Dec. 28 (Bloomberg) -- It’s hard not to feel the rhythm of a different era when Gordon Wassenaar and Dean Taylor meet for lunch at Goldie’s Ice Cream Shoppe LLC in Prairie City, Iowa, 20 miles east of Des Moines.
A restored 1950 Ford with painted-on flames sits in the parking lot of the diner and ice cream stand, across the street from a co-op grain elevator. In 2009, the Iowa Pork Producers Association gave Goldie’s its annual award for the state’s best breaded pork tenderloin sandwich. And talk among the restaurant’s regulars focuses on a topic that in much of the U.S. sounds like the distant past: prosperity.
“You’ve got people buying new machinery, new pickups and cars,” said Wassenaar, 75, who raises corn and soybeans. “You don’t hear the doom and gloom in the rural areas.”
That separates these Iowans from voters elsewhere, who rate the U.S. economy as a top concern in opinion polls. For rural Iowans, boosting ethanol production and promoting free trade loom as the prime issues, according to farmers, state officials and analysts.
In the state’s Jan. 3 Republican presidential nominating caucuses, such concerns should help former U.S. House Speaker Newt Gingrich, whose consulting firm earned $575,000 between 2009 and this year for advising an ethanol industry lobbying group, and harm Texas Governor Rick Perry, who proposes ending all federal energy subsidies, including those for biofuels.
Rick Santorum may benefit from the time he has spent in rural Iowa; the former U.S. senator from Pennsylvania has made a point of visiting all the state’s 99 counties. Mitt Romney, who today begins a bus tour of Iowa, may be hurt by not having focused on the state until recently; Taylor terms the former Massachusetts governor “a little hard to pin down.”
Representative Ron Paul of Texas also opposes federal aid to the ethanol industry yet enjoys a solid core of support in Iowa based on his calls to significantly shrink the federal government and expand personal liberties. During a Bloomberg News reporter’s five-hour drive along rural roads only two yard signs for a candidate were spotted, both for Paul.
“People may not like some of his positions, but they admire his consistency,” Iowa Governor Terry Branstad, a Republican, said of Paul.
The leading Republican candidates have spotlighted the overall U.S. economy as President Barack Obama’s main failing in office, and they generally hammer away at that theme in their Iowa appearances.
Gingrich told a Rotary Club audience in Dubuque, Iowa, yesterday that Obama is an “anti-job creator.” Romney in a speech in Davenport, Iowa, yesterday described a nation beset by economic anxieties and decried what he called “the Great Obama Recession.”
Across the nation, though, farm profits are at a record and agribusinesses are thriving. Shares for Terra Nitrogen, a Deerfield, Illinois-based fertilizer-maker, are up 49 percent this year.
Iowa has seen record incomes as the nation’s top producer of corn, soybeans, pork and ethanol. Its state and municipal bonds had a total return of 11.7 percent through yesterday, trailing only Wyoming, Illinois, California and Montana, according to Barclays Capital. Unemployment is 5.7 percent, compared to 8.6 percent nationwide.
One in six Iowa jobs are tied to agriculture, according to a 2009 study by Iowa State University economist Dan Otto. Minneapolis-based Cargill Inc. in March took over a flagging ethanol plant in Fort Dodge, Iowa. Pioneer Hi-Bred, the seed division for DuPont Co., is headquartered in Johnston, Iowa.
Land prices at an average of $5,600 an acre in Iowa are more than triple what they were a decade ago. Pork, crop and ethanol producers are prospering in part because of exports. U.S. shipments of pig meat were up 22 percent this year through October, while one of every four rows of soybeans is sent straight to China.
Jim Dougherty, who grows corn and soybeans near Lake City, Iowa, about 75 miles northwest of Des Moines, just bought a John Deere combine for the 520-acre family farm, founded in 1909. The combine retails for $165,000. Dougherty bought it in part to keep his taxes down.
“It’s not unusual to see farmers put 50 percent down or write a check to cover the cost,” he said.
Dougherty, 74, remains undecided about whom to support, like many Iowans. He and other family members are “still trying to make up our minds,” said his daughter, Darcy Maulsby, 38.
“We don’t look to politicians to have all the answers,” Maulsby said. “We just want the government to get out of the way.”
Polls have also shown that a majority of likely caucus-goers are open to switching from whichever candidate they currently back.
In a time of ample credit and attractive returns on land and crops in Iowa, bankers -- often a source of frustration for farmers -- are seen as partners in prosperity. Taylor, one of the diners at Goldie’s, distinguished between investment bankers and small-town lenders.
The collapse of MF Global Holdings Ltd., the Wall Street firm that former Senator Jon S. Corzine of New Jersey headed, is hurting faith in commodity trading, he said, while confidence in community banks and the farm credit system is strong.
“I won’t do business with a bank whose name you’d recognize,” said Taylor, 64. “If you deal with a bank that’s out of your league, they’ll squash you like a bug and not realize it.”
The week before Christmas, a group called Occupy Iowa City disrupted a restaurant meet-and-greet held by Minnesota Representative Michele Bachmann, another Republican presidential candidate. The protestors chanted “Go, just go” at her.
Dave Seil, 47, of Gowrie, Iowa, responded to the demonstration with rolled eyes.
“They just kind of shoot themselves in the foot,” said Seil, who grows corn and soybeans along with raising a herd of about 35 beef cattle.
In 2008, Seil backed former Arkansas Governor Mike Huckabee, the winner of that year’s Republican caucuses. This time, he’ll be out of town and unable to attend.
Branstad, elected governor in 2010 after previously serving four terms in the office, said prosperity means less urgency for rural voters to participate in the caucuses. Still, he expects a high turnout among farmers.
“They’re not in the fields, so they have the time,” he said. “They’re very concerned about the international marketplace and where candidates stand on renewable fuels. They’re very concerned about interest rates and the debt.”
In a voter report card prepared by the Iowa Corn Growers Association that rated the presidential candidates on their positions on Iowa farm issues, Gingrich received an A grade and Santorum an A-. Romney got a B, Perry a C-, Bachmann a D+ and Paul a D.
Obama received a B.
“Gingrich and Santorum are right up there as people who will work with ethanol,” said Taylor, who grows corn and soybeans. Of Perry, he said, “he’s Texas and oil. He’s the anti-Iowa.”
Taylor said he’s leaning toward supporting Romney, despite some qualms, mainly because he likes his chances of beating Obama.
“He’s made some comments about trade and China that’s made a lot of us Iowans nervous,” Taylor said, referring to Romney’s call to label China a currency manipulator and put new tariffs on its imports. “But he’s the most likely to carry the independents in the election, and we need to win this one.”
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