Why Iowa's agriculture equipment companies are doing mass layoffs

Companies like John Deere and Bridgestone have laid off thousands of Iowa workers who build farm equipment over the last year, leaving deep cuts in urban and rural workforces statewide.

Why it matters: The cuts hit workers from some of the state's top employers, but also indicate a larger revenue crisis for farmers, experts tell Axios.

The big picture: Farm machinery and equipment manufacturers employed 31,821 Iowans in 2022, according to a 2024 state ag economy study .

• Those jobs pay better than most: an average salary of $63K in Iowa in 2020.

Catch up quick: John Deere announced 1,500+ cuts across its factories in Iowa , including Ankeny and Waterloo.

• Bridgestone in Des Moines announced 216 layoffs this summer for workers in its agricultural tire section — its first local layoffs since 1990.
• Kinze Manufacturing in Williamsburg along I-80 laid off 193 employees this month .

Zoom out: A recent slump in corn, soybean and grain prices is causing many farmers to delay investments in major equipment, Peter Orazem, an Iowa State economics professor, tells Axios.

• Manufacturers are responding by lowering their equipment production and subsequently their workforces, he says.

Context: Commodity crop prices are historically cyclical, but global forces have taken them on a rollercoaster recently.

• Grain yields took a major hit during the pandemic and stressed supply. Russia's invasion of Ukraine and the Midwest's long drought also pushed prices way up.

Today, better weather and Ukraine's resumption of grain exports have boosted supply and lowered prices back down, which means farmers are earning less.

Threat level: The USDA forecasts the sharpest decline in farm income in history for 2024 after reaching record highs in 2022.

• Incomes are expected to fall below their 2003-22 averages, adjusting for inflation, according to the USDA .

Plus: High interest rates are making it harder for farmers to finance new equipment, Orazem says.

• Interest rates are also detrimental for companies like Deere, who lose money if million-dollar tractors sit in inventory, Orazem says.

The intrigue: Food processing plants like Tyson also underwent major layoffs in Iowa this last year, but that industry is doing mostly well, Orazem says.

• The bigger issue for them has been Iowa's aging plants and lack of workforce.

What's next: Crop prices likely won't tick up again until 2026, Ben Ayers, an economist with Nationwide, tells Axios.

• Next year will probably still be difficult, he says.