Corn Production Key Concern in Swing State Iowa, Not Foreclosures

For swing state Iowa, political leaders will probably fare better if they focus on the state's supply of corn rather than its foreclosures.

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According to analysis from ""IHS Global Insight"":http://www.ihs.com/products/global-insight/index.aspx, USDA's preliminary estimate shows that Iowa's corn yield will be 18 percent lower than last year, and soybean yields will be down 13 percent.

While the federal crop insurance program will help alleviate some of the financial troubles corn and soybean producers may face, IHS stated the livestock industry will be hit hard due to higher feed costs.

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Not only will a decrease in the supply of corn impact the livestock industry, but a shortfall also raises concern over the nation's ethanol program. With Iowa leading the U.S. in ethanol production, IHS noted that one tough call in the presidential election year will be whether or not to waive the ethanol mandate, which requires ethanol in transportation fuel.

In terms of the state's foreclosures, in the second quarter of this year, Iowa ranked 33 for having 2.7 percent of its loans in foreclosure, according to data from the Mortgage Bankers Association used in the analysis. The national average is 4.3 percent. The percentage of prime loans in foreclosure as of the end of Q2 2012 was 1.7 percent compared to the nation's average of 3.1 percent. For subprime loans in foreclosure during the same period, the state's share was 11.1 percent compared to the national average of 13.6 percent.

The state's unemployment rate is low at 5.2 percent compared to the national average of 8.3 percent as of July. However, IHS noted the state's job growth will average 1.2 percent in 2012, while the national average is 1.3 percent. State and local government jobs are on the decline due to tight budgets, and IHS stated the service sectors are being held back by the slow housing recovery, among other factors.