics - Consumption

• Per capita annual U.S. egg consumption peaked in

1945 at 403, reached its lowest level in 1991 at 235 and

has increased steadily until 2001, where it has leveled

off at 255-257 eggs per person

– Increasing population and rising per capita consumption

have enabled the industry to expand production 14%

from 1998 to 2006.

• Growth in egg consumption over the past decade

occurred primarily in egg products rather than shell

eggs

• In 1990, approximately 20% of egg production was

consumed as egg products. By 2000, this figure had

grown to 29%, where it has remained.

• On a per capita basis, annual shell egg consumption

declined 6% from 1990 to 2007 while product egg

consumption increased 51%.

• Production for shell egg consumption has increased

18% or about 1% per year between 1990 & 2007.

• Product egg production has increased 89% during that

same period.

1

U.S. per capita egg consumption by processing type

Source: Economic Importance of the Iowa Egg Industry, 2008


How the Industry is Set-Up

• Processing is usually integrated with the production

facility.

• Rapid expansion of the egg industry in Iowa has taken

place primarily in large integrated laying and processing

facilities.

• About 65% of Iowa egg production goes into egg-

breaking facilities for further processing. The additional

processing at the egg-breaking facilities represents

value-added agricultural activity.

• And the remaining portion goes into retail outlets as

shell eggs.

# of Farms & Size of Farms

• Based on aggregate budgeting methods, the full-time

employment equivalent required to produce 13.9 billion

eggs (2007) is about 480 workers.

• This number is less than the 1,934 farms in Iowa that

are listed as producing eggs in 2002.

• The 1997 Census of Ag listed 2,015 farms with layers.

• In both years, a large majority of this total number is

composed of farms with less than 100 layers.

• At the other end, there were 46 farms in Iowa with over

100,000 layers in 2002, up slightly from 41 farms of this

size in 1997.

1


Egg Industry Statistics – Structure & Farm Size


Egg Industry Statistics – Production

• Egg production in the U.S. has slowly increased over the

past 40 years.

• The egg production industry in Iowa dropped off

dramatically in the 1950s and stayed very small until the

1990s.

• Iowa was the largest egg producing state prior to 1958

when farm flocks dominated the industry and the state

became number one again in 2001.

• Since 1990, the egg production industry in Iowa has rapidly

grown to the point that Iowa is now #1 in the U.S. in layer

numbers (~52.7 million layers in Iowa producing 13.9 billion

eggs, per USDA estimates in 2007).

• Iowa also has the fastest growing egg production industry

– Increasing 150% between 1997 and 2006.

– In 2007, Iowa produced more eggs than the second (Ohio)

and third (Pennsylvania) largest states combined and more

than the 30 smallest producing states combined.

• Based on monthly average prices, the total market value of

egg production in Iowa was about $825 million in 2007.

This represents 15.4% of total U.S. production, according

to the USDA.

Annual egg production – U.S. vs. Iowa

1

Sources:

Economic Importance of the Iowa Egg Industry, 2008 &

Iowa Concentrated Animal Feeding Operation Air Quality Study, 2002


Egg Industry Statistics – Production

• Of the 5 states, only Iowa is still growing in egg

production.

• Since 1990, Iowa’s layer inventory increased over 10%

per year and egg production increased 11% per year.

• This expansion caused Iowa’s production share to

increase from slightly more than 2% in 1990 to more

than 15.4% by 2007.

Iowa egg production and share of U.S. production

Market share of the top 5 egg producing states, 1998-2007

1



Egg Industry Economic Impact

• Iowa egg industry is responsible for generating

economic effects beyond farm & processor. The

purchases made and incomes earned in these core

sectors spill over and impact the rest of the regional

and state economy via the economic linkages.

• The market value of the $825 million for these eggs

incorporates the value of the intermediate poultry

production.

• The direct labor inputs are 2,870 jobs at the hatcheries,

production, and processing levels.

• When all direct and secondary effects are considered,

the total impacts include $1.82 billion of sales, $281.3

million of personal income, $475.7 million of

contribution to the GSP and about 7,600 jobs. Based

on average state tax yields per income, the Iowa egg

industry generates $18.3 million of state general tax

revenues annually.

• These numbers reflect a substantial increase in impacts

since 2002 because the level of annual egg production

increased from 9.8 billion to 13.9 billion in 2007.

2

Economic importance of egg industry in Iowa



Egg Industry Economic Impact - Employment

• Rapid expansion of the egg industry in Iowa has taken place primarily in large integrated laying and processing facilities.

• The growth of Iowa egg industry is positive employment news for rural areas of Iowa.

• There are about 1,800 employees at 12 egg processing facilities (per Iowa Workforce Development). Most concentrated in north-

central Iowa, where high levels of corn production are also located. Annual wage & salary incomes for these workers total about

$54 million.

• Significant rural employment also occurs at the 13 hatcheries in Iowa, which employ about 531 workers (Iowa Workforce Dev).

This generates about $16.6 million of wages and salary.

• These numbers reflect an employment growth of about 15% since 2002 for this segment of the Iowa egg industry.

• Total hatchery, production, and processing workers were ~2,870 in 2007.

– Generating over $123 million in direct payroll.

– Multiplier impacts on the Iowa economy are even more impressive

• Total labor income of $281.3 million to nearly 7,600 total jobs and

• Value added of $475.7 million attributable to direct and indirect impacts of the egg industry on the Iowa economy

2



Egg Industry Value Chain Summary

Iowa egg production and processing sector

3




• Because of the close integration between growers and

processors in the Iowa egg industry, the production and

processing component are considered as the core of

the industry.

• The backward linkages consist of suppliers of inputs

including feed grains, supplements, veterinary and

utilities.

• Based on 2007 levels of production, ~ 50 million

bushels of corn and 453,000 tons of soybean meal

were used by the 52.7 million layers in Iowa.

• Total feed costs were ~ $250.3 million based on prices

of $3.12/bushel corn and $209/ton SBM and 2007

prices for other ingredients.

• At current feed prices ($6/bushel corn, $330/ton SBM)

the value of the feed used in egg production is now

closer to $449 million. (2011)

3

Iowa egg production and processing sector

Source: Economic Importance of the Iowa Egg Industry, 2008 &

Ellis, Shane, Iowa State University, Extension Livestock Economist


• Continued sustainability and growth of Iowa’s egg


compared to other regions, especially those closer to

major market centers.

• The primary advantage Iowa producers enjoy over

other egg producing regions is access to lower cost

feed. Feed is the largest component, representing

~59% of production costs.

• Consequently feed prices have a dramatic impact.

Iowa has a feed price advantage due to its extensive

farmland and will likely maintain that advantage for the

foreseeable future.

• Higher oil prices have resulted in additional cost of feed

transportation from the Midwest to corn deficient

regions.

• But feed prices have increased more in corn importing

regions.

3

• The largest non-feed cost items provide the greatest

opportunity for producers in other regions to compensate

for Iowa’s feed cost advantage: Pullet depreciation, fixed

asset depreciation, labor & energy costs combined.

• Production efficiency is primarily related to diet,

environmental conditions, genetics and other factors

controlled by management. Much of which would be short

lived.

Distribution of Iowa egg production costs




Egg Industry Opportunity Outlook –

Economic Impact of 10% Growth

• Based on recent trends, growth of an additional 10% is a

feasible and reasonable goal

• An additional 1.4 billion eggs marketed at $83 million would

directly and indirectly generate additional impacts of $184

million of sales, $28.4 million of incomes, $48 million of

contribution to the GSP and 767 jobs

• Factors accounting for the phenomenal growth of the egg

industry in Iowa in recent years

– Per capita egg consumption increased from 235 in 1991 to

257 by 2001, a level at which it has stabilized Growing

population and per capita egg consumption have supported

a 1.7% annual expansion rate in egg production over those

18 years. During this same period, Iowa egg production

has increased almost six fold.

– Iowa has a competitive advantage due to low feed costs.

Feed costs represent over 60% of costs to produce a

dozen eggs and most competing states face higher feed

costs than Iowa.

– Although Iowa does market shell eggs in spite of

transportation cost disadvantage in shipping shell eggs to

major metro centers on the east and west coasts, Iowa has

capitalized on the rapidly growing market for breaker or

“processed” eggs, which incur lower transportation costs

4

Economic impact of a 10% growth in Iowa’s Egg Industry

• Trends that have encouraged investment in Iowa egg

production

– Capture its significant feed cost advantage

– Increased proportion of processed eggs

– Improved transportation

– Modern facilities



• Iowa egg prices are consistently below the national

average (recently fluctuating between 29 and 60 cents

per dozen and displaying a slight upward trend).

• The spread between the Iowa price and the national

average price ranged from 6 to 9 cents per dozen and

has average 7.7 cents per dozen since 2000.

• Industry was relatively unprofitable in 2004-2006, but

prices have been stronger in 2007 and at profitable

levels in spite of higher feed costs.

4


Egg Industry Opportunity Outlook – Egg Prices


Egg Industry Opportunity Outlook – Threats to Growth

• Threats to Iowa’s production cost advantage would likely be:

– Increased transportation costs (to major population centers is a growing hindrance to competing in those markets). This is

the primary competitive disadvantage.

– Technological advances that improve feed efficiency. Any advantages created by such changes would likely be short lived,

as Iowa producers would be able to adopt these changes as well.

– Industry shifts that reduce pullet costs. Any advantages created by such changes would likely be short lived, as Iowa

producers would be able to adopt these changes as well.

• Other factors that create uncertainties:

– Animal health issues

– Animal welfare guidelines

– Flock certification processes

4



Egg Industry - References

• Economic Importance of the Iowa Egg Industry, January 2008, Dept of Economics, ISU

http://www.econ.iastate.edu/sites/default/files/publications/papers/paper_12879.pdf

• Iowa Concentrated Animal Feeding Operation Air Quality Study, February 2002, Iowa State University and the University of Iowa

Study Group http://www.public-health.uiowa.edu/ehsrc/cafostudy.htm


http://www.econ.iastate.edu/sites/default/files/publications/papers/paper_12879.pdf




Turkeys

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

Turkey Industry Statistics – World Markets and Trade

• The U.S. is the world’s largest turkey producer and

exporter, contributing 55% of the world’s total

production and 25% of the world’s total turkey exports.

(2009)

– In 2010, the U.S. contributed 49.5% of the world’s

total production.

• U.S. turkey exports account for 9% of its total annual

production. (2009)

• In 2009, U.S. turkey exports were $395 million, an

18% decrease from 2008 and a 99% increase from a

decade ago.

• Mexico is the largest export market for U.S. turkey, with

a 50% market-share, followed by China and Russia,

with 16% and 3% market-shares respectively.

1

US Turkey Exports (Million $)

Largest Markets for US Turkey (2009)

Source: Agricultural Marketing Services Division, Minnesota

Department of Agriculture, January 2010 ; USDA


Turkey Industry Statistics - Consumption

• During the last three decades, the turkey industry has

come from a single-product, holiday-oriented business

into a fully integrated industry with a diversified product

line that competes with other protein products on a

year-round basis.

• Turkey consumption has increased 102% since 1970,

due to consumers’ recognition of turkey’s good taste

and nutritional value.

• In 2010, US consumption of turkey was 16.4 pounds

per person.

• More and more Americans are realizing that turkey is

not just for holidays. Although 50% of all turkey

consumed in 1970 was during the holidays, today that

number is around 31% as more people enjoy delicious

turkey year-round.

• In 2010, turkey was the #4 protein of choice for

American consumers. Consumption of turkeys for 2010

was approximately 5 billion pounds.

1

Per capita turkey consumption, US

Per capita consumption of turkey

in percentage of consumption *

Source: Eatturkey.com


Turkey Industry Statistics – Structure

• Nearly all turkeys are either owned by the processor or contracted for delivery to the processor by independent producers. The

processor may raise the birds in its own facility or under a production contract in facilities owned by others. Independent

producers sign a marketing contract before the poults are placed to assure a market for the finished birds. There are two

significant benefits to this approach:

– The producer has a supplier for the birds.

– The producer understands how the price will be established at delivery.

• Short-term marketing contracts with processors, which typically cover the delivery of one or two flocks, are primarily for producers

whose facilities are paid for and who have little or no out-of-pocket overhead expenses.

• To encourage investment in facilities, processors may offer longer-term contracts that provide the producer and the producer’s

lender with some assurance that the investment will cash flow at least until it is paid off.

• The typical Iowa independent turkey producer owns the buildings, equipment and provides the labor, feed, and operating inputs

to grow the turkeys to processing weight. The producer buys the poults and schedules them to match a delivery date at the

processing plant.

• The price is determined in the contract, based on a pricing report/service and also many incorporate the cost of feeding the birds.

• Growers with production contracts do not face price risk and are paid a relatively predictable ROI. Independent producers expect

a higher ROI.

1

Source: Iowa’s Turkey Industry – An Economic Review, 2008


Turkey Industry Statistics - Production

• The US is the largest producer of turkeys in the world,

contributing 49.5% of worldwide production (2010).

• The number of turkeys raised in the US during 2011 is 248

million, up 2% from the number raised in 2010.

• US turkey industry is geographically concentrated in six

states producing nearly 67% of the total national output

(2011).

• 10 states account for approximately 80% of total

production.

• Market share among the Top 3 states over the past year

has:

– Fallen in Minnesota by 1%

– Maintained in North Carolina

– Grown in Arkansas by 7%

1

0

10,000

20,000

30,000

40,000

50,000

MN NC AR MO VA IN CA SC IA

2010 2011

Annual turkey production:

Selected states 2010, 2011

Sources: Iowa’s Turkey Industry – An Economic Review, 2008; USDA


Turkey Industry Statistics - Production

• Iowa’s share of total US production declined between the

mid-1970s and late 1990s, but has been steadily rising

since 1999.

– In fact, it grew 11% in 2011 compared with the year prior.

– Production is expected to grow another 3% in 2012 to over

11 million birds.

• Though still trailing Minnesota, Iowa has gained relative to

other leading states.

• Iowa’s neighboring states of Minnesota and Missouri have

similar input prices but produce more turkeys than Iowa

and both also produce more turkeys than they process.

1

Iowa turkey production &

Market share of total US production

Sources: Iowa’s Turkey Industry – An Economic Review, 2008; USDA;

Iowa Turkey Federation

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

-

2

4

6

8

10

12

2007 2008 2009 2010 2011

Mill

ion

s

Annual Production Percent of US Production

Iowa turkey production &

Market share of total US production


Turkey Industry Economic Impact

• The value of the 14.1 million turkeys processed and the

8.54 million produced in Iowa serve as the direct effects

that stimulate the successive rounds of economic

activity in this model.

• When all direct and secondary effects are considered,

the total impacts include:

– $810.7 million of sales

– $158.7 million of personal income

– $253.3 million of contribution to the gross state product

– More than 4,200 jobs

• Based on average state tax yields per income, the Iowa

turkey industry generates $13.7 million of state general

tax revenues annually.

2

Economic importance of turkey industry in Iowa



Turkey Industry Value Chain Summary 3

Iowa turkey production and processing sector, 2007



Turkey Industry Value Chain Summary - Employment

• The presence of the Iowa turkey industry is an

important agricultural value-added activity providing

income and employment opportunities for rural areas in

Iowa.

• Most of Iowa’s turkey production is done on modern

farms that use highly automated facilities for efficient

labor utilization.

• Based on the average labor requirements indicated by

the operating budgets, the 8.54 million turkeys

produced in Iowa require 207 FTE employees.

– At current average wages in this sector, the aggregate

annual wage for turkey production bill totals to about

$5.6 million.

• Secondary data from 2006 indicated that about 1,750

employees worked at the four processing facilities in

Iowa.

– Wages and salaries paid at these facilities totaled about

$50 million annually.

– The combined economic effect of these two

components of the turkey industry totals 1,960 workers

and $55.6 million of wages and salaries for the

processing and production levels.

3

Iowa turkey production and processing sector



Turkey Industry Value Chain Summary

• At the processing level, records indicate considerable

number of birds are imported into Iowa for processing.

• Total processing numbers for 2007 indicated that about

14.1 million turkeys would be processed in Iowa, which

meant 5.5 million birds were brought in from

surrounding states.

• Because of the close integration between growers and

processors, the production and processing component

are considered to be the core of the industry.

• The backward linkages consist of suppliers of inputs

including feed grains, supplements, veterinary, and

utilities.

• Based on the 2007 levels of production, approximately

9.7 million bushels of corn and 108,000 tons of soybean

meal were used by the 8.54 million turkeys produced in

Iowa.

• Total feed costs were estimated to be $88.9 million

based on $3.12/bushel corn and $209/ton SBM prices

and 2007 prices for other ingredients.

• Costs of other inputs including labor, depreciation,

transportation, and miscellaneous expenses totaled

$52.8 million for the Iowa turkey industry.

3

Iowa turkey production and processing sector



Turkey Industry Value Chain Summary

• Iowa produces primarily Tom Turkeys-41 pounds over

20 weeks.

• Feed cost is the single largest expense, over 60% of

the total cost depending on feed prices

• The bird receives several different diets during the

production cycle matched to its nutritional requirements.

• Diet is predominantly corn (56%) and soybean meal

(23%) with other ingredients to supply the remainder of

its nutritional requirements.

• The estimated cost of producing a 41-pound tom in

Iowa is $16.60 per bird or $.4048 per pound of live

weight.

• Operation typically turns 2.4 - 4 flocks per farm per

year.

3

Representative feed ration for life of tom

Estimated cost of producing 41-pound tom turkeys in Iowa

Distribution of Iowa turkey cost of production



Turkey Industry Opportunity Outlook-

Economic Impact of 5.6 Million Additional Turkeys

• The current turkey processing capacity in Iowa exceeds the

level of in-state turkey production, therefore birds are

brought in from surrounding states for processing at Iowa

facilities.

• Because of Iowa’s processing capacity, feed price

advantage, and ability to utilize manure nutrients effectively,

there is potential to grow turkey production in the state.

• Increasing in-state production by 5.6 million birds to more

closely match processing capacity could increase economic

activity by $120 million and 380 full time jobs.

• The current turkey processing capacity in Iowa exceeds the

level of in-state turkey production as indicated by the 5.56

million birds brought in from surrounding states for

processing at Iowa facilities.

• This need to import birds from surrounding states suggests

a plausible development scenario.

• The estimated economic impact of 5.56 million additional

turkeys would be valued at $82 million.

• This new economic activity is focused at the producer level

and does not generate any additional processing-level jobs.

• At the farm level, they anticipate an additional 134 FTE jobs

with about $4.0 million of wages to raise Iowa turkey

production to 14.1 million birds.

4

Economic importance of 5.6 million additional turkeys in Iowa

• Total combined direct and secondary impacts include:

– $119 million of sales

– $14.5 million of income

– 381 total jobs



Turkey Industry Opportunity Outlook

• Now that the market is maturing, there seems to be a trend away from maintaining production facilities in high-cost states such

as California and N. Carolina, and a trend toward more cost-effective regions, such as the Midwest.

– Minnesota does have slightly less expensive feed costs than Iowa.

– Minnesota and Iowa have substantially lower feed costs than N. Carolina or Arkansas.

• This suggests that feed cost differences are becoming a more significant factor.

• It is possible that as cost pressures increase, production will locate where feed costs are lowest, which will give Iowa an

advantage.

• However, the industry will move very slowly!

• The absence of any major new markets will slow construction of new facilities and older facilities will remain in production as

long as prices cover variable costs.

• Individual states may see some growth, but it will come at the expense of other states.

• Increased attention must be paid to reducing costs and matching production and processing capacity.

• The industry may continue to consolidate.

• Higher cost of transporting grain to corn deficient regions and increased value of turkey litter as fertilizer tend to favor the Corn

Belt, if additional growth is justified.

• However, without any major new markets, the industry will be slow to relocate.

• With an industry as finely balanced between profits and losses, any new production without new markets could create an

oversupply and cause the industry to return to a loss situation.

4




• Future growth for this industry depends on its ability to

meet two significant challenges:

– Increase domestic consumption of turkey

– Open new export markets

• Per capita consumption of animal protein in the US has

grown.

• Cost of producing turkey is higher than the cost of

producing chicken, but less than beef and pork.

• It will take successful new turkey products to capture

shares from these markets.

• The US exports approximately 10.64% of its total turkey

production (2010). US turkey exports have had an average

annual growth rate of 8.6% in volume and 9.1% in value in

1991-2010. Export markets are dominated by Mexico,

where demand has grown substantially since 1995 and

now represents 55-60% of US exports. Continued growth

in Mexico will depend on the strength of its economy.

• These are highly price sensitive markets that often absorb

by-products such as thighs, drumsticks, and mechanically

separated meat.

• These export markets will exist as long as inexpensive by-

products are available.

4

• However, these low-value export markets are unlikely to

create the financial incentives required for further growth in

turkey production.

• The US turkey industry has entered a mature phase with

possible overabundance of buildings & processing capacity.

• Unless demand from a new product line exceeds

production, prices will continue to hover at the break-even

point.

• High cost producers exit during times of negative returns

and lower cost producers prevail and expand during

upturns in the market.

US Turkey exports by country

Sources: Iowa’s Turkey Industry – An Economic Review, 2008;

2011 Outlook USPEEC; An Overview of U.S. Poultry Exports



• Turkey production has continued to increase in Iowa. In fact, according to 2012 estimates, the state estimates production to

increase by 500,000 more birds to 11 million turkeys, an increase of 5%.

• Sara Lee Foods continues to add more farmers. Farmers are currently turning ground.

• The turkey industry is offering more and innovative turkey products to meet consumer needs. The turkey industry hopes to

continue to be priced favorable in the increasing cost for protein.

• Environmentally, the turkey industry has an annual on-farm environmental audit of all farms conducted by a third party. Many

farmers are adding tree and vegetative plantings.

4



Turkey Industry Opportunity Outlook – Threats to Growth

• Increasing turkey production will require additional production facilities.

– These facilities are a significant capital investment and require financing and a stable market environment over the life of the facility.

Regardless of the production site developed, the cost of facilities for modern turkey production is a multi-million dollar investment.

– Farmers investing in these facilities may enter a production contract with a processor.

– Farmers that belong to the Iowa-based processing cooperative may have to purchase additional processing shares in addition to the

production facilities.

– The high capital requirement is often a barrier to entry for young farmers and is a concern for the continued success and growth of the

industry.

– Innovative business models or loan programs that lower the capital barrier are needed to attract new producers and will help retain

the value of existing sites if there is more opportunity for young farmers to buy into the industry.

• Another macro concern is demand for turkey products from U.S. and export customers.

– Per capita turkey consumption that increased dramatically in the 1990s has drifted gradually lower in recent years.

– Turkey also faces significant competition from chicken and pork production, both of which continue to set new records for

supply.

– Turkey products must continue to address consumer expectation for a safe, wholesome, affordable mealtime alternative.

– Industry innovation in new product development and efficient production and processing systems will be necessary to

assure the long-term success of the industry.

4



Turkey Industry Opportunity Outlook – Threats to Growth

• Environmental management and regulations are ongoing issues of all livestock and poultry producers.

– The increasing oil and natural gas prices have led to a doubling in fertilizer prices between 2002 and 2007.

– As a result the nutrient value of turkey manure as a commercial fertilizer substitute has also doubled.

– At 2007 commercial fertilizer prices, turkey litter had over $30/ton of crop nutrients when applied following a nutrient

management plan in a corn-soybean rotation.

– It is high in organic matter and nitrogen, phosphorous, and potassium.

– The challenge is to have cost effective methods to handle, store, transport, and apply turkey litter in a manner that is

economically efficient and environmentally sound.

– While soil conditions and crop needs differ, a nutrient plan that applies litter every third or fourth year can be an effective

management strategy to protect water resources and capture the greatest nutrient value.

– Additional research, education, and demonstrations are needed to assure crop farmers of the full benefit of turkey litter as a

soil amendment and fertilizer.

– Likewise, additional work is needed on effective equipment, timing, and quality control of litter application to capture the

greatest value.

– Work is also needed to quantify and minimize the risk to water quality of handling and application methods. Practical

solutions are needed that optimize litter value while assuring the public that water resources are protected.

4



Turkey Industry - References

• Iowa Concentrated Animal Feeding Operation Air Quality Study, February 2002, Iowa State University and the University of Iowa

Study Group http://www.public-health.uiowa.edu/ehsrc/cafostudy.htm

• Iowa’s Turkey Industry – An Economic Review, January 2008

– http://www2.econ.iastate.edu/research/webpapers/paper_12880.pdf

• Feeding People, Iowa’s Turkey Industry

• An Overview of U.S. Poultry Exports

• USDA

• Agricultural Marketing Services Division, Minnesota Department of Agriculture, January 2010

http://www.mda.state.mn.us/food/business/~/media/Files/food/business/economics/exports-turkey.ashx

• Turkey Statistics

– www.eatturkey.com



http://www2.econ.iastate.edu/research/webpapers/paper_12880.pdf

http://www.mda.state.mn.us/food/business/~/media/Files/food/business/economics/exports-turkey.ashx

http://www.eatturkey.com/



Biofuels

Economic Importance

Value Chain Summary

OpportunityOutlook

IndustryStatistics

1Biofuels Industry Statistics – World Production of Biofuels

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Bio

fuels

Pro

du

cti

on

(in

millio

n g

allo

ns)

U.S. Brazil Europe & Eurasia Other Americas Asia Pacific

Global Biofuels Production by Country/Region

Source: BP, 2011 Statistical Review of World Energy, 2011

• Total global production of biofuels (ethanol and biodiesel)

reached just over 29 billion gallons in 2010 according to data

compiled by BP from F.O. Lichts and the U.S. Energy Information

Administration. The U.S. produced 46.6% of global biofuels

production followed by Brazil at 27.8% of global production. The

European Union and Russia combined produced 15% of global

production.

• The U.S. overtook Brazil as the leader in biofuels production in

2006 mostly on the growth in ethanol production. Brazil

production growth plateaued in 2006 as sugar prices jumped and

sugar refiners reallocated production towards table sugar instead

of ethanol. This year the Brazilian government reduced the

mandated blend rate of ethanol with gasoline from 25% to 20%

in recognition of the changes in the sugar market. Earlier this

year Brazilian fuel blenders had been importing U.S. ethanol to

meet the 25% government blending requirement.

• Growth in the production of biofuels in Europe flattened out after

several countries (e.g. Germany) removed subsidies for biofuels

and the EU passed a directive that set strict requirements for the

lifecycle GHG emissions from biofuels. U.S. soy-based biodiesel

exports to the EU dropped precipitously after the EU determined

that U.S. biodiesel was being dumped at below market prices in

the EU and countervailing duties were imposed.

• Ethanol accounts for over 85% of global biofuels production and

biodiesel accounts for the rest.


1Biofuels Industry Statistics – Growth in U.S. Biofuels Production

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Pro

du

cti

on

(m

illio

n g

allo

ns)

Production

Consumption

Ethanol Biodiesel

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007 2008 2009

Pro

du

cti

on

(m

illi

on

ga

llo

ns

)

Production

Consumption

Source: U.S. Energy Information Administration, Annual Energy Review, 2009 Source: U.S. Energy Information Administration, Annual Energy Review, 2009

• The U.S. ethanol industry grew by over five-fold from 2001 to 2009 or

25.3% per year. Starting in 2002, consumption has been slightly

greater than production, making the U.S. a net importer of ethanol.

Imports reached a high point in 2007 when the country imported over

5% of its ethanol needs. Most of the imported ethanol came from

Brazil via the Caribbean where hydrous ethanol was dehydrated.

• Production continued to grow in 2008, 2009 and 2010 (not shown)

despite the financial crisis of late 2007.

• The U.S. biodiesel industry grew by over fifty-fold from 2001 to 2009

or 66.5% per year. Starting in 2007, production exceeded

consumption by a substantial amount In 2008, more U.S. biodiesel

production was exported than consumed in the U.S. That situation

was short-lived when the European Commission judged U.S.

biodiesel was being “dumped” and countervailing duties were

imposed..

• Production peaked in 2008 and began to recover in 2011 as a result

of the minimum blending requirements set forth in RFS2 and the

increasing value of RIN’s for biodiesel. Total 2011 production is

expected to exceed the peak amount produced in 2008.


Mandated U.S. Renewable Fuels Use per RFS2

Source: H.R. 6, Energy Independence & Security Act of 2007

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Bio

fuels

Vo

lum

e (

billio

n g

allo

ns)

Conventional Biofuels Cellulosic Ethanol Biodiesel Other Advanced Biofuels

1

• The Energy Independence & Security Act of 2007 (EISA) essentially

defines the size and make-up of the U.S. renewable fuels market.

The act was passed just after spot oil prices exceeded $80 per

barrel for the first time and surged to $147 per barrel seven months

later.

• EISA mandates minimum biofuels use from 2008 to 2022. The act

specifies the use (but not necessarily production) of four types of

fuels: conventional (corn-based) ethanol, biomass-based biodiesel,

cellulosic ethanol and advanced biofuels. Advanced biofuels consist

of most any biobased alternative fuel that provides at least a 50%

reduction in GHG emissions compared to the comparable,

petroleum-based fuel and are not produced from corn or cellulose.

• The RFS2 provisions with EISA are effectively designed to substitute

20% of the country’s gasoline usage with renewable fuels. Corn-

based ethanol provides 10% while advanced biofuels (of all types)

provide the other 10%. Use of corn-based ethanol is “capped” at 15

billion gallons by 2015 by limiting the amount eligible for tradable

renewable identification numbers (RIN’s). The value of a corn-based

ethanol RIN is forecasted to be $0.02 per gallon for the 10/11

marketing year, rising to $0.63 per gallon by 16/17 according to

FAPRI.

• Use of biomass-based biodiesel is mandated to reach 1 billion

gallons by 2012.

• The U.S. has failed to meet the advanced fuels and cellulosic

ethanol targets to date and is unlikely to meet them for the remainder

of the period covered by EISA (to 2022).

Biofuels Industry Statistics – EISA and the Renewable Fuels

Standard


Biofuels Industry Statistics – Biofuels Plants

Iowa Ethanol Plants Iowa Biodiesel Plants

1

Source: Iowa Renewable Fuels Association, located at www.iowalifechanging .com Source: Iowa Renewable Fuels Association, located at www.iowalifechanging .com

• Iowa has 41 ethanol plants which are all in operation. There is a

single cellulosic ethanol project under development but no other

active projects to expand output at the existing plants.

• The majority of Iowa’s ethanol plants are located in the north-

central and north-western part of the state, away from the large

wet mills in Cedar Rapids (ADM) and Eddyville (Cargill) which

were developed prior to the surge in ethanol plant construction

ten years ago.

• Iowa leads the nation with the highest number of ethanol plants

(41) and total installed capacity (3.7 billion gallons).

• According to data from the Iowa Renewable Fuels Association

there are a dozen biodiesel plants in Iowa (some other sources

list 13 to 15). Ten facilities with an installed capacity of 226

million gallons are in operation. Two facilities with a combined

capacity of 95 million gallons are being retrofitted/expanded.

The actual output from the operating plants is unknown.

• According to data from the Iowa Department of Economic

Development, Iowa ranked fourth in the nation in biodiesel

production in 2010.


http://www.iowalifechanging/

http://www.iowalifechanging/

Biofuels Industry Statistics – Utilization of Feedstocks

Corn for Ethanol Soybean Oil for Biodiesel

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17

Co

rn U

iliz

ati

on

(in

millio

n b

ush

els

)

Ethanol Feed & Residual Food & Other Export

0

5,000

10,000

15,000

20,000

25,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17

So

yb

ean

Oil U

tilizati

on

(in

millio

n lb

s.)

Food & Other Biodiesel Exports

1

Source: FAPRI, August 2011 Baseline Update for U.S. Agricultural Markets Source: FAPRI, U.S. Baseline Briefing Book Projections for agricultural and biofuels markets

• Utilization of corn to produce ethanol rises from 37.9% of total

use to 40.2% of total use by the 16/17 marketing year.

• Use of corn to make ethanol exceeds use of corn for feed and

residual for the first time in 10/11. By the 16/17 marketing year

corn devoted to ethanol production will exceed the amount for

feed and residual use by 12.5%.

• Corn for exports are forecasted by FAPRI to decline in 10/11 by

9% from the previous year and doesn’t reach the prior high

through the forecast period. Corn for food and other grows

gradually.

• Utilization of SBO to produce biodiesel jumps from 14.8% of total

use in the 10/11 marketing year to 17.4% in the following year.

Thereafter it declines to 15.0% of total use by 16/17.

• Soybean oil for food and other application remains fairly constant

at ~71% of total soybean oil use.

• Soybean oil exports are forecast to decline by 9.2% from the

10/11 marketing year to the 11/12 marketing year. They don’t

exceed the amount for 10/11 until the 15/16 marketing year.


Biofuels Industry Economic Impact


Purchases

(million $’s)

GDP

(million $’s)

Household

Earnings

(million $’s)

Employment

(Jobs)

State Tax

Revenues

(million $’s)

Operations

Ethanol 4,999.6 10,473.6 1,887.8 59,010 476.0

Biodiesel 224.3 471.2 103.0 2,911 22.3

Subtotal 5,224.0 10,944.8 1,990.8 61,921 498.3

New

Construction

Ethanol 520.7 547.4 295.5 8,260 34.1

Biodiesel 0.0 0.0 0.0 0 0.0

Subtotal 520.7 547.4 295.5 8,260 34.1

Total 5744.7 11,492.2 2,286.3 70,181 532.4


• Biofuels production is part of the manufacturing sector that adds

value to agricultural commodities produced in Iowa and makes a

significant contribution to the Iowa economy.

• Iowa produced 3.2 billion gallons of ethanol from 39 operating

plants and 85 million gallons of biodiesel from 9 operating plants

in 2009.

• In 2009 biofuels production contributed $11.5 billion to the Iowa

economy or 8% of total state GDP. Half of industry GDP was

generated through purchases and the other half through value-

added operations. Approximately 95% of the industry’s

contribution to state GDP came from operations and the rest

from new construction.

• It generated $2.3 billion in household earnings, 70,181 full and

part time jobs and state tax revenues of $532.2 million.

• The industry also consumed $5.75 billion of raw materials, other

inputs, goods and services. Just over half of purchases were for

feedstocks (grains, vegetable oil and animal fats).

• The Iowa ethanol industry consumed 1.14 billion bushels of corn

(46% of the state’s production) providing $2.9 billion in revenues

to Iowa farmers. The Iowa biodiesel industry consumed 353

million pounds of soybean oil, 218 million pounds of other fats

and oils and 71 million pounds of corn oil. The total value of

these feedstocks was $194.5 million.

• Half of Iowa’s ethanol plants, representing a third of the state’s

production capacity are locally owned.

• DDGS, a co-product generated in the production of ethanol has

become an important input to the animal feed industry globally.

2


Biofuels Industry Economic Impact - Employment 2

Employment Impact of Iowa biofuels industry, 2009

Industry

Ethanol

Industry Jobs

Biodiesel

Industry Jobs

Total Biofuels

Industry Jobs

Construction 8,260 0 8,260

Operations

Feedstocks 35,029 2,251 37,280

Process Chemicals 2,362 83 2,445

Denaturant 514 n.a. 514

Utilities 3,058 42 3,100

Maintenance & Repair 1,583 100 1,683

Administration 1,130 53 1,183

Labor 808 58 866

Wholesale Trade 10,186 178 10,364

Transportation 4,340 147 4,487

Operations Subtotal 59,010 2,911 61,921

Total 67,269 2,911 70,181


• The biofuels industry supports 70,181 full and part time jobs in Iowa

with the ethanol supporting about 96% of the total and the biodiesel

industry providing the remaining 4%. There were 61,921 jobs

associated with ongoing operations and another 8,260 involved in the

construction of new facilities. Note that construction of new facilities

has declined since 2009 but a number of jobs in operations have been

added as the plants previously under construction are now in

operation.

• The industry supports 37,280 jobs in agriculture and another 2,959

jobs to produce other materials (enzymes, process chemicals,

denaturant) used in the production of biofuels.

• Employment in the utilities industry is also supported by the biofuels

industry. A total of 3,100 jobs in the natural gas, electric utility, water

and wastewater industries are required to support biofuels production.

• A total of 1,683 service-type jobs for maintenance and repair are

associated with the biofuels.

• Direct jobs associated with the Iowa biofuels industry number

approximately 2,049 with 58% in administrative positions and 42% in

labor.

• Wholesales trade accounted for about 15% of the 70,181 jobs

supported by the industry while transportation accounted for 6.4%.


Biofuels Industry Value Chain Summary – The major components of the value

chain are raw materials production, conversion, transportation and enduse.3

Source: National Bioenergy Center, National Renewable Energy Laboratory;

Example: Ethanol Industry


Biofuels Industry Value Chain Summary – Operations (2009) 3

Iowa Biofuels Processing Sector

Gasoline

MarketDistillate

MarketAnimal Feed

Chemicals

Market

Ethanol:

3.2 billion gals.

Biodiesel:

85 million gals.

$259 million

(biodiesel)

$2.3 million

(glycerin)

$5.13 billion

(ethanol)

$820 million

(DDGS)

Feedstocks Other Inputs UtilitiesAdministration

& LaborCapital

$3.0 billion $443 million $495 million $135 million $4.5- 5.0 billion

Wholesales Trade

(Inputs & Outputs)

$ 758 million

Transportation

(Inputs & Outputs)

$ 311 million

Source: Data from John H. Urbanchuk, LEGC LLC, Contribution of the Biofuels Industry to the Economy of Iowa


Biofuels Industry Value Chain Summary – Production Costs 3

Ethanol Biodiesel

• The cost structure of the ethanol industry has changed over time

with corn becoming a significantly higher % of total costs. In

contrast, natural gas prices, once a major cost concern, have

moderated and are now much lower % of total costs. Other

utility costs are rising but the industry has made a number of

process improvements to reduce water and electricity use.

• Labor and administrative costs have dropped as a % of total

costs as average plant sizes have increased.

• Transportation costs are rising as ethanol plants are having to

ship further distances to gain access new markets.

• The biodiesel industry continues to struggle with an

uncompetitive cost structure due to feedstock costs. The plants

that are operating are using a combination of SBO, animal fats

and corn oil extracted from DDGS.

• Biodiesel breakeven prices run far above market prices and few

biodiesel operators would survive without the blenders’ credit.

Cost of Biodiesel Production($/gallon) (2007 to present)

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

Apr-07

Jun-0

7

Aug-07

Oct-0

7

Dec-0

7

Feb-0

8

Apr-08

Jun-0

8

Aug-08

Oct-0

8

Dec-0

8

Feb-0

9

Apr-09

Jun-0

9

Aug-09

Oct-0

9

Dec-0

9

Feb-1

0

Apr-10

Jun-1

0

Aug-10

Oct-1

0

Dec-1

0

Feb-1

1

Apr-11

Jun-1

1

Aug-11

$ p

er

gall

on

Soybean Oil Natural Gas Methanol Other Variable Fixed Costs

Sources: Iowa Soybean Processors Report, EIA,

Methanex

Cost of Ethanol Production

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

$ p

er

ga

llo

n

Corn Natural Gas Other Variable Fixed Costs

Source: USDA AMS Iowa Ethanol Report, EIA


Biofuels Industry Value Chain Summary – Industry Profitability 3

Ethanol Production Grind Margin and

Return Over Variable and Total Cost

$(0.50)

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

$ p

er

ga

llo

n

Return Over Total Cost Return Over Variable Cost Return Over Grind Margin

Return to

Introduction

Source: USDA AMS Iowa Ethanol Report, EIA

Biodiesel Revenue, Costs, and Profit($ per gallon) (2007 - Present)

$(1.00)

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

Apr-07

Jun-0

7

Aug-07

Oct-0

7

Dec-07

Feb-0

8

Apr-08

Jun-0

8

Aug-08

Oct-0

8

Dec-08

Feb-0

9

Apr-09

Jun-0

9

Aug-09

Oct-0

9

Dec-09

Feb-1

0

Apr-10

Jun-1

0

Aug-10

Oct-1

0

Dec-10

Feb-1

1

Apr-11

Jun-1

1

Aug-11

$ p

er

gallo

n

Total Cost per Gallon Revenue per Gallon Net Return/Gal.

Ethanol Biodiesel

• Ethanol industry profitability has oscillated between breakeven

and modestly profitable since late 2007. The plants that have

continued to operate have done so by effective hedging of raw

material costs and finished goods prices, making large

improvements in operating efficiency and skillfully managing

working capital.

• Sales of DDGS and corn oil (by some) have become crucial to

plant profitability.

• The ongoing high price of corn is challenging the industry.

• The biodiesel industry has been a breakeven to losing business

for years. The plants that have been able to survive have multi-

feedstock capability, have been able to access some specialty

markets and have a reputation for a quality product.

• Glycerin, a co-product of biodiesel production provides little

additional revenue to biodiesel operators.

• The cost of SBO and the potential permanent loss of the

blenders credit is severely limiting the industry’s future

prospects.


4

Ethanol Biodiesel

0

5,000

10,000

15,000

20,000

25,000

10/11 11/12 12/13 13/14 14/15 15/16 16/17

Eth

an

ol S

up

ply

(m

illio

n g

allo

ns)

EtOH-corn Cellulosic EtOH-imports

0

200

400

600

800

1,000

1,200

10/11 11/12 12/13 13/14 14/15 15/16 16/17

Eth

an

ol S

up

ply

(m

illio

n g

allo

ns)

Soy-based Corn Oil-based Other

Source: FAPRI, August 2011 Baseline Update for U.S. Agricultural Markets Source: FAPRI, U.S. Baseline Briefing Book Projections for agricultural and biofuels markets

• FAPRI is forecasting corn-based ethanol to continue to grow,

exceeding the RFS2 mandate of 15 billion gallons by the 15/16

marketing year, despite the loss of blenders credit and the import

tariff. The major drivers of continued growth are the RFS2 mandate,

the rising value of RIN’s, ethanol’s price competitiveness with gasoline

and the marketing of E15. The January forecast projects corn-based

ethanol volumes will reach 16 billion gallons by 20/21.

• Cellulosic ethanol only reaches 242 million gallons in 16/17.

• Ethanol imports (sugarcane-based) rise to fulfill a portion of the

advanced biofuels requirement of RFS2. They reach 3.7 billion

gallons by the 16/17 marketing year.

• The biodiesel industry is forecast to continue to grow on the strength

of the biodiesel mandate within RFS2, despite the loss of the

blender’s credit by the end of 2011. RIN values surged at the

beginning of the year to draw more capacity into production.

• SBO and animal fats are expected to provide the bulk of the

feedstocks needed in the 10/11 marketing year.

• Use of SBO for biodiesel production peaks in 11/12 and declines

gradually thereafter. Corn oil extracted from DDGS at ethanol plants

accounts for 20% of biodiesel feedstocks by 16/17, gaining share at

the expense of animal fats.


Biofuels Industry Outlook – Future Opportunity

4

Ethanol

• Current installed capacity is approximately 14.7 billion gallons, with no

new corn-based plants under construction. It is difficult to see why

investors would commit $150 million to build a new plant when returns

have been so marginal.

• A prior FAPRI analysis of the loss of the benders credit estimated that

production capacity could drop by ~1 billion gallons, yet their most recent

analysis shows no real effect from the imminent loss of the credit.

• The FAPRI forecast is based on minimal year-to-year volatility in corn or

ethanol prices which seems questionable. Plant margins may face

additional pressure in the years ahead and some older capacity could be

retired rather than face periods of negative returns and the costs of

replacing equipment.

• Water is going to become an increasing problem in the plains states and

ethanol plants could see water allocations reduced in favor of municipal

use.

• The ethanol industry is approaching the maximum blending requirements

of RFS2 which will inhibit future growth.

• Market acceptance of higher ethanol blends is weak and some states are

removing incentives for corn-based ethanol or resisting the introduction

of E15 on non-flex fuels vehicles.

Political support for biofuels in







Biofuels Industry Outlook – Risks to Growth

4

Biodiesel

• FAPRI is forecasting SBO prices of over $0.50 per pound to 20/21. It

seems highly unlikely that there will be any additional growth in soy-

based biodiesel.

• The permanent loss of the blenders credit could convince a number of

firms to finally exit the business.

• The U.S. biodiesel industry has been operating at ~20% utilization for

five years. Capital is usually redeployed by investors when it fails to

provide adequate returns. A lot of capacity may only exist on paper.Political support for biofuels in







Biofuels Industry Outlook – Risks to Growth

Biofuels Industry - References

• BP - http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481

• govtrack.us - http://www.govtrack.us/congress/bill.xpd?bill=h110-6

• Iowa Biodiesel Board - http://www.iowabiodiesel.org/

• Iowa Department of Economic Development - http://www.iowalifechanging.com/business/ethanol_biodiesel.aspx

• Iowa Renewable Fuels Association - http://www.iowarfa.org/documents/2008IowaBiofuelsEconomicImpact012409_000.pdf

• The Agricultural Marketing Resource Center at Iowa State University - http://www.agmrc.org/

• The Food and Agricultural Policy Research Institute - http://www.fapri.org/

• U.S. Energy Information Administration - http://www.eia.gov/


http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481

http://www.govtrack.us/congress/bill.xpd?bill=h110-6

http://www.iowabiodiesel.org/

http://www.iowalifechanging.com/business/ethanol_biodiesel.aspx

http://www.iowarfa.org/documents/2008IowaBiofuelsEconomicImpact012409_000.pdf

http://www.agmrc.org/

http://www.fapri.org/

http://www.eia.gov/

Chapter 6: Appendix


Appendix A


Summary of Steering Committee Meetings

First Steering Committee Meeting

Date: April 14, 2011

Time: 3:00-5:00 p.m.

Location: Embassy Suites, Downtown Des Moines

Agenda

• Meet & Greet

• Project Introduction

• Steering Committee Introductions

• Governor Branstad Remarks

• Working Session

– “Big Picture” Assumptions – Situational Analysis

– Opportunities / Obstacles

– Recommended Interviewees & Research

• Wrap-Up


First Steering Committee Meeting –

Top Obstacles & Opportunities for Iowa Agriculture Identified by Steering Committee

• Obstacles

– Uncertain public policy (federal and Iowa)

– Regulations (federal, state, local)

– Inadequate infrastructure for logistics, processing

– General public not connected to, or knowledgeable about, agriculture

– Not enough educated/skilled labor

– Need available credit, especially for diversification and entrepreneurship

– Inadequate education/R&D funding

• Opportunities

– Projected increase in global demand for vegetable oil and protein

– Expand trade agreements/relationships

– Logistics to access world markets (Missouri River given as an example)

– Potential to create incentives to attract businesses to Iowa

– Grow/expand livestock production and processing

– Revisit CRP - return idle land to production

– Create incentives to start businesses in Iowa


Second Steering Committee Meeting

Date: July 13, 2011

Time: 8:00 a.m. – 1:00 p.m.

Location: Iowa Pork Producers Office, Clive

Agenda

• Welcome

• Presentation by Kip Thompson, President of Global Site Strategies, Economic Development Advisors

• Project Update

• Introduction to Working Session

• Working Session Breakouts

– Innovation

– Business Climate

– Comparative Advantages

– Build on Iowa’s Agricultural Strengths

– New to Iowa

– Add Value

• Report Out

• Wrap-up

• Lunch & Learn with Dr. Dermot Hayes


Final Steering Committee Meeting

Date: October 4, 2011

Time: 9:00 a.m. – 12:00 p.m.

Location: Iowa Soybean Association, Ankeny

Agenda

• Welcome

• Setting the Stage: Iowa in the World of Agriculture

• Iowa Agriculture in 2030

– Strategies

– Recommendations

• Prioritization Exercise

• Discussion

• Next Steps & Closing

• Lunch


Appendix B | Final Steering Committee Meeting


Prioritization Exercise Results

Prioritization Process

• A list of 42 Recommendations was formulated as a result of the almost 100 interviews completed.

• Each Steering Committee member was asked to prioritize the 42 Recommendations (along with their

corresponding Actions)

• For each Recommendation, Steering Committee members were asked to place a blue dot on a grid that was

split into 4 quadrants

– Along the X axis was “Doability” - The ease with which the recommendation could be implemented (difficult / easy)

– Along the Y axis was “Economic Importance/Impact” – It’s the additional value created (increase in GSP; increase in

incomes and jobs)

– It was important for them to not only consider which box to place their dot but also the relativity of each axis

– It was made clear that blue dots in Quadrant 4 (High Economic Impact & Low Doability would likely be the “highest

priority” recommendations and be presented as such in the final report.

– Each Steering Committee member was also given a few “red” dots. The red dots were also known as “save cards”. They

were to place a “red” dot on the grid if they were concerned that the Recommendation was not going to be among the

“highest priority” recommendations but were “highly important” and should be strongly considered as such.

– We also asked the Steering Committee members to consider if any recommendations were potentially missing and to

bring those forward in the process.

• The slides that follow are a compilation of the prioritization exercise with the Steering Committee.



2

3

7

Top 3 Priorities at the “highest” level (section of the visual)

• Improve Business Climate• Protect Comparative Advantage• Expand Exports

2

2

3 0

There are 3 Top Priorities based on analyzing the data according to the

seven sections of the visual

* The numbers in each circle represent the number of “recommendations” that were prioritized by the Steering Committee as the “highest priority”.

There are 5 Top Priorities based on analyzing the data according to

the 12 Strategies


1. Strong Soil, Safe Water *

2. Improved Transportation Infrastructure

3. Qualified, Adequate Workforce *

4. Reasonable Regulations and Taxes **

5. Supportive Business Environment **

6. Innovation Reputation

7. World-Class Research and Education

8. Building the Base

9. Adding Value

10. Nurturing the New

11. Expanding Exports

12. Strategic Leadership

Top 5 Priorities by “Strategy” level

* These 2 Strategies are 2 of the 3 areas under “Protect Comparative Advantages”** These 2 Strategies are 2 of the 3 areas under “Improve Business Climate”


the 42 Recommendations


Top 7 by “Recommendations” level

under the Lens of “Expanding Economic Activity”


under the Lens of “the Fundamentals for Growth”

4- 2nd tier8 – 3rd tier

2 – Lowest tier

0 - 2nd tier2 – 3rd tier

7 – Lowest tier


the 42 Recommendations



Under the Lens of “Expanding Economic Activity”

0 - 2nd tier2 – 3rd tier

7 – Lowest tier

1 2

43

-10

-5

0

5

10

-10 -5 0 5 10



-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

Build the BaseAdd ValueNurture the New Expand Exports

1

2

1

2

AV2AV6

AV3high

low

Eco

no

mic

Imp

act

difficult easy

Do-ability


livestock.

• Embrace production agriculture as an Iowa tradition, strength and base for

future growth.

• Adopt a pro-active, self-regulating attitude in order to prevent problems.

• Recognize the debt and equity capital needs of commodity producers, and

processors that source commodities, caused by increasingly volatile market

cycles.

Building the Base


BB 1 – Increase the production of established Iowa commodities, both

crop and livestock.


Strong Quadrant 4 (4.5, 6.5) representation among Private & Public

Sectors; 2 Red Dots indicating its importance (Both Public Sector)

1 2

43

BB 2 – Embrace production agriculture as an Iowa tradition, strength &

base for future growth


Strong Quadrant 4 (5, 3) representation among Private & Public

Sectors

1 2

43

BB 3 – Adopt a pro-active, self-regulating attitude in order to prevent

problems


Quadrant 1 (-1,-4.25) representation among Private & Public Sectors

1 2

43

BB 4 – Recognize the debt & equity capital needs of commodity producers &

processors that source commodities, caused by increasingly volatile market

cycles


Borderline Quadrants 1 & 3 (-1.25, .5) representation among Private

& Public Sectors

1 2

43

• Provide a flexible, responsive business, government and social environment

where unimagined value-added businesses may establish themselves and

flourish.



rural communities.

• Develop product- to-customer systems that are flexible enough to

accommodate specialty crop production, identity preserved production and

higher quality production.

• Build on global leadership in added-value products (i.e. bio-fuels, meat and


Adding Value


AV 1 – Provide a flexible, responsive business, government & social environment

where unimagined value-added businesses may establish themselves & flourish


Solid Quadrant 3 (-4.5, 2.75) representation among Private & Public

Sectors

1 2

43

AV 2 – Add value to the value-added & build on the success of Iowa

businesses


Strong Quadrant 4 (1.5, 6.25); moderate difficulty yet high economic

impact; Concerns relative to difficulty were expressed by 3 SC members

1 2

43

AV 3 – Recruit further processing businesses to locate & grow in Iowa,

especially in rural communities


Borderline Quadrant 3 & 4 (-.25, 6); very high economic impact; more

concern about degree of difficulty particularly from the Private sector

1 2

43

AV 4 – Develop product-to-customer systems that are flexible enough to

accommodate specialty crop, identity preserved production and higher quality

production


Quadrant 1 (-1.5, -1.5) representation among Private & Public Sectors (Public Sector tended to view as a little easier to implement than the Private Sector)

1 2

43

AV 5 – Build on global leadership in value-added products (i.e. bio-fuels,

meat and other food processing


Strong Quadrant 4 (1.5, 5.5) representation across both sectors; very high economic impact (concern expressed by a SC member with experience about level of difficulty to implement)

1 2

43





• Encourage institutions to incorporate local production into their food service

menus.


investment capital.

Nurturing the New


NN 1 – Provide an environment in which non-traditional ideas/

businesses may establish a foothold & grow


Strong Quadrant 1 (-1.75, -3.5) across both sectors

1 2

43

NN 2 – Review the needs of the new, innovative agriculture production &

processing and prioritize efforts to help with those needs


Strong Quadrant 2 (5, -6) representation across both sectors

1 2

43

NN 3 – Encourage institutions to incorporate local production into their

food service menus


Strong Quadrant 2 (2.5, -7.5) representation across both sectors;

very low projected economic impact

1 2

43

NN 4 – Assist “new to IA” production & processing in their efforts to

access investment capital


Strong Quadrant 2 (2, -3) representation across both sectors;

projected low economic impact

1 2

43







Expanding Exports


EE 1 – Lead efforts to open markets for Iowa commodities & value-added

products


Strong Quadrant 4 (1.75, 6.75) representation across both sectors; very high economic impact (Concern expressed by 2 SC members about level of difficulty to implement)

1 2

43

EE 2 – Include Iowa-based animal health products, production systems in

promotion efforts, as livestock production continues to increase globally


Quadrant 4 (1.25, 1.5); moderate difficulty & economic impact

(concern expressed by Private Sector)

1 2

43

EE 3 – Promote & market Iowa agriculture & processing knowledge, expertise &

management skills: Knowledge based consulting for bio-fuels processing, food



Borderline Quadrant 2 & 4 (1.5, -.5); moderate difficulty & moderate

economic impact

1 2

43

There are 19 Top Priorities based on analyzing the data according to the

42 Recommendations



under the Lens of “the Fundamentals for Growth”

4- 2nd tier8 – 3rd tier

2 – Lowest tier

Fundamentals to Expanding Economic Activity


-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10


S&WTransportation InfrastructureWorkforce

13

S&W2

1

1

4

2

3

high

low

Eco

no

mic

Imp

act

difficult easy

Do-ability

1 2

43




-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

1

2

3

4

1

23 4

1

23

Open for BusinessRegulations & TaxesStrategic Leadership

high

low

Eco

no

mic

Imp

act

difficult easy

Do-ability

1 2

43




-10

-5

0

5

10

-10 -5 0 5 10

-10

-5

0

5

10

-10 -5 0 5 10

Research & EducationInnovation, Culture & Technology & Entrepreneurism

3

R&E 1 & 2

34

1

ICTE 2

high

low

Eco

no

mic

Imp

act

difficult easyDo-ability

1 2

43






programs.

Workforce

Soil &

Water

Transportation

Infrastructure



PCA - S&W 1 – Re-energize Iowa’s commitment to soil stewardship,

addressing both retention and quality concerns


Strong Quadrant 4 (2, 6.5) Representation among Private & Public

Sectors; very high economic impact projected

1 2

43

PCA - S&W 2 – Protect Iowa’s ground & surface water while optimizing

efficient utilization for both production and processing


Median in Borderline between Quadrant 3 & 4 (-.5, 5.25); high

economic impact projected

1 2

43

PCA - S&W 3 – Prioritize vulnerable landscapes & soils for federal and

state incentive programs


Strong Quadrant 4 (3, 5.25) Representation among Private & Public

Sectors; high economic impact projected

1 2

43


Upper Mississippi and Illinois rivers (authorized in the 2007 Water Resources

Development Act).








Workforce

Soil &

Water

Transportation

Infrastructure



PCA - TI 1 – Influence Congress to appropriate funding for lock expansion

projects on the Upper Mississippi and Illinois rivers (authorized in the 2007 Water

Resources Development Act)


Strong Quadrant 3 (-4.75, 1.5) Representation among Private &

Public Sectors; Received 1 Red Dot (Public Sector)

1 2

43

PCA - TI 2 – Assure that Missouri River is maintained as a viable option for

commercial movement of western Iowa commodities and related products into

the extensive US inland waterway system and global markets


Quadrant 1 (-2, -1.75) Representation among Private & Public

Sectors; 2 Red Dots (1 Private & 1 Public Sector)

1 2

43

PCA - TI 3 – Plan for projected increases in Iowa crop & livestock production,

food and fuel processing and manufacturing, and resultant truck traffic increases


Quadrant 3 (-1.5, 4.5) Representation among Private & Public

Sectors; 1 Red Dot (Public Sector)

1 2

43

PCA - TI 4 – Assure adequate freight rail line capacity, access and provider

options to serve agricultural production and processed product rail needs


Strong Quadrant 3 (-8.5, 3.75) Representation among Private &

Public Sectors; 1 Red Dot (Private Sector)

1 2

43



ag/processing.

Workforce

Soil &

Water

Transportation

Infrastructure



PCA - W 1 – Educate, recruit, attract & retain a workforce with knowledge of &

passion about agriculture, processing and the businesses that serve

ag/processing


Borderline between Quadrant 3 & 4 (-.25, 6) therefore moderate difficulty yet very high economic impact representation among Private & Public Sectors

1 2

43

• Stabilize regulations that affect businesses and assure that they are based on

science; documented experience in Iowa or other states; and thorough,

relevant study.




and attraction of bio based businesses to Iowa. If advisable, take measures to

improve Iowa’s business tax ranking over the next five years, then continue to

strive for an ever more business-friendly tax structure.

Strategic

Leadership

Regulations

& Taxes

Open for

Business



IBC – R&T 1 – Stabilize regulations that affect businesses and assure that they

are based on science, documented experience in Iowa or other states, and

thorough relevant study


Strong Quadrant 3 (-2.25, 8.5) representation among Private & Public

Sectors; very high economic impact; 1 red dot (private sector)

1 2

43

IBC – R&T 2 – Administer reasonable, fair and relevant regulatory

enforcement


Borderline Q3 & Q4 (-.5, 7); very high economic impact;

1 Red Dot

1 2

43

IBC – R&T 3 – Effect lasting improvement to the state regulatory and

permitting processes


Borderline Q3 & Q4 (0, 5.5); high economic impact projected;

2 red dots from public & private

1 2

43

IBC – R&T 4 – Determine the effect that Iowa’s business tax ranking is having on retention and

attraction of bio based businesses to Iowa. If advisable, take measures to improve Iowa’s business

tax ranking over the next 5 years, then continue to strive for an ever more business-friendly tax

structure


Quadrant 4 (.75, 5); high projected economic impact

1 2

43

• Convince Iowa businesses and those considering locating here that Iowa is

“Open for Business” and is ready to help resolve problems or share

opportunities.

• Support Iowa’s new public-private approach to economic development and

assure the new system is supportive of a bio-economy and prioritizes its

needs.

• Assure fiber optic broadband transmission is available to Iowa communities for

use by agriculture businesses, processing businesses, input providers &

assure the integrity of satellite transmissions to GPS receivers.

• Encourage foreign investment in Iowa-based agricultural research, production

and processing.

Strategic

Leadership

Regulations

& Taxes

Open for

Business



IBC - OB 1 – Convince Iowa businesses & those considering locating here that

Iowa is “Open for Business” and is ready to help resolve problems or share

opportunities


Strong Quadrant 4 (5.5, 5) representation among Private & Public

Sectors

1 2

43

IBC - OB 2 – Support Iowa’s new public-private approach to economic

development and assure the new system is supportive of a bio economy and

prioritizes its needs


Quadrant 4 (4, 1.25) representation among Private & Public Sectors

1 2

43

IBC - OB 3 - Assure fiber optic broadband transmission is available to Iowa

communities for use by ag businesses, processing businesses, input providers

& assure the integrity of satellite transmission to GPS receivers


Borderline Quadrant 4 (.25, 3.5) with moderate difficulty & adequate

economic impact

1 2

43

IBC - OB 4 – Encourage foreign investment in Iowa-based agricultural

research, production and processing


Borderline between Quadrant 3 & 4 (-1, .5) with moderate difficulty

and moderate economic impact

1 2

43

• Governor Branstad leads Iowa campaign to increase the size and scope of

agriculture.

• Governor Branstad forms and leads an I-State Coalition (IA, IL, IN)

• Increase the effective collaboration of agriculture and related sectors by

forming and empowering an Iowa Agri-Growth Council that provides a

foundation for cooperation and prioritization across Iowa’s diverse agriculture

sector.

Strategic

Leadership

Regulations

& Taxes

Open for

Business

Strategic Leadership


IBC - SL 1 – Governor Branstad leads Iowa campaign to increase the

size & scope of agriculture


Quadrant 4 (1.75, 2) representation among Private & Public Sectors

1 2

43

IBC - SL 2 – Gov. Branstad forms & leads an I-State Coalition


Quadrant 2 (3.25, -2.25) representation among Private & Public

Sectors; 1 Red Dot (Private Sector)

1 2

43

IBC - SL 3 – Increase the effective collaboration of agriculture by forming &

empowering an Iowa Agri-Growth Council that provides a foundation for

cooperation and prioritization across Iowa’s diverse agriculture sector


Quadrant 2 (4, -1.5) representation among Private & Public Sectors

1 2

43


and provide Iowa’s public research institutions with the resources needed to





business/industry.

Innovation Culture, Technology

& Entrepreneurism

Research &

Education

World-Class Research and Education


EI - R&E 1 – Recognize the value of research as both a basis & a catalyst for

innovation & provide Iowa’s public research institutions with the resources

needed to effectively foster innovation


Quadrant 3 (-2, 6) with very high economic impact;

3 Red Dots (1 Private & 2 Public Sector)

1 2

43

EI - R&E 2 – Establish & foster an innovative & entrepreneurial climate

throughout IA’s education systems


Quadrant 3 (-2, 6) with very high economic impact;

1 2

43

EI - R&E 3 –Strengthen the exchange of knowledge between science &

business/industry


Borderline Quadrant 4 (.75, .25) with moderate difficulty & moderate

economic impact; 1 Red Dot (Private sector)

1 2

43

• Take the lead for development of food safety technologies, systems and

businesses that will serve the growing global demand for safe food supplies.

• Identify and eliminate any unnecessary laws and regulations that stifle or slow

adoption and utilization of technologies. Avoid passage of such


• Create a climate for innovation in agriculture, food, fiber, pharmaceutical and



Innovation Culture, Technology

& Entrepreneurism

Research &

Education



EI - ICTE 1 – Take the lead for development of food safety technologies, systems

& businesses that will serve the growing global demand for safe food supplies


Borderline Quadrant 3 & 4 (-.25, .75); moderate difficulty & economic importance; Public sector tended to rate this higher on economic importance than the private sector

1 2

43

EI - ICTE 2 – Identify & eliminate any unnecessary laws & regulations that stifle or

slow adoption & utilization of technologies. Avoid passage of such

laws/regulations in the future


Borderline Quadrant 3 & 4 (-.25, 3.25); moderate difficulty however relatively higher on economic importance; 2 Red dots (Both Public Sector)

1 2

43

EI - ICTE 3 – Create a climate for innovation in agriculture, food, fiber,

f(ph)armaceutical and renewable fuel businesses, and in the supporting sciences


Quadrant 4 (.5, 4.75) representation among Private & Public Sectors;

fairly high for projected economic impact; 1 Red Dot (Private sector)

1 2

43

EI - ICTE 4 – Encourage & support entrepreneurism


Borderline Quadrant 3 & 4 (-.5, 3.5); moderately high projected

economic impact with moderate difficulty

1 2

43

Appendix C | Responsibilities


Priority and Secondary Recommendations and

Actions Organized by Who is Responsible

Recommendations, Actions & Responsible Parties

• After the recommendations were prioritized, the Context Team identified who would be the potential parties to

lead and/or be a team member for each Recommendation and its corresponding Actions.

• The following slides are organized by the parties responsible for implementing each Recommendation and its

corresponding Actions. Each responsible party has two types of slides:

– Team Leader(s)

– Team Member(s)


Priority Strategies, Recommendations and Actions

Organized by Who is Responsible


USDA


Team

Leader

Strategy Recommendations Actions Team Leader(s) Team Member(s)

Build the Base

Increase the production of

established Iowa commodities, both

crop and livestock.

Facilitate approval and adoption of technologies

that will increase yields without depleting or

compromising resources.

USDA

Congress, Iowa Secretary

of Ag, ISU, Ag &

Commodity Organizations,

Ag Producers

USDA


Team

Member







USDA, Iowa Governor,

Iowa Secretary of Ag, ISU,

Ag & Commodity

Organizations, Ag

Producers

Support research and development of processes

that turn bi-products and waste materials into

usable products.

Businesses


Iowa Legislature, ISU, Ag

& Commodity

Organizations, Ag

Producers

Support biofuels research and development to

stay on the cutting edge of new efficiencies and

technologies.

Businesses



& Commodity

Organizations

Promote and utilize livestock manure as a

valuable, natural, locally-produced source of

nitrogen and organic matter.


USDA, Iowa Legislature,

IDALS, ISU, Ag &


Ag Producers, SWCDs,

Coalition to Support

Farmers

Prevent the need for subsidy programs by

providing access to revenue insurance, loan

guarantees, etc.

Congress USDA, Iowa Governor


commodity producers, and processors that

source commodities, caused by increasingly

volatile market cycles.

Lenders

USDA, Congress, Iowa

Governor, Iowa Secretary

of Ag, Businesses

World Class

Research &

Education

Support, to the greatest extent

possible, research and innovation that

builds Iowa's agriculture production

and value added endeavors.

Build the Base



crop and livestock.

USDA NRCS


Team

Leader



protective measures and, possibly, more incentive

for set-aside.

USDA NRCS Congress

Release non-vulnerable land from protection, or

set-aside, in order to meet growing production

needs.

USDA NRCS

Strong Soil, Safe

Water

Prioritize vulnerable landscapes and

soils for federal and state incentive

programs.

USDA NRCS


Team

Member


Educate landlords about the value of their asset

and the potential to lose that value through tillage

practices that do not protect the soil from eroding

and losing organic matter.

SWCDsUSDA NRCS, ISU, Ag

Producers

Promote the value of adding organic matter to

Iowa soils by proving long-term enhancement of

productive capacity and retention of top soil.

SWCDsUSDA NRCS, IDALS, Ag

Producers

Strong Soil, Safe

Water

Re-energize Iowa’s commitment to

soil stewardship, addressing both

retention and quality concerns.

Congress


Team

Leader


World Class

Research &

Education












Ag & Commodity

Organizations, Ag

Producers

Build the Base



crop and livestock.



guarantees, etc.


Congress


Team

Member


Strong Soil, Safe

Water

Prioritize vulnerable landscapes and

soils for federal and state incentive

programs.


protective measures and, possibly, more incentive

for set-aside.

USDA NRCS Congress




USDA


of Ag, ISU, Ag &


Ag Producers





Lenders



of Ag, Businesses

Expand Exports

Lead efforts to open markets for

Iowa commodities and value-added

products.



Congress, Iowa

Legislature, Iowa

Secretary of Ag

Build the Base



crop and livestock.

Iowa Governor


Team

Leader


Perform an in-depth scan of regulatory and

permitting programs to identify those that are not

delivering the legislated intent.

Iowa GovernorIDNR, Other Regulatory

Agencies

Evaluate systems proven to bring about

improvement and choose one best suited to

Iowa’s government (i.e. Six Sigma, Good to

Great, Lean Manufacturing, etc.).

Iowa Governor

Provide funding and lead application of the

chosen system to government agencies and

systems, beginning with regulatory and permitting

programs that affect agriculture and related

businesses.


Determine the effect that Iowa’s

business tax ranking is having on the

retention and attraction of bio based

businesses to Iowa.

If analysis proves advisable, take measures to

improve Iowa’s business tax ranking over the next

five years, then continue to strive for an ever

more business-friendly tax structure.


World Class

Research &

Education

Recognize the value of research as

both a basis and a catalyst for

innovation and provide Iowa's public

research institutions with the

resources needed to effectively

foster innovation.

Increase state support of research and

development that improves Iowa’s position as an

agriculture, food and renewable fuel innovator.

Iowa Governor, Iowa

Legislature



Congress, Iowa

Legislature, Iowa

Secretary of Ag


arrangements between Iowa producers and

processors with potential foreign customers.



dependability: promote Iowa products as high

quality, safe and beneficial .

Iowa Governor

Iowa Secretary of Ag, I-

PEP, Ag & Commodity

Organizations, Businesses

Effect lasting improvement to the

state regulatory and permitting

processes.



products.

Reasonable

Regulations &

Taxes

Expand Exports

Iowa Governor


Team

Member


Pass only laws/regulations with sunset dates so

that they must be revisited within a few years and



Reform the permit system to allow applications

and permits to cover the entire state, not just a

particular jurisdiction.

IDNR, Other Regulatory

Agencies

Iowa Governor, Iowa

Legislature, Rural



permits, so that reapplication is not necessary

each time regulations change or when businesses

change only one aspect of their operation.


Agencies

Iowa Governor, Iowa

Legislature, Rural


Administer reasonable, fair and

relevant regulatory enforcement.

Create a culture of goal-directed enforcement

within state regulatory agencies (enforcement

should be directed by the goal of the regulation)

and discourage a ‘gotcha’ approach.


AgenciesIowa Governor




businesses to Iowa.

Lower corporate income tax or provide a tax

credit for investment to offset inhibiting effect of

business tax.


Reasonable

Regulations &

Taxes



processes.

Iowa Governor


Team

Member









Ag & Commodity

Organizations, Ag

Producers



usable products.

Businesses



& Commodity

Organizations, Ag

Producers



technologies.

Businesses



& Commodity

Organizations

Focus currently available state funding on

research and development programs that foster

innovation and lead to economic activity.

ISU

Iowa Governor, Iowa

Legislature, Other

Universities

Reward those institutions or individuals who focus

their research on innovative, cutting edge solutions

to current and emerging challenges in Iowa’s

agriculture industry.

Board of RegentsIowa Governor, Iowa

Legislature, IDALS, I-PEP


possible for Iowa researchers to monitor and

manage research and development around the

world.

Businesses

Iowa Governor, Iowa

Legislature, ISU, Other

Universities

Tie state research funding to an incentive to

develop and commercialize in Iowa.ISU

Iowa Governor, Iowa

Legislature










foster innovation.

World Class

Research &

Education

Iowa Governor


Team

Member




guarantees, etc.






Lenders



of Ag, Businesses

Build on global leadership in value-

added products (i.e. bio-fuels, meat

and other food processing).

Recruit new food processing businesses to the

state.I-PEP

Iowa Governor, Iowa

Secretary of Ag, IDALS,

Ag & Commodity


Add value to the value-added and

build on the success of Iowa

businesses.





Iowa LegislatureIowa Governor, Iowa

Secretary of Ag



crop and livestock.

Build the Base

Add Value

Iowa Legislators


Team

Leader




processes.

Pass only laws/regulations with sunset dates so

that they must be revisited within a few years and






businesses to Iowa.

Lower corporate income tax or provide a tax

credit for investment to offset inhibiting effect of

business tax.













Ag & Commodity

Organizations, Ag

Producers






foster innovation.

Increase state support of research and

development that improves Iowa’s position as an

agriculture, food and renewable fuel innovator.

Iowa Governor, Iowa

Legislature

Add Value



businesses.






Secretary of Ag

Reasonable

Regulations &

Taxes

World Class

Research &

Education

Iowa Legislators


Team

Member


Provide funding and lead application of the

chosen system to government agencies and

systems, beginning with regulatory and permitting

programs that affect agriculture and related

businesses.






Agencies

Iowa Governor, Iowa

Legislature, Rural







Agencies

Iowa Governor, Iowa

Legislature, Rural





businesses to Iowa.

If analysis proves advisable, take measures to

improve Iowa’s business tax ranking over the next

five years, then continue to strive for an ever

more business-friendly tax structure.


Reasonable

Regulations &

Taxes



processes.

Iowa Legislators


Team

Member




usable products.

Businesses



& Commodity

Organizations, Ag

Producers



technologies.

Businesses



& Commodity

Organizations




ISU

Iowa Governor, Iowa

Legislature, Other

Universities










world.

Businesses

Iowa Governor, Iowa


Universities



Iowa Governor, Iowa

Legislature

World Class

Research &

Education










foster innovation.

Iowa Legislators


Team

Member


Build the Base



crop and livestock.






IDALS, ISU, Ag &




Farmers



Congress, Iowa

Legislature, Iowa

Secretary of Ag

Support crop and livestock health protection

systems and tools that prevent contracting and

spreading diseases that will close markets.


Iowa Legislature, IDALS,

ISU, Ag & Commodity

Organizations, Businesses,

Ag Producers

Expand Exports



products.

Iowa Secretary of Agriculture


Team

Leader


Strong Soil, Safe

Water

Protect Iowa’s ground and surface

water while optimizing efficient

utilization for both production and

processing.


Management Strategy, in developing approaches

to water quality protection that do not

unnecessarily compromise production practices or

processing needs.


IDALS, Ag & Commodity

Organizations, Ag

Producers, SWCDs

Build the Base



crop and livestock.






IDALS, ISU, Ag &




Farmers

Add Value






IDALS, I-PEP, Ag &


Ag Producers, Coalition to

Support Farmers



products.






ISU, Ag & Commodity


Ag Producers

Include Iowa-based animal health

products and production systems in

promotion efforts, as livestock

production continues to increase

globally.

Iowa Secretary of AgI-PEP, Ag & Commodity

Organizations

Promote and market Iowa agriculture

and processing knowledge, expertise

and management skills: Knowledge

based consulting for bio fuels

processing, food safety, food

processing, livestock production, etc.

Iowa Secretary of Ag I-PEP

Expand Exports



Team

Member


World Class

Research &

Education












Ag & Commodity

Organizations, Ag

Producers




USDA


of Ag, ISU, Ag &


Ag Producers





Lenders



of Ag, Businesses

Build the Base



crop and livestock.



Team

Member


Support development of biofuels bi-product

markets.I-PEP

Iowa Secretary of Ag,

IDALS, ISU, Ag &


Businesses


state.I-PEP

Iowa Governor, Iowa


Ag & Commodity




businesses.






Secretary of Ag

Recruit further processing businesses

to locate and grow in Iowa,

especially in rural communities.

Identify potential for ‘clusters’ and pursue

businesses in those sectors.Businesses


PEP, Rural


Assess the costs vs. benefit of affecting change in

the system and determine advisability.ISU




Ag Producers

Facilitate changes in the current system that have

the potential to benefit consumers and a full

spectrum of production.

Businesses

Iowa Secretary of Ag, Ag

& Commodity

Organizations, Ag

Producers

Add Value




Develop infrastructure and systems

that support segregation, storage,

movement and marketing of value-

added crops and products, specialty

crops, livestock, etc.



Team

Member




Congress, Iowa

Legislature, Iowa

Secretary of Ag


arrangements between Iowa producers and

processors with potential foreign customers.





Iowa Governor


PEP, Ag & Commodity


Expand Exports



products.

Iowa Department of Agriculture and Land Stewardship


Team

Leader


Work toward and maintain a limit of soil loss

tolerance (T) or less.IDALS Ag Producers, SWCDs




IDALS, Ag Producers,

SWCDsISU

Add Value






Strong Soil, Safe

Water






Team

Member




retention and quality concerns





Producers




processing.





processing needs.



Organizations, Ag

Producers, SWCDs

World Class

Research &

Education






foster innovation.












IDALS, ISU, Ag &




Farmers

Encourage and assist local communities that want

to attract and support local livestock production

and food processing.

I-PEP IDALS

Strong Soil, Safe

Water

Build the Base



crop and livestock.



Team

Member



markets.I-PEP


IDALS, ISU, Ag &


Businesses



IDALS, I-PEP, Ag &



Support Farmers


state.I-PEP

Iowa Governor, Iowa


Ag & Commodity





Identify and promote communities that have

plentiful water supply and treatment capability for

ag and food processing plants.

Regional Economic

Development Organizations

I-PEP, IDALS, Rural












Ag Producers

Expand Exports



products.






ISU, Ag & Commodity


Ag Producers

Add Value




Iowa Partnership for Economic Progress


Team

Leader


Build the Base



crop and livestock.

Encourage and assist local communities that want

to attract and support local livestock production

and food processing.

I-PEP IDALS


markets.I-PEP


IDALS, ISU, Ag &


Businesses


state.I-PEP

Iowa Governor, Iowa


Ag & Commodity


Identify opportunities for adding value to products

and bi-products and target those opportunities in


I-PEPISU, Businesses,

Innovation Council



Ag & Commodity


Counties/Communities, Ag

Producers






ISU, Ag & Commodity


Ag Producers

Add Value






businesses.



Team

Member


World Class

Research &

Education






foster innovation.












IDALS, I-PEP, Ag &



Support Farmers







PEP, Rural








Regional Economic


I-PEP, IDALS, Rural


Add Value



Team

Member




products.




Iowa Governor


PEP, Ag & Commodity






globally.


Organizations

Promote and market Iowa agriculture

and processing knowledge, expertise

and management skills: Knowledge

based consulting for bio fuels

processing, food safety, food

processing, livestock production, etc.

Iowa Secretary of Ag I-PEP

Add Value






Expand Exports

Iowa Department of Natural Resources


Team

Leader


Strong Soil, Safe

Water




processing.

Continue to administer fair and reasonable

regulations that prevent run-off from production

agriculture and processing businesses into

surface water supplies.

IDNR


professional manner. Notify applicants

immediately if there is a problem with the

application and/or notify of delays in the process.


Agencies





Agencies

Iowa Governor, Iowa

Legislature, Rural







Agencies

Iowa Governor, Iowa

Legislature, Rural




misunderstandings or alternative interpretation of

the regulation, especially for first-time offenders.


Agencies







Reasonable

Regulations &

Taxes



processes.





Team

Member


Reasonable

Regulations &

Taxes



processes.





Agencies

Iowa Department of Education


Team

Leader








Ag & Commodity


Support, encourage and raise the profile of

community college and university education

programs that foster innovation.

IDE

ISU, Other Universities,

Community Colleges,

Board of Regents

World Class

Research &

Education

Establish and foster an innovative and

entrepreneurial climate throughout


Iowa State University


Team

Leader


Strong Soil, Safe

Water




Research use of cover crops as a potential

mitigation for soil loss created by the increasing

number of heavy rain events in Iowa.

ISU




ISU

Iowa Governor, Iowa

Legislature, Other

Universities



collaboration with other states’ and countries’

research institutions.




Iowa Governor, Iowa

Legislature






confidence.

ISU Businesses






Ag Producers

Encourage use of technologies that facilitate crop

to market systems in order to avoid costly

changes.

ISU Businesses, Ag Producers

Add Value






foster innovation.






World Class

Research &

Education



Team

Member







Producers





SWCDsISU








Ag & Commodity

Organizations, Ag

Producers



usable products.

Businesses



& Commodity

Organizations, Ag

Producers



technologies.

Businesses



& Commodity

Organizations






foster innovation.




world.

Businesses

Iowa Governor, Iowa


Universities







IDE


Community Colleges,

Board of Regents

Strengthen the exchange of

knowledge between science and

business/industry.

Fully utilize viable results of Iowa-based research

to add value to Iowa products.Businesses

ISU, Ag & Commodity

Organizations, Ag

Producers








Strong Soil, Safe

Water

World Class

Research &

Education



Team

Member





USDA


of Ag, ISU, Ag &


Ag Producers






IDALS, ISU, Ag &




Farmers


markets.I-PEP


IDALS, ISU, Ag &


Businesses





businesses.





Innovation Council






ISU, Ag & Commodity


Ag Producers

Expand Exports



products.






ISU, Ag & Commodity


Ag Producers

Add Value






crop and livestock.

Build the Base

Other Universities


Team

Member





ISU

Iowa Governor, Iowa

Legislature, Other

Universities



collaboration with other states’ and countries’

research institutions.





world.

Businesses

Iowa Governor, Iowa


Universities







IDE


Community Colleges,

Board of Regents

World Class

Research &

Education






foster innovation.

Community Colleges


Team

Member


World Class

Research &

Education







IDE


Community Colleges,

Board of Regents

Agriculture & Commodity Organizations


Team

Leader


Build the Base



crop and livestock.



Team’ approach to promoting responsible growth

in the sector.

Ag & Commodity

OrganizationsAg Producers



Team

Member


Strong Soil, Safe

Water




processing.





processing needs.



Organizations, Ag

Producers, SWCDs








Ag & Commodity

Organizations, Ag

Producers



usable products.

Businesses



& Commodity

Organizations, Ag

Producers



technologies.

Businesses



& Commodity

Organizations






Ag & Commodity




business/industry.



ISU, Ag & Commodity

Organizations, Ag

Producers





World Class

Research &

Education



Team

Member





USDA


of Ag, ISU, Ag &


Ag Producers






IDALS, ISU, Ag &




Farmers

Adopt a pro-active, self-regulating attitude in

order to prevent problems.Ag Producers

Ag & Commodity

Organizations



crop and livestock.

Build the Base



Team

Member



markets.I-PEP


IDALS, ISU, Ag &


Businesses



IDALS, I-PEP, Ag &



Support Farmers


state.I-PEP

Iowa Governor, Iowa


Ag & Commodity




businesses.



Ag & Commodity



Producers






ISU, Ag & Commodity


Ag Producers






Ag Producers




Businesses


& Commodity

Organizations, Ag

Producers









Add Value



Team

Member





Iowa Governor


PEP, Ag & Commodity







ISU, Ag & Commodity


Ag Producers





globally.


Organizations



products.

Expand Exports

Other Organizations


Team

Member


Build the Base



crop and livestock.

Mitigate concerns/conflicts that arise from

erroneous perceptions or cavalier attitudes.


Farmers

Other Organizations,

SWCDs

Rural Counties & Communities


Team

Member






Agencies

Iowa Governor, Iowa

Legislature, Rural







Agencies

Iowa Governor, Iowa

Legislature, Rural




businesses.



Ag & Commodity



Producers




PEP, Rural





Regional Economic


I-PEP, IDALS, Rural


Reasonable

Regulations &

Taxes

Add Value



processes.




Businesses


Team

Leader




usable products.

Businesses



& Commodity

Organizations, Ag

Producers



technologies.

Businesses



& Commodity

Organizations






foster innovation.




world.

Businesses

Iowa Governor, Iowa


Universities



business/industry.



ISU, Ag & Commodity

Organizations, Ag

Producers







PEP, Rural










Businesses


& Commodity

Organizations, Ag

Producers

World Class

Research &

Education





Add Value

Businesses


Team

Member


World Class

Research &

Education






Ag & Commodity


Build the Base



crop and livestock.





Lenders



of Ag, Businesses


markets.I-PEP


IDALS, ISU, Ag &


Businesses



confidence.

ISU Businesses


state.I-PEP

Iowa Governor, Iowa


Ag & Commodity




businesses.





Innovation Council






ISU, Ag & Commodity


Ag Producers






Ag Producers



changes.


Add Value









Businesses


Team

Member





Iowa Governor


PEP, Ag & Commodity







ISU, Ag & Commodity


Ag Producers

Add Value






Expand Exports



products.

Agriculture Producers


Team

Leader





Ag Producers





SWCDsISU

Employ practices recommended to increase

organic carbon levels in soil such as no-till, cover

crops, crop rotation and use of livestock manure

for fertilizer.

Ag Producers

Build the Base



crop and livestock.

Adopt a pro-active, self-regulating attitude in

order to prevent problems.Ag Producers

Ag & Commodity

Organizations




Strong Soil, Safe

Water



Team

Member









Producers





Producers




processing.





processing needs.



Organizations, Ag

Producers, SWCDs








Ag & Commodity

Organizations, Ag

Producers



usable products.

Businesses



& Commodity

Organizations, Ag

Producers



business/industry.



ISU, Ag & Commodity

Organizations, Ag

Producers

Strong Soil, Safe

Water

World Class

Research &

Education










Team

Member





USDA


of Ag, ISU, Ag &


Ag Producers






IDALS, ISU, Ag &




Farmers



Team’ approach to promoting responsible growth

in the sector.

Ag & Commodity

OrganizationsAg Producers



crop and livestock.

Build the Base



Team

Member







IDALS, I-PEP, Ag &



Support Farmers



businesses.



Ag & Commodity



Producers






ISU, Ag & Commodity


Ag Producers






Ag Producers



changes.





Businesses


& Commodity

Organizations, Ag

Producers

Expand Exports



products.






ISU, Ag & Commodity


Ag Producers






Add Value

Soil & Water Conservation Districts


Team

Leader







Producers





SWCDsISU





Producers

Strong Soil, Safe

Water




Soil & Water Conservation Districts


Team

Member










processing.





processing needs.



Organizations, Ag

Producers, SWCDs






IDALS, ISU, Ag &




Farmers




Farmers


SWCDs

Strong Soil, Safe

Water

Build the Base



crop and livestock.

Board of Regents


Team

Leader


World Class

Research &

Education






foster innovation.







Board of Regents


Team

Member


World Class

Research &

Education







IDE


Community Colleges,

Board of Regents

Local School Boards


Team

Member


World Class

Research &

Education








Innovation Council


Team

Member


Add Value



businesses.





Innovation Council

Lenders


Team

Leader


Build the Base



crop and livestock.





Lenders



of Ag, Businesses

Coalition to Support Iowa Farmers


Team

Leader


Build the Base



crop and livestock.




Farmers


SWCDs



Team

Member


Build the Base



crop and livestock.






IDALS, ISU, Ag &




Farmers

Add Value






IDALS, I-PEP, Ag &



Support Farmers

Other Regulatory Agencies


Team

Leader



professional manner. Notify applicants

immediately if there is a problem with the

application and/or notify of delays in the process.


Agencies





Agencies

Iowa Governor, Iowa

Legislature, Rural







Agencies

Iowa Governor, Iowa

Legislature, Rural




misunderstandings or alternative interpretation of

the regulation, especially for first-time offenders.


Agencies







Reasonable

Regulations &

Taxes



processes.



Other Regulatory Agencies


Team

Member


Reasonable

Regulations &

Taxes



processes.





Agencies

Regional Economic Development Organizations



Add Value







Regional Economic


I-PEP, IDALS, Rural


Team

Leader

Secondary Strategies, Recommendations and Actions

Organized by Who is Responsible


Congress


Team

Leader


Improved

Transportation

Infrastructure

Plan for projected increases in Iowa

crop and livestock production, food

and fuel processing and

manufacturing, and resultant truck

traffic increases.

Assure adequate maintenance and rebuilding,

when necessary, of interstate highways.Congress

Iowa Legislature, IDOT, Ag

& Commodity

Organizations

Business

Environment

Assure broadband transmission is

available to Iowa communities for use

by agriculture businesses, processing

businesses, input providers and

assure the integrity of satellite

transmissions to GPS receivers.


Universal Services Fund (USF) by shifting funds

away from landlines to broadband services,

encouraging investment in broadband to all of

Iowa and emphasizing rural areas. Continually

monitor information technology needs and early

access to keep Iowa ‘ahead of the pack’.

CongressIowa Governor, Innovation

Council

Congress


Team

Member


Influence Congress to appropriate

funding for lock expansion projects on

the Upper Mississippi and Illinois

rivers authorized in the 2007 Water

Resources Development Act.



delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa

Secretary of Ag, IDOT, Ag

& Commodity

Organizations, Ag

Producers






Support the increase of the lock and dam system

on the Upper Mississippi River Basin, the

improvement/replacement of locks and dams, and

the modification and expansion of other structures

and facilities that increase transportation

efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers

Assure adequate freight rail line

capacity, access and provider

options to serve agricultural

production and processed product

rail needs.

Encourage adequate financial resources be

employed, when necessary, for the development

of viable inter and intra-state railroads.

IDOT

Iowa Governor, Iowa

Secretary of Ag, Ag &


Businesses, Congress

Business

Environment








mobile satellite spectrum for wireless

communications that would compromise the

current use of the spectrum or limit increased use

for ag production and business.

Ag & Commodity

Organizations


of Ag, Businesses, Ag

Producers

Improved

Transportation

Infrastructure

Iowa Governor


Team

Leader




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers

Provide leadership, through Governor Branstad,

to Midwest governors and US Senators to derive

adequate funding.

Iowa Governor






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers

Join other affected states to bring pressure to

bear on policy makers and the US Army Corps of

Engineers to prioritize flood control and

commercial use of the river.

Iowa Governor

Oppose changes to Army Corps of Engineers

river operations that lead to reduced navigation,

reduced flood control measures or spring rises.

Iowa Governor

Iowa Legislature, Iowa


& Commodity

Organizations, Ag

Producers






Assure that the Missouri River is

maintained as viable option for

commercial movement of western

Iowa commodities and related

products into the extensive US inland

waterway system and global

markets.

Improved

Transportation

Infrastructure

Iowa Governor


Team

Leader


Business

Environment

Convince Iowa businesses and those

considering locating or investing here

that Iowa is “Open for Business” and

is ready to help resolve problems or



agricultural research, production, and processing.Iowa Governor

I-PEP, Iowa Secretary of

Ag, IDALS

Innovation

Reputation

Encourage and support

entrepreneurism.

Attract investment capital by positioning Iowa as

the “Bio-Capital” of North America through

progressive state-backed programs, developed in

conjunction with private industry.

Iowa Governor, I-PEPAg & Commodity


Iowa Governor


Team

Leader


Embrace production agriculture as an Iowa

tradition, strength and base for future growth.Iowa Governor


Secretary of Ag, IDALS, I-

PEP, IDNR, IDOT, ISU,

Other Universities,

Community Colleges, Ag &



Counties/Communities,

Businesses, Ag Producers,

Media, Innovation Council,

Lenders, Coalition to

Support Farmers

Use campaign as a method of drawing attention

to Iowa’s assets.Iowa Governor


PEP

Actively recruit bio processing and bio businesses

to the state.Iowa Governor


PEP


which Iowa has already invested and that are

poised to support the development of bio-based


Iowa Governor


PEP, ISU, Other

Universities, Board of

RegentsLead the transition to a bio knowledge economy:

one that replaces low profit manufacturing with

science-based, higher profit, innovation-based

businesses.

Iowa GovernorIowa Secretary of Ag, I-

PEP, Innovation Council

Invite business leaders for ‘reverse trade

missions’ to Iowa communities that are ready for

and eager to site bio based businesses.

Iowa Governor


PEP, Rural


BusinessesAchieve effective collaboration

between agriculture and related

sectors by encouraging formation of

an organization or system that

becomes a foundation for

cooperation and issue prioritization

across Iowa’s diverse agriculture

sector.




agriculture in Iowa, its impact on the state’s

economy and crucial, current issues affecting the


Iowa Governor, new

organization or system


IDALS, I-PEP, Ag &



Innovation Council

Lead campaign to increase the size

and scope of Iowa agriculture.

Leadership

Iowa Governor


Team

Member


Improved

Transportation

Infrastructure





rail needs.




IDOT

Iowa Governor, Iowa





government-based or private sector, that provides

one-on-one specific assistance to both

established Iowa businesses and those

considering locating in Iowa as they navigate



Provide a flexible, responsive business,

government and social environment where

currently unimagined value-added businesses may

establish and flourish.

I-PEP

Iowa Governor, Iowa

Legislature, IDALS, IDNR,

Rural


Businesses

Change Iowa’s property tax structure to create

equity among broadband providers and encourage

investment in broadband to all of Iowa,

emphasizing rural areas.

Iowa LegislatureIowa Governor, I-PEP,

Innovation Council









Council

Business

Environment












Iowa Governor


Team

Member


Build Iowa’s reputation as a hotbed of innovation. Innovation CouncilIowa Governor, I-PEP,

Businesses, Media

Support growth of innovative businesses and

activities already rooted in Iowa.I-PEP Iowa Governor

Recruit innovative businesses, particularly those in

the agriculture sector.I-PEP

Iowa Governor, Ag &




regulations that stifle or slow adoption and

utilization of technologies. Avoid passage of such


Iowa LegislatureIowa Governor, IDALS, I-

PEP, IDNR

Sponsor a competition and significant award for

best annual innovation that benefits Iowa’s

agriculture, agri business, food processing, bio

fuel sectors or other, related sectors.

Innovation CouncilIowa Governor, Iowa

Secretary of Ag


processing conferences that bring the most

innovative businesses to the state.


Iowa Governor, Ag &


Businesses, Innovation

Council

Establish Iowa as a leader in the development of

food safety technologies, systems and businesses

that will serve the growing global demand for safe

food supplies .

ISU

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag,

Businesses

Create a climate for innovation in

agriculture, food, fiber,

f(ph)armaceutical and renewable fuel

businesses, and in the supporting

sciences.

Innovation

Reputation

Iowa Governor


Team

Member


LeadershipLead campaign to increase the size



innovative technologies to create clean sought-

after jobs and economic activity.

Businesses

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag, I-PEP,

ISU, Ag & Commodity

Organizations, Ag

Producers

Iowa Legislators


Team

Leader


Improved

Transportation

Infrastructure





traffic increases.

Increase funding for rural roads and bridges via

an agreed revenue stream.

Iowa Legislature, Ag &


Ag Producers, Rural


Business

Environment












Innovation Council

Innovation

Reputation





sciences.






PEP, IDNR

Iowa Legislators


Team

Member




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers







markets.




Iowa Governor



& Commodity

Organizations, Ag

Producers




& Commodity

Organizations


necessary capacity, and assure its

implementation before it is needed.











traffic increases.

Improved

Transportation

Infrastructure

Iowa Legislators


Team

Member


Business

Environment










I-PEP

Iowa Governor, Iowa


Rural


Businesses

Innovation

Reputation





sciences.




food supplies .

ISU

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag,

Businesses

Nurture the New

Provide an environment in which non-

traditional ideas, farming operations

and businesses may establish a

foothold and grow.


processing in government, university and

organization programs.

IDALS, ISU



Other Universities,

Community Colleges






Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers


and scope of Iowa agriculture.Leadership



Team

Leader


Innovation

Reputation





sciences.





Iowa Governor, Ag &



Council

Nurture the New

Assist ‘new to Iowa’ production and

processing in their efforts to access

investment capital.



Leadership

Achieve effective collaboration







sector.


Minnesota Agri Growth Council, and gain

consensus on the best way to provide unified

support for the factors that will "Increase the Size

and Scope of Iowa Agriculture".


IDALS, ISU, Ag &




Farmers



Team

Member




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers




Iowa Governor



& Commodity

Organizations, Ag

Producers




IDOT

Iowa Governor, Iowa




Improved

Transportation

Infrastructure












markets.



Team

Member










Ag, IDALS






Ag & Commodity

Organizations



Producers



sensors and GPS positioning for production


Ag & Commodity

Organizations



Business

Environment Assure broadband transmission is








Team

Member




Iowa Governor, Ag &








Secretary of Ag




Ag & Commodity

Organizations






food supplies .

ISU

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag,

Businesses




foothold and grow.




IDALS, ISU



Other Universities,

Community Colleges

Review the needs of new, innovative

agriculture production and processing

and prioritize efforts to help with

those needs.


forum where non-traditional producers and

processors may network and share concerns,

seek solutions.

ISU



Organizations

Innovation

Reputation





sciences.

Nurture the New



Team

Member







Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers




PEP




PEP





Iowa Governor


PEP, ISU, Other


Regents

Lead the transition to a bio knowledge economy:



businesses.






Iowa Governor


PEP, Rural


Businesses








sector.







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council

Leadership





Team

Leader


Nurture the New




foothold and grow.




IDALS, ISU



Other Universities,

Community Colleges



Team

Member






I-PEP

Iowa Governor, Iowa


Rural


Businesses




Ag, IDALS

Innovation

Reputation





sciences.






PEP, IDNR




new organization or systemIDALS, Coalition to Support

Farmers

Facilitate transfer of beneficial techniques,

information and systems that are developed by

non-traditional producers and processors that can

be adapted and adopted by traditional producers

and processors.

ISU


Organizations, Ag

Producers




those needs.




seek solutions.

ISU



Organizations

Nurture the New




foothold and grow.

Business

Environment








Team

Member









Other Universities,








Support Farmers







IDALS, ISU, Ag &




Farmers







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council

Leadership








sector.



Team

Leader













I-PEP

Iowa Governor, Iowa


Rural


Businesses

Support growth of innovative businesses and

activities already rooted in Iowa.I-PEP Iowa Governor



Iowa Governor, Ag &



Identify, develop and create an entrepreneurial

talent pool that is coordinated across the state,

interacts with various regional organizations and is

committed to entrepreneurial development within

the state of Iowa.

I-PEPAg & Commodity
















sciences.


entrepreneurism.



investment capital.

Business

Environment

Innovation

Reputation

Nurture the New








Team

Member


Workforce

Educate, recruit, attract and retain a

workforce with knowledge of and

passion about production agriculture,

processing and the businesses that

serve agriculture and processing.

Achieve adequate levels of applicants for ag

production and processing jobs by developing a

program to recruit legal immigrants who want to

work in ag production and ag/food processing

sectors – attract the ’cream of the crop’ to Iowa.

Ag & Commodity

Organizations, BusinessesI-PEP, Ag Producers









Ag, IDALS












Innovation Council


Businesses, Media






PEP, IDNR




foothold and grow.




IDALS, ISU



Other Universities,

Community Colleges



investment capital.







sciences.

Business

Environment

Innovation

Reputation

Nurture the New



Team

Member







Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers




PEP




PEP





Iowa Governor


PEP, ISU, Other


Regents




businesses.






Iowa Governor


PEP, Rural


Businesses








sector.







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council



Leadership



Team

Member


Business

Environment










I-PEP

Iowa Governor, Iowa


Rural


Businesses

Innovation

Reputation





sciences.






PEP, IDNR








Other Universities,








Support Farmers

Iowa Department of Transportation


Team

Leader






traffic increases.


necessary capacity, and assure its

implementation before it is needed.





IDOT

Iowa Governor, Iowa




Identify strategic agricultural rail routes and

collaborate with inter-state rail companies to

maintain and develop lines to support value-added

agricultural business opportunities.

IDOT, BusinessesAg & Commodity

Organizations

Improved

Transportation

InfrastructureAssure adequate freight rail line




rail needs.

Iowa Department of Transportation


Team

Member




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers







markets.




Iowa Governor



& Commodity

Organizations, Ag

Producers





traffic increases.




& Commodity

Organizations





rail needs.


cost-effective connections to access export

growth markets via Pacific Northwest ports.

Sustain already established rail routes to national

and export markets.

Ag & Commodity

Organizations, BusinessesIDOT








Other Universities,








Support Farmers

Improved

Transportation

Infrastructure






Iowa Department of Education


Team

Member


Workforce






Coordinate community colleges’ training,

statewide, for both agriculture production and

processing.

Community Colleges IDE



Team

Leader


Build and provide education and training programs

that are relevant, efficiently managed and focused

on future needs, such as food safety tech, food

processing, biofuel engineering and fermentation

manufacturing, etc.

ISUOther Universities,

Community Colleges

Provide extension programming, applied research

and undergraduate curriculum to support new

opportunities in agriculture, such as production for

niche markets and bio-energy production.

ISU

Innovation

Reputation





sciences.




food supplies .

ISU

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag,

Businesses




IDALS, ISU



Other Universities,

Community Colleges





and processors.

ISU


Organizations, Ag

Producers




seek solutions.

ISU



Organizations

Focus ISU extension service work on helping start-

ups, especially those growing non-traditional

crops or accessing their market in new ways.

ISU









foothold and grow.




those needs.

Workforce

Nurture the New



Team

Leader


Develop and implement professional production

and processing certificate programs.ISU




Provide professional development programs that

keep Iowa farmers and businesses ahead of their

competition.

ISU









Workforce



Team

Member


Innovation

Reputation


entrepreneurism.

Develop business talent by working with

experienced entrepreneurial groups and

universities, develop entrepreneurial programs

and reality based curriculums utilizing a synergistic

pool of academia, entrepreneurs and








Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers





Iowa Governor


PEP, ISU, Other


Regents








sector.







IDALS, ISU, Ag &




Farmers

Leadership



Other Universities


Team

Member


Workforce










manufacturing, etc.


Community Colleges

Innovation

Reputation


entrepreneurism.








Nurture the New




foothold and grow.




IDALS, ISU



Other Universities,

Community Colleges






Other Universities,








Support Farmers





Iowa Governor


PEP, ISU, Other


Regents



Community Colleges


Team

Leader


Workforce






Coordinate community colleges’ training,

statewide, for both agriculture production and

processing.

Community Colleges IDE

Community Colleges


Team

Member






manufacturing, etc.


Community Colleges








competition.

ISU







foothold and grow.




IDALS, ISU



Other Universities,

Community Colleges



investment capital.










Other Universities,








Support Farmers

Nurture the New

Workforce








Team

Leader






traffic increases.





Ag Producers, Rural






rail needs.





and export markets.

Ag & Commodity


Workforce











Ag & Commodity


Support the new Iowa Partnership for

Economic Progress (I-PEP)and its

public-private approach to economic

development. Assure the new system

is supportive of a bio based economy


Ag & Commodity

Organizations









Ag & Commodity

Organizations



Producers





Ag & Commodity

Organizations



Innovation

Reputation





sciences.




Ag & Commodity

Organizations









Improved

Transportation

Infrastructure

Business

Environment



Team

Member




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers







markets.




Iowa Governor



& Commodity

Organizations, Ag

Producers

Encourage each Iowa county to maintain

necessary farm-to-market roads and to close

roads and bridges that are no longer essential.

Ag Producers

Ag & Commodity






& Commodity

Organizations




IDOT

Iowa Governor, Iowa









Organizations










traffic increases.





rail needs.

Improved

Transportation

Infrastructure



Team

Member


Workforce






Support Iowa STEM initiative and provide

biosciences expertise for program development.Businesses

Ag & Commodity

Organizations



Iowa Governor, Ag &







Iowa Governor, Ag &



Council





the state of Iowa.

I-PEPAg & Commodity











foothold and grow.





and processors.

ISU


Organizations, Ag

Producers




those needs.




seek solutions.

ISU



Organizations

Innovation

Reputation





sciences.


entrepreneurism.

Nurture the New



Team

Member







Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers







IDALS, ISU, Ag &




Farmers


consistent, prioritized advice for government and

other public sector institutions as they work to

"Increase the Size and Scope of Iowa

Agriculture".

new organization or system

Ag & Commodity


Ag Producers







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council










sector.

Leadership



Team

Member









competition.

ISU









Workforce

Other Organizations


Team

Member


Business

Environment







Ag & Commodity

Organizations











Other Universities,








Support Farmers

Rural Counties & Communities


Team

Member





Ag Producers

Ag & Commodity







Ag Producers, Rural











I-PEP

Iowa Governor, Iowa


Rural


Businesses







Ag & Commodity

Organizations









Other Universities,








Support Farmers




Iowa Governor


PEP, Rural


Businesses

Business

Environment



Improved

Transportation

Infrastructure





traffic increases.

Businesses


Team

Leader







Organizations





and export markets.

Ag & Commodity


Support Iowa STEM initiative and provide

biosciences expertise for program development.Businesses

Ag & Commodity

Organizations






Ag & Commodity


Workforce






Improved

Transportation

Infrastructure





rail needs.

Businesses


Team

Leader


Link mentorship to investment. Businesses

Identify and recruit management with

entrepreneurial or start-up experience and match

business organizational needs with commercial

management expertise.

Businesses








Nurture the New




foothold and grow.

Encourage producers to raise differentiated crops

that are grown for specific traits and contracted

directly by the customer to limit risk.

Businesses






Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers

Innovation

Reputation


entrepreneurism.

Businesses


Team

Member


Improved

Transportation

Infrastructure





rail needs.




IDOT

Iowa Governor, Iowa















I-PEP

Iowa Governor, Iowa


Rural


Businesses







Ag & Commodity

Organizations









Ag & Commodity

Organizations



Producers





Ag & Commodity

Organizations



Business

Environment












Businesses


Team

Member



Businesses, Media





Iowa Governor, Ag &



Council




Ag & Commodity

Organizations






food supplies .

ISU

Iowa Governor, Iowa

Legislature, Iowa

Secretary of Ag,

Businesses





the state of Iowa.

I-PEPAg & Commodity












Innovation

Reputation





sciences.


entrepreneurism.

Nurture the New



investment capital.

Businesses


Team

Member







Other Universities,








Support Farmers




Iowa Governor


PEP, Rural


Businesses







IDALS, ISU, Ag &




Farmers





Agriculture".


Ag & Commodity


Ag Producers







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council

Leadership










sector.

Businesses


Team

Member









competition.

ISU




Workforce








Team

Leader


Improved

Transportation

Infrastructure





traffic increases.




Ag Producers

Ag & Commodity





Team

Member




delegation.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers






efficiency.

Iowa Governor

Congress, Iowa

Legislature, Iowa


& Commodity

Organizations, Ag

Producers







markets.




Iowa Governor



& Commodity

Organizations, Ag

Producers





traffic increases.





Ag Producers, Rural


Workforce











Ag & Commodity


Improved

Transportation

Infrastructure








Team

Member








Ag & Commodity

Organizations









Ag & Commodity

Organizations



Producers





Ag & Commodity

Organizations



Innovation

Reputation





sciences.




Ag & Commodity

Organizations



Nurture the New




foothold and grow.





and processors.

ISU


Organizations, Ag

Producers

Business

EnvironmentAssure broadband transmission is








Team

Member







Other Universities,








Support Farmers




Businesses

Iowa Governor, Iowa

Legislature, Iowa


ISU, Ag & Commodity

Organizations, Ag

Producers







IDALS, ISU, Ag &




Farmers





Agriculture".


Ag & Commodity


Ag Producers







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council








sector.

Leadership





Team

Member









competition.

ISU









Workforce

Board of Regents


Team

Member








Iowa Governor


PEP, ISU, Other


Regents

Media


Team

Member


Innovation

Reputation





sciences.


Businesses, Media








Other Universities,








Support Farmers

Innovation Council


Team

Leader



Businesses, Media






Secretary of Ag





sciences.

Innovation

Reputation

Innovation Council


Team

Member







Innovation Council









Council

Innovation

Reputation





sciences.





Iowa Governor, Ag &



Council

Business

Environment







Innovation Council


Team

Member







Other Universities,








Support Farmers




businesses.










sector.







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council

Leadership



Lenders


Team

Member









Other Universities,








Support Farmers



Team

Member


Nurture the New




foothold and grow.





Farmers








Other Universities,








Support Farmers








sector.







IDALS, ISU, Ag &




Farmers

Leadership

New Organization or System



Nurture the New




foothold and grow.





Farmers





Agriculture".


Ag & Commodity


Ag Producers







Iowa Governor, new



IDALS, I-PEP, Ag &



Innovation Council

Leadership








sector.

Team

Leader

Local Production Advocacy Groups



Nurture the New




foothold and grow.

Encourage institutions to incorporate local

production into their food service menus.

Local production advocacy

groups

Team

Leader

Appendix D


Resources




Source: Image of Proposed Organizational Structure of Iowa Partnership for Economic Progress

https://www.pdiowa.com/upload/8a23fipep_structure_3182011_wduties.pdf

Report - References

• Soil Survey & Digital Soil Maps, ISU http://extension.agron.iastate.edu/soils/SSDS_maps.html

• Soil Quality, Better Lawns Made Easy


• ISU researcher: Iowa has lower-quality topsoil than 50 years ago, Jessica Veenstra, Agronomy, ISU


• Iowa Geology 1995, Iowa Department of Natural Resources http://www.igsb.uiowa.edu/Browse/satelite/satelite.htm

• The impact of regulatory costs on small firms, Nicole V. Crain and W. Mark Crain, Lafayette College, 2010


• A Report on Agricultural Productivity and Agricultural Research, National Agricultural Research, Extension, Education and

Economics Advisory Board, 2011


• The Role of Basic Research in Innovation, Magnus Gulbrandsen


• 2011 Iowa STEM Education Roadmap http://www.iowastem.org/assets/roadmap.pdf

• Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat

• USDA, Economic Research Service using in the World Trade Organization Regional Trade Agreements database

http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx (slide 109)

• http://www.agweb.com/livestock/

• Exporter Data Base, ITA, Bureau of Census

• Ethanol 2020 – Global Market Survey, Next Generation Trends, and Forecast, Multi-Client Study, Emerging Markets Online,

2008 http://www.emerging-markets.com/ethanol2020/Ethanol2020_GlobalSurvey_Contents.pdf

• U.S. Bureau of Economic Analysis, 2009 and Iowa Workforce Development, 2010

• Cluster Manufacturing: A Supply Chain Perspective, Cognizant http://www.cognizant.com/InsightsWhitepapers/Cluster-

Manuf.pdf558 | Context | Iowa AgriScope 2030




http://www.igsb.uiowa.edu/Browse/satelite/satelite.htm




http://www.iowastem.org/assets/roadmap.pdf

http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx

http://www.agweb.com/livestock/

http://www.emerging-markets.com/ethanol2020/Ethanol2020_GlobalSurvey_Contents.pdf

http://www.cognizant.com/InsightsWhitepapers/Cluster-Manuf.pdf

Report - References

• Rivers Project, US Army Corps of Engineers http://www.mvs.usace.army.mil/rivers/locks-dams.html (slide 114)

• USDA http://2.bp.blogspot.com/-

NvNHHnraSv8/TgQUS15BVqI/AAAAAAAAAe8/tn_2Qi3FJOM/s1600/USDA+Photo+of+Missouri+River+Flooding+2011.jpg

• Iowa population shift from rural to urban, USA Today | Census, 2011 http://www.usatoday.com/news/nation/census/profile/IA

• infrastructurist.com http://www.infrastructurist.com/wp-content/uploads/3194744389_4a62759d8c-300x199.jpg

• Wells http://www.wellsenterprisesinc.com/Default.aspx

• Becker Underwood website http://www.beckerunderwood.com/

• Niman Ranch website http://www.nimanranch.com/Index.aspx

• Iowa Local Food and Farm Plan, Leopold Center for Sustainable Agriculture, 2011


• Life Cycle Assessment of Commodity and Niche Swine Production Systems, ISU Leopold Center, 2010

http://www.leopold.iastate.edu/sites/default/files/pubs-and-papers/2010-09-life-cycle-assessment-commodity-and-niche-swine-

production-systems.pdf

• Hog Buildings : http://www.hoksdsconst.com/our_work.html

• The Impact of Regulatory Costs on Small Firms, US Commerce Department

• Iowa ranks 45th in the Tax Foundation‘s 2011 State Business Tax Climate Index, Tax Foundation


• Iowa Department of Economic Development

• Chad Hart, ISU, Assistant Professor Economics, Extension Economist, Grain Market Specialist


http://www.mvs.usace.army.mil/rivers/locks-dams.html

http://2.bp.blogspot.com/-NvNHHnraSv8/TgQUS15BVqI/AAAAAAAAAe8/tn_2Qi3FJOM/s1600/USDA+Photo+of+Missouri+River+Flooding+2011.jpg

http://www.usatoday.com/news/nation/census/profile/IA

http://www.infrastructurist.com/wp-content/uploads/3194744389_4a62759d8c-300x199.jpg

http://www.wellsenterprisesinc.com/Default.aspx

http://www.beckerunderwood.com/

http://www.nimanranch.com/Index.aspx


http://www.leopold.iastate.edu/sites/default/files/pubs-and-papers/2010-09-life-cycle-assessment-commodity-and-niche-swine-production-systems.pdf

http://www.hoksdsconst.com/our_work.html


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