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Livestock production paves way for ripple effect of growth

10:20 AM, Feb 20, 2012   |    comments
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By Adam Belz, USA TODAY

SIOUX CENTER, Iowa - If manure smells like money - and in February 2012 the commodity markets say it does - then Sioux County Iowa is one of the wealthiest places in America.

Truckloads of cows and pigs rumble south every day on Highway 75 on their way to slaughterhouses in Omaha and Dakota City, Neb. Profit flows back into the towns of Rock Valley, Hull, Sioux Center and Orange City.

But something more than a livestock boom is going on. There's an industrial revolution in one town here, where commuters travel from 66 ZIP codes to churn out hinges, valves, tractors parts and backhoe buckets. Scientists at local genetics firms sort eggs and sperm to improve herds and clone animals to find cures for human diseases.

In a part of the country where small towns are losing their factory jobs, their Main Streets and their people, this area, in the northwest corner of Iowa, is moving in the opposite direction. Dollars earned from cattle and hogs have fertilized a field of innovation and growth, and the recovery is blooming.

Unemployment here was 3.6% at the end of 2011, two points below the state average and less than half the national average. The population grew 6.7% in the 2010 Census, 63% faster than the rest of the state.

"They have embraced livestock production as a way of life, and it's benefited them. They've also built up advanced manufacturing, and a commitment to entrepreneurship and re-investing in new biotech companies," said Debi Durham, director of the Iowa Department of Economic Development.

Kent Pruismann owns a hog, cattle and corn operation south of Rock Valley, Iowa. Times are good. Drought in the Southwest has cut the U.S. supply of cattle to its lowest level since 1952. Pruismann and his other cattle farmers sell directly to the meatpacking plants, and keep tabs on constantly fluctuating prices with each other via text message.

In January, he sold a shipment of cattle for $1.25 a pound, fired off a text message, and watched identical sales by other farmers in the area ding his phone for the next 15 minutes.

He employs four men on the sprawling feedlot and the hog confinements scattered along quiet country roads nearby, but the real benefit of livestock farming is the ripple effect, said John Lawrence, director of agriculture and natural resources extension at Iowa State University.

Cattle yards and hog confinements need loans, feed and ethanol byproducts for the animals to eat, veterinarians and nutritionists to keep them healthy, truck drivers to drive them to slaughterhouses and contractors to build and wire buildings, repair fences and pour feedlots. Livestock farming generates paychecks for feed mill workers, auctioneers, stock trailer builders and equipment mechanics. Sioux Center Councilman Dave Krahling once called this the "flywheel effect" - dollars compounding and gaining speed with each transaction.

The industries that serve livestock farms in Sioux County have multiplied over the past 40 years. A cluster of biotech companies has sprung up in Sioux Center, led by Trans Ova, a firm born in 1980 when a veterinarian branched into embryo transfer, and later sorting semen by gender, and then cloning.

Trans Ova is part-owner of Exemplar Genetics, a firm that raises and clones pigs for research into cystic fibrosis, heart disease, cardiac arrhythmia and cancer. Exemplar was founded in 2008 by John Swart.

"It all goes back to the successful agricultural base," Swart said. "We're gene jockeys trying to change the genome of pigs, but raising a pig is raising a pig. We just sell our pigs for thousands of dollars apiece instead of hundreds of dollars."

The booming agricultural economy also has fueled a manufacturing sector that produces parts for tractors, trucks and earth-moving equipment, motors and pharmaceuticals.

Sioux Center, a town of 7,000, boasts 2,200 jobs making pharmaceutical products, small electrical motors, suspension systems for trucks and microwavable bacon, among other things, said Paul Clousing, the city manager. Rock Valley, a town of 3,000, has about 1,200 jobs at machine shops, according to a back-of-the-envelope calculation by Phil Kooima, whose grandfather launched the machining industry there in the 1940s.

Even the caliber of the county's workforce can be attributed to livestock farming, say people in the community. They argue that people who grow up raising cattle and hogs learn how to solve problems, fix things and run a business.

"They know what it is to work; they know what it is to not work - things don't get done," Clousing said.

Conner Bailey, a professor of agricultural economics at Auburn University and president of the Rural Sociological Society, said livestock production has become a specialized part of agriculture across the U.S., rather than one part of a diversified farm operation.

"Instead of having all of your farmers growing both row crops and animals, now we have moved toward specialization," he said. "It's the animals that provide the value added."

The added value and corresponding economic benefit is now focused in specific areas, Bailey said. Parts of Arkansas and Alabama now have clusters of chicken confinements, and North Carolina has a few counties with high concentrations of hog production, he said.

Contributing: Belz also reports for The Des Moines Register

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