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Editor's note: The year 2011 was a news-packed one in the Midlands, from fighting wars to battling floods and much more in between. The year's events were so varied and resonated on so many levels that a simple list or ranking of top stories didn't seem to do the year justice. Instead, The World-Herald is looking back, beginning today, at some of the most notable news as 2011 comes to a close.
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In some ways, it's the story that didn't happen.
Not thousands of newly unemployed. Not a collapsed housing market. Not budget deficits that hurt school quality and public safety. Not wage cuts, consumer pullbacks, retail closings, bankruptcies, repossessed autos, foreclosed farms.
Instead, the healthy, optimistic Midlands economy, boosted by what some called a "golden year" for farming, became one of 2011's major news stories. The economic performance generated high standing for Omaha in various best-of rankings.
Best cities for business? We're No. 4.
Happiest cities? No. 4 again.
Best places to retire? No. 6.
Growth in college degrees over the past decade? No. 6.
Best places to raise kids? Arlington, Neb., in the northern part of the metropolitan area, is at No. 2.
Best places to live? Papillion is at No. 5.
Best cost of living, places with good jobs and cheap housing, best value cities, best cities for young professionals, best places for careers, best cities for recent grads, fastest-selling real estate, best cities for job growth, healthiest housing markets, cities with start-up fever, most affordable cities, best-run states, best qualify of life ...
You get the idea.
"It's like a world apart from the rest of the United States," said Iowa State University economist Bruce Babcock. "California, New York, the South — it's been kind of a calamity, the worst recession since the 1930s. Sometimes there are advantages to not living on the coasts."
Unemployment in Nebraska is half the national average, and Iowa's rate is one-third less. Housing prices are down in Omaha, but not disastrously so.
A major reason, Babcock said, is record farm income. That money stimulated local and state tax revenue and other economic activity, particularly in the western part of the Corn Belt, including western Iowa and Nebraska.
The money gushing from agriculture is what economists love: a rising tide that lifts all Midlands boats.
"Clearly it's created a buffer that has helped those states withstand the slow economic growth overall that the United States has suffered," Babcock said.
The employment impact of a strong farm sector is mostly indirect, he said, because grain farming has become increasingly efficient. According to the U.S. Department of Agriculture, in 1970 one farmer in one day could plant 40 acres of crops or harvest 4,000 bushels of grain. Today, a farmer can plant 420 acres or harvest 30,000 bushels in a day, thanks to sophisticated, super-size equipment.
Farm income in Nebraska grew an estimated 35 percent in 2011 to a record $5.4 billion, with Iowa also headed for a record. That's double the money from a decade ago.
Ag exports are triple 2000 levels. Barring international calamities, prices and exports are expected to remain high. The ethanol industry, which has tripled in production in five years, buys 40 percent of Nebraska's corn crop, producing both fuel and animal feed byproducts.
One impact is that the exodus of people from rural counties has reversed. Half the rural counties in the Midlands have added jobs since the Great Recession, and the metropolitan counties gained even more.
The Missouri River flooded thousands of acres of farmland this past summer, but not enough to prevent record overall farm income in the region.
In Nebraska, the farm boom is shared by irrigation system manufacturers Valmont and Lindsay, implement manufacturer Claas, rail hauler Union Pacific and the regional banks, among hundreds of other companies.
The latest example in Iowa: This month, Deere & Co. said it would expand its Des Moines equipment manufacturing plant, adding an $85 million assembly building. Over the past two years, the plant has gained nearly 500 employees.
Will the demand for farm goods, especially grain, continue?
Babcock said people who are buying farmland believe so, and they are driving land prices to record levels in Nebraska and Iowa. But there are risks ahead for 2012, especially Europe's financial crisis and China's rate of growth.
"If the euro goes and there's a banking calamity because of it, all bets are off on commodity prices," Babcock said.
Uncertainty over international issues and the federal government's budget may spill over to the Midlands, said Creighton University economist Ernie Goss. If Europe falters and the dollar strengthens, then demand for U.S. exports could drop, driving down the price of farm goods in the first half of 2012.
Francisco Blanch, a global commodities expert for Bank of America in New York City, said even though farmers are planting and harvesting record crops, supplies of corn and soybeans are low in relation to demand. That means continued higher prices for the two main grain crops grown in Nebraska and Iowa.
"Farmers are a very competitive bunch," Blanch said, so high prices will spur production and bring good income for corn and soybean farmers.
Although Bank of America experts predict a 90 percent chance of recession in Europe in 2012, Blanch expects China's economy to grow by 8.6 percent in 2012. He expects more than 5 percent growth in other emerging markets.
That would continue the rising demand for the food grown in the United States and help keep employment up in the Midwest, he said.
Babcock said if Europe "muddles through" its crisis and China keeps growing, the demand for agricultural commodities in the Midwest will stay strong for five or 10 years.
The United Nations says the world's population, which passed 7 billion in 2011, is due to hit 9.3 billion by 2050. That means steadily increasing demand for food — the linchpin of the Midlands economy.
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