Dan Piller was a business reporter for more than four decades, working for the Des Moines Register and the Fort Worth Star-Telegram. He covered the oil and gas industry while in Texas and was the Register’s agriculture reporter before his retirement in 2013. He lives in Ankeny.

U.S. Secretary of Agriculture Brooke Rollins’ March 31 visit to Iowa had the appearance and vibe of a high-ranking officer sent to the front line to boost the troops’ morale before the next assault.

Rollins visited all the strategic strongholds of Iowa agriculture: an ethanol plant, a hog farm, a feed processing operation, and a suitably big (Republican-leaning) farm operation just west of Des Moines, handing out plenty of morale-raising attaboys to the soldiers in the trenches.

But even as Rollins addressed the “Ag Leaders Dinner” in Ankeny—assembling some 500 people and Iowa’s agricultural royalty such as Governor Kim Reynolds, U.S. Senator Joni Ernst, and Iowa Secretary of Agriculture Mike Naig—Iowa’s economic earth was beginning to shake.

Just a day after the Rollins photo-op, Whirlpool announced pink slips for 651 employees at its Amana refrigerator plant. A statement from the company cited “necessary adjustments to production” to “align with current market conditions driven by consumer demand.” (Declining consumer demand for domestic appliances is an outgrowth of the slowdown in new home construction; tariffs the first Trump administration put on lumber and steel, which the Biden White House declined to remove, are partly responsible.)

The Amana workers were the latest casualties of a broader trend in layoffs. According to Iowa Workforce Development’s most recent monthly report, the state’s manufacturing sector lost about 7,600 jobs over the previous twelve months.

Aside from Whirlpool, most lost jobs in Iowa have been in the agribusiness sector. Tyson Foods closed its pork slaughter plant in Perry in February, costing almost 1,300 workers their jobs. A 2024 analysis by Iowa Farm Bureau economist Christopher Pudenz noted the announced layoffs and loss of related jobs “are estimated to be directly responsible for reductions of $647.5 million in value added economic activity (equivalent to GDP) and $2.8 billion in total sales.”

“When indirect and induced impacts are considered,” Pudenz continued, “the total estimated statewide impact grows substantially and could account for up to 11,372 jobs lost with reductions of $828.3 million in labor income and $1.5 billion in value-added activity.”

Two days after Rollins’ glad-handing Iowa visit, President Donald Trump unveiled his “Liberation Day” tariffs on more than 60 countries, raising the average tariff from 2.5 percent to 23 percent. Mexico and Canada already labor under 25 percent tariffs, and China, heretofore the biggest customer for Iowa soybeans, now faces combined tariffs of 54 percent.

The inevitable aftermath of Trump’s announcement was a stock market plunge, with the Dow Jones Industrial Average posting its biggest one-day loss since 2020 on April 3. The sell-off continued on April 4: for the first time ever, the Dow “shed more than 1,500 points in back-to-back days.” Economically savvy folks know that the Dow and the equity markets in general are just one indicator of overall activity, but bad economic news is likely to further shake already wobbly consumer confidence.

The bloodbath on Wall Street most likely isn’t over. In a note to clients at midweek, investment firm Morgan Stanley said the tariffs, higher even than the Smoot-Hawley tariff of 1930 that is widely credited with making the Great Depression harsher than it had to be, came as a surprise to market professionals.

“This is the highest in history and exceeds the Smoot-Hawley tariffs of the 1930s. If we knew that announced policy on tariffs was the end game, we would be selling equities (down to maximum investment policy allowed […]),” Morgan Stanley said in a note not likely to generate a flood of buy orders.

Knowledgeable agrarians don’t need history or economic lessons about the damage tariffs have done to American farmers and livestock producers. Grain markets took a deep dive in 2018-19 when Trump rolled out his first round of tariffs. The administration provided $28 billion in taxpayer subsidies for farmers to lessen the blow; Congress approved another $10 billion in late 2024 as part of a federal disaster relief package.

Agriculture lobbyists know farmers will need more handouts and worry that taxpayer patience may be wearing thin. There is a new concern this time as well: the USDA’s Commodity Credit Corporation, the depression-era federal farm lending entity that served as Trump’s piggy bank for farmer handouts six years ago is now virtually empty thanks to the new chronic inability of Congress to renew the Farm Bill.

Reporting from Washington in recent weeks indicates that the CCC’s reserves are down to $4 billion. At her March 31 stop in Waukee, Rollins promised help for farmers, but threw in a sideways comment about Trump’s predecessor: “We don’t have quite the funds we had back then, because under the last administration, a lot of those were spent.”

Falling commodity markets and depleted federal reserves come on top of the turmoil that tariffs have always visited on agriculture and small towns. American Farm Bureau Federation President Zippy Duvall complained in February and again this week about the risks posed by Trump’s tariff policies: “Tariffs will drive up the cost of critical supplies, and retaliatory tariffs will make American-grown products more expensive globally. The combination not only threatens farmers’ competitiveness in the short-term, but it may cause long-term damage by leading to losses in market share.”

Duvall, a Trump loyalist, kept those opinions to himself through the campaign last year and waited until after Trump was safely elected and inaugurated before speaking up. U.S. Senator Chuck Grassley, a good MAGA soldier up to “Liberation Day,” similarly remained silent until early April. But he broke ranks with Trump after the new tariffs were announced by co-sponsoring a bill (along with Democratic Senator Maria Cantwell of Washington) that would take back the tariff-making authority from the White House and return it to Congress, where it has resided most of American history.

“Congress has a constitutional role through the Commerce Clause on trade matters, and we should reassume that role,” Grassley said in a press call on April 1— not calculated to earn him another invitation to Mar-a-Lago.

But House Speaker Mike Johnson’s steadfast loyalty to Trump and the MAGA dogma guarantees that the Grassley-Cantwell initiative is unlikely to become law and give relief to Iowa’s farmers and its economy. Signs abound that Iowa could use some economic juice.

The Federal Bureau of Economic Analysis released its annual report of states’ economic performance, and it showed Iowa and North Dakota as the only states to show negative economic growth in 2024.

The culprit isn’t hard to find; a 2.4 percent decline in agriculture’s contribution to Iowa’s gross domestic product. The other twin tower of Iowa’s economy, finance and insurance, wasn’t on fire last year, either, showing a state GDP gain of just 0.14 percent.

Since Iowa is the national leader in production of corn, soybeans and hogs, the downturn in grain prices made itself felt from the Missouri to Mississippi Rivers.

“The impact has been felt particularly hard in Iowa as net cash farm income from corn and soybeans plummeted to the lowest level in the last 15 years,” wrote Iowa Farm Bureau economist Pudenz in November. “A report from Farm Credit shows net cash farm income fell 38% for corn and 40% for soybeans in 2024 compared to a year earlier.”

Throughout its history, Iowa agriculture has endured various downturns due to drought, pests, and depressions (usually brought on by tariffs or embargoes). In previous eras Iowa farmers could export their way out of the hole. That may no longer be true. As recently as the year 2000, America controlled as much as 80 percent of world corn, wheat, and soybean markets. But since 2010, those percentages have been cut in half by surges in wheat production in Russia and enlarged corn and soybean capacity in Brazil.

The result of this new competition for Iowa farmers has been price-depressing surpluses, and Trump’s tariffs on Mexico, Canada and China create a recovery mountain that may be particularly steep to climb. Rollins said the right things about traveling abroad later this year in search of new markets. But a clear-eyed look at the world suggests that the China-Mexico-Canada triumvirate would be particularly hard to replace elsewhere. 

The income and GDP numbers clearly label Iowa as an economic laggard not only among the 50 states but among its Great Plains peers (North and South Dakota, Minnesota, Kansas, Nebraska, and Missouri). It also calls into question the post-2010 economic strategy of low wages and low taxes that Iowa’s Republican majority has imposed on the state.

The low-tax, low-wage strategy has been the counter to Iowa’s main historic economic problem: shortages of both labor and capital. The rival theories of Adam Smith and Karl Marx are scant comfort to a state struggling to attract workers and cash flow.

In the 21^st century, Iowa has been burdened with a labor shortage that can fill just two-thirds of available openings. Immigrants replace much of the void in meatpacking, farm labor and rural construction, but MAGA’s anti-immigrant doctrine makes further expansion beyond those labor backwaters unlikely.

A look at the map of Iowa’s neighboring states’ minimum wages could provide a clue to at least holding Iowa’s workers in place, particularly in rural areas where a less competitive labor market has kept tight lids on wages. Motorists who see signs advertising fast-food jobs at $15 per hour in Des Moines suburbs probably question the need to raise the statewide minimum wage. But many of those more highly-paid hamburger flippers are likely migrants from rural areas where wages for unskilled and semi-skilled labor are much lower.

(An ancillary issue affecting Iowa’s chronic shortages of rural hospital and nursing home workers is the problem of keeping those workers—who likely can line up comparable jobs just about anywhere—if their poorly-paid blue collar spouses decide to take advantage of better-paying jobs in Omaha, Kansas City, the Twin Cities or Sioux Falls, where cultural offerings likely are better as well.)

Iowa’s 385,000 workers who toil at wages below $15 per hour, the rate at which changes in the minimum wage have most effect can now be tempted by minimum hourly wages in adjoining states of $11.13 in Minnesota, $13.50 in Nebraska, $13.75 in Missouri, $15.00 in Illinois $15.00 and $11.50 in South Dakota. Only Wisconsin matches Iowa’s $7.25.

So while the political debate rages, Iowa’s economy awaits the golden era promised by lower wages, lower taxes and now Trump’s “Liberation Day” higher tariffs.

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Top photo of Senator Chuck Grassley with Brooke Rollins was first published on the senator’s X/Twitter feed on December 19, 2024.