Trickle down ag economics

Whether a person works for a rural construction business or at a multinational chemical company, the financial effect of agriculture is felt beyond the farmgate.

This week I am in Iowa, one of the most traditionally rural states in the United States. It is characterized by its farms, and well it should be, with 93,000 farms on about 30 million acres.

However, just like in Canada, the number of farms is often misleading because it all depends on your definition of a farm.

For example, Saskatchewan has about 40,000 farms, based on similar definitions used to come up with the Iowa number, but the Sask-atchewan number drops to about 18,000 producers when it is limited to commercial-sized operators.

I rented a car in Des Moines, Iowa’s largest city, and the friendly rental clerk, Sharon, asked me why I came all the way to Iowa from Saskatchewan. I told her it was to meet with John Deere, one of the state’s largest employers.

She asked if I was in agriculture, and I assured her that I was, al-though I didn’t elaborate on what I do for a living. She asked me if what I do is good for farmers. I said that I like to think it makes them more money. She asked if what I do is good for John Deere. I said that I like to think that it is.

“Good,” said Sharon.

I asked if her family farmed.

She said, “No, but my husband works for Firestone-Bridgestone. He makes tires. And John Deere is buying fewer tires these days because farmers have stopped buying as much farm equipment. So, please, go and make farmers more money so my husband and I and our two kids can go back to having a regular income.”

There was no sound of complaint in her voice, but she made a good point: agriculture feeds the world in more ways than food production.

If a farmer in Saskatchewan nets $45 per acre from grain and oilseeds, which is common, the rest of the $200 to $450 per acre gross income goes into the pockets of other folks.

Some are investors in large companies, some are local input suppliers carpenters and landowners and some build tires in Iowa. Some are even journalists.

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