Agriculture, Aviation Woes Cited for Lag in Personal Income Growth in Kansas

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Personal income growth in Kansas is below the national average largely because of troubles in agriculture.

Kansas farmers face an expanding drought and low commodity prices, though a break in an ongoing tariff dispute may bring those prices up. Agriculture makes up about 40% of the state’s economy, with industries related to agriculture and food production worth about $65 billion annually.

Kansas Public Radio reports that the state’s personal income has grown by 1.6% since late 2007, when the Great Recession started. The national rate is 2.1%.

“Farmers have bills to pay,” Kansas Wheat Commission CEO Justin Gilpin said. “Ultimately, what we need to do is hopefully see commodity prices somewhat bottom out here and get trade going.”

The blow to farmers has been softened by a total of $732 million in federal trade-bailout money in 2019 alone.

But agriculture’s troubles in Kansas also come with problems for another major sector of the state’s economy, aviation. Boeing plans to halt production of its troubled 737 Max in January and Kansas may start paying workers at Wichita-based Spirit AeroSystems, which makes their fuselages.

Joanna Biernacka-Lievestro of the Pew Charitable Trusts said the Kansas farm industry was “the biggest drag on personal income growth over the past year.

While all states have seen their economies grow since the Great Recession, Kansas had the eighth-worst personal income growth in the nation over the last year. Biernacka-Lievestro said the Midwest “lags the country in total personal income growth over the past year.”

Kansas Department of Agriculture Economist Peter Oppelt said low commodity prices mean farmers take home less money while costs keep rising for seed, fertilizer and labor.

“If the farming sector is not doing well, those farmers aren’t going to go out and buy a new truck or they may not eat out as much at a restaurant,” Oppelt said. “The rest of that community is going to feel the effects.”

A nearly two-year-old trade fight with China has led to tit-for-tat tariffs affecting U.S. agriculture exports. Gilpin said he hopes it’s temporary pain as the U.S. started forging a truce with China in mid-December. Farmers also might benefit from the impact of renegotiated deals with Japan and Korea.

The U.S. House also recently gave President Donald Trump a big bipartisan victory by approving a renegotiated trade agreement with Canada and Mexico, and the Senate is expected to consider it after the holidays. They are the two top destinations for Kansas crops.