Iowa farming millionaires and what it means

Bloomberg’s Tim Jones and Elizabeth Campbell wrote a fascinating story about the increasing wealth of Iowa farmers last week. In it, they examine the rising cost of land, and what that means for the people of the mostly rural state.

From their story:

Farmland auctions in Iowa now resemble a dressed-down spectator sport with Sotheby’s prices, a reflection of the yawning divide that has opened in some of the most bountiful stretches of rural America. Farm earnings in the state and throughout the U.S. increased at eight times the rate of nonfarm wages from 2008 to 2011, fueling resentment and straining the social fabric of places with deep egalitarian roots.

“Iowa had had historically low levels of inequality, but now it is skyrocketing,” said David Peters, a sociologist at Iowa State University in Ames who specializes in income disparity. “Today you have far fewer farmers and a small number earning larger and larger incomes. It doesn’t spread through the economy like it used to.”

Booming worldwide demand for grain has showered wealth on farmers by tripling Iowa land values in the past decade and setting them up for record profits this year, even in the face of the nation’s worst drought in more than half a century, the U.S. Department of Agriculture projects.

But the story isn’t as simple as rising land values bringing new wealth and increased production helping to add jobs. In Iowa, it seems that the gap between rich and poor is widening, something that seems out of place with the much-touted rural values.

From the Bloomberg story:

Iowa’s most recent unemployment rate was 5.2 percent, well short of the national average of 7.8 percent. While that has complicated Republican Mitt Romney’s efforts to take the state’s electoral votes away from President Barack Obama, the job growth has largely bypassed its least-populous areas.

The split has produced climbing levels of need in the nation’s breadbasket. Food-stamp demand in Iowa rose 6 percent in July from a year earlier, according to the latest government data. That’s twice the 2.9 percent nationwide increase.

Iowa’s income gap has widened, as it has in other states, after the loss of good-paying industrial jobs. A Maytag appliance plant owned by Whirlpool Corp. (WHR) closed in Newton in 2007. Electrolux AB (ELUXB) shut two factories last year in Webster City and Jefferson, an hour apart. The lost factory jobs have been replaced by low-skilled service positions, often part-time and without benefits.

The story is full of great, on-the-ground reporting. The kind that sometimes lacks in business stories since many places have a hard time sending reporters into the field, especially to places such as Iowa.

The reporters go on to profile several Iowa residents, some farmers – landowners and renters as well as people who have lost their jobs in other areas such as education or manufacturing. It’s obvious the reporters spent a lot of time talking to people and really capturing what’s happening in the state.

There’s one piece of this story that’s missing, in my opinion. What does the widening gap mean for politics? Iowa always has the first primary, and there’s a lot of attention placed on the state. It’s not a huge part of the electoral college, but the media often holds it up as the poster child for the Midwest.

I want to know how all this new money affects the way people think about elections, if at all. I think it’s a topic that deserves more than a paragraph in a feature piece of this length.

I don’t want this small oversight to take away from the story. It’s interesting, well reported, and obviously the reporters took a lot of care to tell the story from many different angles. I just would have liked to see one of those be the political angle.