A stagnant farm economy is reverberating hard through Nebraska and Iowa, both of which posted the nation’s weakest income growth in a recent federal report. The trend helps explain why both states are facing budget problems, but lawmakers have differing views on how to address the problem. The U.S. Bureau of Economic Analysis says Nebraska and Iowa posted the slowest income growth in the second quarter of 2017. Farm incomes have fallen because of a glut of corn and soybeans that lowered commodity prices. Agriculture is the largest industry in both states.
Iowa showed strength in other areas of its economy, such as finance, insurance and non-durable manufacturing, but those gains were offset by the farm slowdown, said John Fuller, a spokesman for the Iowa Department of Revenue. Iowa’s revenue shortfall was driven by the agriculture and its ripple effect on other businesses such as seed and machinery dealers and local banks.