It’s been a challenging year for the agricultural and manufacturing economies in Iowa, although there are bright spots. The effects of lowered row-crop profitability and trade challenges are being felt across business sectors in the state. Meanwhile, a legacy Iowa-based manufacturer is seeing profits in new sectors, as artificial intelligence and data centers continue to demand more infrastructure.

These are some of the perspectives shared by Christopher Pudenz, economics and research manager for Iowa Farm Bureau, and Jason Andringa, president and CEO of Vermeer, in the third episode of the Iowa Economy Podcast, hosted by BPC President and Business Record Publisher Chris Conetzkey on Nov. 6.

Economist’s snapshot: Iowa’s agricultural markets 

Pudenz, an expert in agricultural economics, was a panelist at the Business Record’s Economic Forecast event in January, where he said, “When agriculture sneezes, the rest of Iowa catches a cold,” referring to the significant impact of agriculture on other business sectors throughout the state. During the podcast, he said economic factors have put a chilling effect on agricultural manufacturing.

 “One of the areas of the economy that has caught a cold is ag manufacturing. Much of the ag manufacturing in the state produces things that are used for row-crop production agricultural economy: combines, planters, things like that. So as farmers have pulled back their purchases of those implements, that has led to layoffs in that ag manufacturing sector,” he said. “As the farm economy slows, as those producers face struggles, they spend less money on things in their local towns. They spend less money on Main Street. They spend less money at the implement dealer that’s selling agricultural equipment. They spend less money at Iowa State University football games. There is just this general pullback in throughput, in the Iowa economy, when farmers are feeling a pinch in their pocketbooks. Because agriculture is so foundational to the state economy, those ripple effects get big and they magnify throughout the rest of the state.”

The lag in ag manufacturing has resulted in 5,900 layoffs in that sector during the past few years, he said. 

High-cost inputs mixed with low output prices areputting pressure on farmers. While many had hoped for higher corn prices over the summer to help level out costs, that didn’t materialize, he said.  

“The skinny of it is that the row-crop economy here in the state of Iowa is struggling for the second year in a row. It’s a combination of being in a high-cost environment with low prices,” Pudenz said. “Corn and soybean prices are substantially lower than they have been, even as recently as three or four years ago. That has put substantial margin pressure on many of the row-crop producers here in the state. After all, Iowa is the No. 1 producer of corn in the country and the No. 2 of soybeans.”

As a top exporter of row crops and a state that exports 30% of its pork production annually, shifts in trade policies have implications for Iowa farmers’ bottom line. 

“Trade continues to be a frustrating thing for many folks in agriculture. For nearly 60 years, the U.S. had a positive ag trade balance with our trading partners around the world. That flipped negative for the first time in 2019,” he said. “‘The reason it flipped negative is because since 2014, our ag trade exports have only grown 1% per year in value, while our imports have grown 6% per year in value. It reflects more of a stagnation in our exports that we are sending abroad than anything.”

The U.S. exports 19% of its overall corn production and 40% of it goes to Mexico, so corn exports have remained strong in 2025. The situation with soybeans has been drastically different, Pudenz said. 

“We export roughly half of our soybean crop every year, and half of those exports, so 25% of the total production, typically goes to China,” he said. “We sold some soybeans in the first part of the year to China, roughly 6 million metric tons. But then they just turned the spigot off. Their government told their buyers, ‘You aren’t buying any more U.S. soybeans until we get some trade stuff sorted out.’ Until just a couple weeks ago, they hadn’t bought a single soybean from our new crop that we are harvesting right now, and so that has had downward pressure on the soybean markets.”

Vermeer’s outlook

Iowa-based manufacturer Vermeer started when founder Gary Vermeer invented the mechanical wagon hoist in Pella in 1948. Later, he developed the round hay baler, which made the company a household name. Today, the company’s largest segment is industrial equipment, such as horizontal directional drills used in underground utility installation and data center construction. 

In the ag sector, some of the company’s most popular equipment is used in cattle production, as well as corn stalk baling. Vermeer serves the forage segment of agriculture, primarily supporting livestock and beef cattle producers. After some market softening in 2025, Andringa said recovery is underway, driven largely by record-high beef prices.

“The segment of agriculture that we serve is the forage segment of agriculture. You see the evidence of that in corn stock baling; that is something that has really come on over the last one to two decades,” Andringa said. “But corn stalks are only one of the forage crops that round baling is used for. Ultimately, the end customer for the part of agriculture that we’re involved with is livestock, and predominantly beef cattle. Last year, in 2024, we didn’t see any softness in the part of the market that we serve, at all. This year, we did see softening, but not to the extent that row crop agriculture was experiencing. We think we’re already starting to see some recovery from the softness we saw this year, and that’s driven predominantly by record-high beef prices.”

Vermeer has many business partners in row crop production and has seen the effects those producers are experiencing, he said. 

“We’ve been headquartered in Iowa for our entire history, and we love being based in Iowa. We’re very knowledgeable and very aware of what’s going on in row crop agriculture. We’ve seen the impacts. We’re connected to a lot of people that experience impacts, but it hasn’t affected us to the same level as those ag manufacturers that are focused on row crops,” he said. 

When it comes to tariffs, imports and the domestic inputs the company uses in manufacturing, Vermeer has experienced some increased prices. Vermeer’s Tier One suppliers are domestic, so the company hasn’t had the tariff difficulties that some manufacturers have reported. Some of their Tier Two and Tier Three suppliers have had price volatility because of tariffs that the company has negotiated, he said. 

“We purchase almost all of our steel that we use domestically within the United States. But I keep telling people that when the price of corn goes up in Nebraska, the price of corn in Iowa is also going to go up,” Andringa said. “When the steel and aluminum tariffs went into place, U.S. spot steel prices immediately went up. It didn’t go up the full 25% and then it didn’t go up the full 50%, but it went up 20% and then 35%, respectively. From everything we hear there, there is sufficient supply within the country to meet demand. As that genuine supply-demand dynamic plays out, we’ve gradually seen the price of steel come down. As is the nature of our business, we typically buy months ahead, we can track out. It’s uncertain, and we certainly anticipate, as we continue to buy steel, it’s going to be at at least slightly elevated prices in comparison to what we were buying a year ago.”

Underground infrastructure, whether it be for data center construction, installing utilities or energy generation and distribution, is booming for Vermeer, he said. 

“Every aspect of that is strong right now, and frankly, it is [partly] government funded,” Andringa said. “There’s, frankly, a lot of state-driven broadband, fiber optic infrastructure that the funding is just now starting to roll out. Then there is just this incredible demand for data centers, for quantum computing centers, and [for] a lot of those data centers, they’re building facilities based on energy and water availability, and then when they build another one 600 miles away, they install their own private network to connect the two, and they connect their entire network together.”

Vermeer operates multiple sites in Iowa; its headquarters in Pella, a full-service parts and sales facility in Des Moines, a factory in Griswold and a facility at the Iowa State University Research Park in Ames. The company also manufactures equipment in South Dakota, Florida and South Carolina, where it recently expanded its facility to accommodate increased sales in truck-mounted vacuum excavators. This type of excavator typically uses water to softly excavate land, often for utility installation, to avoid damaging adjacent infrastructure. Another growing part of the business is its environmental equipment, which could be used in the aftermath of a major storm to convert fallen trees into wood chips. 

“We range from booming on the infrastructure side of our business to strengthening on the environmental and forward sides of our business,” he said. “Those are the things that we’re spending our time thinking about, and we’re kind of back to the good problems, which are ramping up capacity to meet demand.”

Andringa said that while tariffs and inflation have been challenges this year, there was no inflation spike earlier in the year as some expected. The research and development credits and capital expenditure updates in the One Big Beautiful Bill Act will help offset some of the increased costs incurred this year, he said. 

‘Ask an Economist’

The “Ask an Economist” segment of the podcast poses an audience member’s economic question to the economist. In this episode, Billi Hunt, executive director of America’s Cultivation Corridor, submitted a question asking how long the agricultural slowdown will weigh on Iowa’s economy. Pudenz said it’s tough to determine how long the economy will be affected and noted that many factors influence the situation. 

“It really is hard to tell, and that’s because when you’re dealing with commodities, you’re dealing with a world market,” he said. “Now the United States is increasingly having to deal with corn in Brazil and Brazil just continues to expand their corn acres. They’re planting corn as a second crop to a first crop of soybeans. It’s much warmer in Brazil than it is here, and they’re converting millions of acres of this scrubby grassland they call the Sertao into corn acres that they are then selling that corn on the international market. How do you proceed to turn around that row crop economy, which I think is really at the root of some of the economic challenges that the state of Iowa is facing here. How do you turn that around when your revenues are determined largely by commodity prices, and one of the things you can do is continue to increase and encourage trade around the world. The recent steps that the administration has made … we talked briefly about that deal with China, that will help the soybean folks, and if soybeans are more profitable, that will help increase soybean acres, which will hold back corn acres, which will also help corn be more profitable here domestically next year, too.”

Pudenz suggested that adding innovative practices to farming that help farmers do more in less time and with less effort, while also taking measures to reduce input prices, could help the situation.

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Check out Episode 1 and Episode 2