Iowa State University labor economist Peter Orazem said he isn’t worried about the latest national report showing Iowa dead last in the country in terms of personal income growth. And Greater Des Moines business leaders shouldn’t worry, either.

Orazem shed some perspective and context on a new report from the U.S. Commerce Department’s Bureau of Economic Analysis, which put Iowans in last place in terms of their personal income growth, compared with the rest of the nation. The report covered the last quarter of 2014 to the first quarter of 2015, and showed the state as having a 1.2 percent loss in personal income, compared with an average 0.9 percent gain for the rest of the nation.

“Outside of agriculture and one or two sectors, Iowa is doing fine,” he said. “Real estate and finance are doing great.”

Orazem said Iowa only grew 0.4 percent in the last year but has averaged 2.1 percent per year since 2000. And Iowa agriculture has grown an average of 9 percent a year since 2000, despite the decrease in value of production this past year.

“If you were a farmer, you had a few great years in there, and that’s not going to be the same, at least for the next couple of years,” he said. 

The numbers reflect the normalizing of an agriculture market boom. The boom took Iowa land prices back to what they were in 1979, rather than the farm crisis-accompanying collapse of ag land values that Iowa experienced for much of the early 1980s.

Put in context of the past decade, “We’ve actually been climbing relative to the rest of the U.S., but you can’t maintain that forever,” Orazem said. “We actually had a 10-year period where we actually were doing well, and now the rest of the U.S. is catching up to us.”

To Orazem, the drop in ag-sector personal incomes represents a normalizing of farm-related incomes after a relatively long boom because of high commodity prices and high ag land values. 

“Really high prices in corn and soy —  the result of a combination support for corn-based fuels and a weak harvest — drove up food prices internationally for quite a while,” he said.

The report attributed a decline in farm incomes to a weaker livestock prices, which Orazem acknowledged puzzled him. Commodity prices were down, so those costs should have dropped for livestock farmers, he said. 

And the reporting period is too early to reflect the economic impact of the avian flu, which continues to take a financial toll in Iowa. As of mid-May, more than 25 million birds — mostly chickens and turkeys — had been infected and destroyed.

In contrast to the quarterly report on personal income growth, Orazem pointed to real gross domestic product growth for the state last year: “2013-2014 was a flat economy for Iowa, but that’s going to reflect the reductions in agriculture — counteracting the growth elsewhere.”

Growth in Iowa’s sectors of construction, finance and insurance, real estate, and health care “are counteracting a rather large giveback in agriculture,” he said.