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Summit highlights importance of ag

By Staff | Feb 21, 2012

Dennis Plautz, chief executive officer for the Greater Fort Dodge Growth Alliance, explains how tax incentives extended to Cargill will be used so the company will begin operations in the North Central Ag Industry Park, on the west edge of Fort Dodge.

By LARRY

KERSHNER

For The Messenger

State Rep. Helen Miller, D-Fort Dodge, told a room of 40 listeners on Feb. 18 that most Iowans are unaware of agriculture’s impact on the state’s economy.

“People need to understand,” Miller said at an ag summit at the Webster County Extension office, “the reason Iowa did well (during the recession) is due to its agriculture economy.”

Brent Bunte, general manager of NEW Cooperative, in Fort Dodge, discusses how the increased grain yields and prices have changed the business of cooperatives.

Miller’s comments opened a three-hour gathering she called an ag summit, designed to help community leaders understand the importance of farming, farm products and processing on daily living, even in urban areas.

“One in seven jobs in Iowa and one in 12 nationwide are tied to agriculture,” Miller said.

Jim Patton, former Region 7 executive director for Extension, including Webster County, hosted the meeting, saying many in the room “who are influential leaders in your own fields.”

Miller, who serves as the ranking minority leader in the House ag committee in Des Moines, pointed to the ag trade agreements signed earlier this week between Iowa and China.

“People don’t have a clue as to how big this is, not only for Iowa (grain growers), but also for livestock.

“There is a huge opportunity for this state. People who are not in agriculture have got to understand that it’s not the insurance industry that drives Iowa, it’s agriculture.”

Earlier this month, Miller hosted the first-ever Urban-Ag Academy at the Iowa House, drawing together producers, educators, legislators, and leaders of Iowa’s agricultural sector. Legislators, farmers and producers expressed great enthusiasm for learning from each other, she said. Programs like this, and another last November hosted by the Iowa Soybean Association for Iowa lawmakers was to focus on ag importance with the view that as minority populations and non-farming populations grow the need exists to tell agriculture’s story and dispel the misinformation about farming practices.

“The reason we are doing this,” Miller said of Saturday’s meeting, “is there are fewer and fewer voices for rural Iowa and agriculture in particular.

“It’s important for people to understand what we do, how we do it and why we do it.”

Speakers for the three-hour event included Dr. John Lawrence, director of ISU Agriculture and Natural Resources Extension’s; Brent Bunte, general manager for NEW Cooperative; Dennis Plautz, chief executive officer for Greater Fort Dodge Growth Alliance; Joe Horan, Manson-area farmer, city councilman and member of director board for Goldfield Corn LP Ethanol; Elizabeth Conley, representing Clean Lines Partners LLC.; and Keith Dencklau, Webster County supervisor.

Patton told the audience that Iowa produces 15.5 percent of the nation’s corn and soybean production, with just 13.5 percent of the tillable acres. “We are the leaders,” Patton said. “And this region is one of the leaders in Iowa. That’s why it’s important to focus on something like this.”

Impact of ag economy

Lawrence discussed specific economic impacts that agriculture has in rural and urban communities. These include:

  • More than $30 billion in farm receipts in 2011. Compared to 2007, corn value is up 70 percent and soybeans are up 60 percent. “That’s $10 billion more than just a few years ago, turning over in your neighborhoods,” Lawrence said.
  • It’s estimated one-fifth of Iowa’s economy is dependent on agriculture.
  • Manufacturing is the largest official segment, but it includes ag processing and ag inputs that wouldn’t exist without farms. “I doubt we would have built those ethanol plants, if agriculture wasn’t here,” he said.
  • Ag-related manufacturing constitutes 12.4 percent of Iowa’s gross domestic product, while non-ag-related manufacturing is 14.1 percent of the GDP. “If you got rid of agriculture,” You’d lose almost half of your manufacturing,” Lawrence said.

Agriculture has the ability to multiply dollars circulating in the economy including:

  • For every $1 in ag product sales, there are 66 cents that turns over in the economy.
  • For every $1 in farm labor income, 80 cents is turned over spent on living costs, entertainment and consumer purchases. However, for every $1 in ag-related manufacturing income, $3.25 is generated in the economy; while the same dollar in non-ag manufacturing generates $1.86.
  • For each job created on the farm, an additional job is created off the farm. For each job in ag-related manufacturing, 4.39 jobs are created elsewhere; while non-ag manufacturing jobs generate 2.36 jobs.

When asked about a general ignorance about where their food comes from, Lawrence said, “that’s not the danger.

“The real danger is they are asking where their food is coming from, and they don’t like what they are seeing.” The biggest change in food policy is that change used to come through legislation, he said, but now policy is set by major food chains drawing negative press. Policies change without research and without a science basis.

Cooperatives cooperate

Brent Bunte, said farm co-ops, such as NEW Cooperative, which has 21 locations in Iowa, including one in Fort Dodge, assists ag producers by buying and marketing their grain and obtaining the crop inputs for its members.

“This is the golden age for ag,” Bunte said. Young people are enthusiastic about returning to agriculture, he said, in fact, “we have to get (ag graduates) early out of college, or we won’t get them.”

Bunte said the business of cooperatives have changed in the past decade. There are nine ethanol plants in NEW Co-op’s trade area which has increased corn demand, “more than doubling grain prices,” he said.

As row crop yields have increased, the management of land has also changed. He said NEW’s agronomy services to its members has doubled in four years. “There’s been a big shift from the traditional 50-50 corn-soybean rotations, to 65 percent corn and 35 percent soybeans. He expects that rotation to change to 80-20, corn over soybeans.

That translates into more soil sampling, more variable nutrient applications fall fungicide applications and more interest in micronutrients

In order to meet the growing yield challenges, Bunte said NEW has spent $90 million in capitol improvements – two-thirds spent on more storage, and faster loading and unloading, so producers avoid long waits to unload corn during harvest.

He said as yield continue to grow, improving Iowa’s infrastructure will become more acute.

Ag industry park

Plautz outlined the development of the North Central Ag Industrial Park on the west edge of Fort Dodge. Valero has an ethanol plant here, plus Cargill is refurbishing the former Tate & Lyle wet-milling plant, creating 132 jobs; and a South Korea company, CJ America, will build as a co-located business with Cargill, creating an additional 180 jobs..

“In the next 18 months,” Plautz said, “there will be $500 million in development out there. “This is the largest opportunity we’ve ever had to change our economy and add value to our products.” He said an estimated one-sixth of that development money spent will be to contractors with Webster County addresses.

Cargill is set to grind 150,000 bushels of corn daily, equal to 3,000 acres of production. Combined with POET and Valero, Plautz said, the annual consumption of corn will equal the yield of a million acres, and that does not include the grain elevators who mill corn into livestock feed.

He said the anticipation is an additional $10.5 million will be spent in cash corn and contracts “that will be spent in your communities.”

Manson’s Joe Horan said Manson is preparing to build a service road to a subdivision north of that city that can build 22 houses. Manson is preparing to handle some of the influx of employees for the Cargill and CJ America plants.

Clean Lines

Conley outlined the project of Clean Lines Partners LLC., based in Houston, Texas, to create a 500-mile high-voltage, direct-current transmission line from O’Brien County to electric consumers in Illinois and several other eastern states. The line will have the capacity to transmit up to 3,500 megawatts of power, which would come from an anticipated growth of potentially 2,000 wind turbines in northwest Iowa, northeast Nebraska and southeast South Dakota.

The project would broaden the tax base for local government entities, Conley said, paying $7,000 per mile the line travels through any taxing entity.

The line will carry enough electricity to power 1.4 million homes annually, she said.

The proposed line could trek through the northern tier of Webster County townships. But the exact route has yet to be announced.

Contact Larry Kershner at (515) 573-2141 or kersh@farm-news.com

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