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New equipment plants signal manufacturing strength, not full ag rebound

U.S. Senator Chuck Grassley says the equipment manufacturing sector is picking up steam nationally.

“I’ve been very happy to hear jobs are coming back to Iowa, whether it’s construction or making farm machinery,” he said. “It’s good for our workers and very good news for the economy.”

Over the last 30 days, manufacturers like John Deere and Vermeer have made significant production announcements.

John Deere is planning to open two new U.S.-based facilities that will generate 150 jobs each. Deere also recently said it’s bringing back 245 employees in Iowa who were previously laid off. Vermeer on Friday announced a new 300,000 square foot production plant in the Des Moines metro which will create more than 300 jobs.

But Grassley told reporters during his weekly ag press call on Tuesday that he believes these production moves deal more with non-agricultural manufacturing.

“In the case of John Deere, it’s on construction equipment,” Grassley said. “Vermeer is involved in agricultural equipment as well, but they are also very big in non-agriculture heavy equipment.”

Vermeer president and CEO Jason Andringa tells Brownfield their ag side of the business is in hay and forage, which he says has held up better than other parts of agriculture like row crops.

“Frankly, more than 80% of our business is on the industrial side,” Andringa said. “Primarily installing underground infrastructure and processing organic waste. That part of Vermeer is booming.”

Creighton University economist Ernie Goss says in order for the ag equipment sector to recover, more reshoring will likely need to occur.

“What President Trump calls reshoring, we’d like to of course see that but we just haven’t seen it to any large extent,” Goss said. “Those are long-term decisions made. Hopefully, that’s one of the more promising aspects going forward will some of that reshoring of (ag) manufacturing to the U.S.”

Grassley said while much of the recent growth is outside traditional agriculture, stronger manufacturing still supports rural communities where many farmers rely on off-farm income.