Iowa State University economist Dave Swenson said the state’s economic mix — heavy on the generally stable agricultural and financial services sectors and light on the more volatile tourist trade — likely has shielded its economic output from the catastrophic drop seen in the Commerce Department report.
“We didn’t lose as much of our employment,” Swenson said. “Our recovery, at least in the early stages, is a little bit more rapid than the national recovery.”
In the Aug. 3 Omaha World-Herald story, "Economist: Ethanol industry ‘is in worse shape than we thought.’"
“The ethanol industry’s problem is bigger than the waivers,” Swenson said. Swenson said plants struggle even though the industry is selling dried distillers grains (DDGs), a byproduct of ethanol production, for livestock feed.
“Even with DDG sales, they are losing money because we have been awash in oil and now the recession has lowered prices,” Swenson said. It could be a rough road for a while. Swenson said after the Great Recession, fuel demand took six years to fully recover.
However, Iowa is better positioned that most states because it is the top producer of corn, from which most ethanol is made, Swenson added. That reduces expenses.