Iowa Governor Terry Branstad convened a hearing this morning in Mount Pleasant to discuss the drought and its impact on the state.
“It’s important that we do all we can to help people through this difficult time,” Branstad told a local reporter after the hearing, “and obviously more rain would help.”
Tom Miller raises hogs in Henry County and is a swine specialist for Iowa State University Extension. He said grain farmers will “make it through” the drought because most have crop insurance, but few livestock operators bought what’s called livestock gross margin insurance.
“What it does it insures the margin,” he said. “Well, the problem here over the last several months has been the margin hasn’t been so great, so they still probably would have lost some money, but it wouldn’t have been as big a loss as what they’re probably going to face now.”
Miller suggests the drought may forever alter the make-up of the pork industry.
“Our industry has kind of been consolidating over the last 10 or 15 years and the people probably most at risk of going out of businesses through this are the smaller, medium-sized farms and the ones that have been the younger producers that don’t have as much equity,” Miller said. “And we really hate to see those people exit the industry.”
The governor expressed fears there will be a “massive liquidation” of livestock herds in Iowa.
“I know last year with the drought in Texas we saw them liquidate a lot of cattle,” Branstad told reporters. “We’d hate to see that happen in Iowa. We are the leading pork producing state. Our cattle numbers have been coming and that’s made a real difference in the State of Iowa’s revenue situation.”
Branstad called agriculture the “bright spot” in Iowa’s economy.
“We’ve had a situation in the last couple of years where both grain and livestock producers have made money,” Branstad said in Mount Pleasant. “Now, this really threatens the livestock side in particular.”
Federal officials say about 90 percent of Iowa grain farmers have crop insurance that will cover drought losses.
In August the USDA has the authority to let cattle producers bale hay from ground that’s enrolled in the Conservation Reserve Program, a move that would help alleviate the shortage of forage for cattle. The governor warns livestock producers face ever growing feed costs because the price of grain is rising as crop conditions keep falling — because of the drought.
Iowa has led the U.S. in pork production since the 1880s and last fall there were more than 20 million hogs on Iowa farms — an all-time record. On January 1 of this year, there were more than 3.9 million head of cattle in Iowa.
(Reporting by Theresa Rose of KILJ in Mount Pleasant)