
A panel of local economic leaders offered their perspectives on a variety of issues at the Corridor Business Journal’s 2025 Economic Forecast Luncheon, held Jan. 15 at the DoubleTree by Hilton Cedar Rapids Convention Complex. Topics ranged from the impact of health care costs and multinational tariffs to responsible energy generation plans, property and casualty […]
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Click here to purchase a paywall bypass linkA panel of local economic leaders offered their perspectives on a variety of issues at the Corridor Business Journal’s 2025 Economic Forecast Luncheon, held Jan. 15 at the DoubleTree by Hilton Cedar Rapids Convention Complex.
Topics ranged from the impact of health care costs and multinational tariffs to responsible energy generation plans, property and casualty insurance trends and strategies to cope with a “soft” ag economy.
Panelists included Brent Cobb, CEO of World Class Industries; May Farlinger, president of Interstate Power & Light Company and vice president of operations for Alliant Energy Corporation; Mike Gerdin, president and CEO of Heartland Express; Beth Goetz, director of athletics at the University of Iowa; and Jason Smith, CEO of TrueNorth Companies.
The panel was moderated by Jack Evans, chair of the board of the Hall-Perrine Foundation.
Here’s a sampling of some of the questions and answers provided by the panelists.
Mr. Evans: Brent, we’ve read a lot about layoffs in the agriculture sector. How has this affected your business, and what do you expect in 2025?
Mr. Cobb: Those declines are very real in our business. If you look at the price of corn, it's now down about 50% from its high in 2022, and we're seeing a corresponding drop in our schedules. Our customers include John Deere, Case New Holland and other folks in that space that are making equipment. So in terms of the impact, it’s certainly significant. One of the strategies that we have as a business is to be diversified in multiple different markets. That's helped us out, and we've always been focused on trying to find projects that help us backfill, because this happens in the ag space. In terms of what we see for (2025), I think we've started to hear some people talk about recovery in the second half of the year. I'm not terribly optimistic that's going to happen, although a change in the Farm Bill coming to the forefront, or a change in more ethanol being used, would be helpful to perk up the price of corn and other commodities. I would think that the recovery is probably more in the 2026 time frame.
Mr. Evans: May, could you comment on the status of the two data centers scheduled for the Business Park?
Ms. Farlinger: We're really excited about the two data center projects that have been announced at Cedar Rapids. Those have been announced for the Big Cedar Industrial Center. There is a lot of earth that has been moved in the last couple of months, and we're going to continue to see that activity over the course of the next couple of years as these projects come to fruition. We've really been laying the groundwork for this type of growth for quite some time, and we can't do it alone. We've got great partners. I'm not going to attempt to name all of them, because to land projects of this size, it takes a group of people coming together. These projects are truly transformational. They're transformational for Alliant Energy, because it's going to add 20% to our peak demand across our system. That's significant. They're going to be transformational for the City of Cedar Rapids, just thinking about the revenues that they're going to be providing back to this community. Growth is really important for our industry, because it's the greatest lever that we have from an affordability standpoint. We're a heavy asset-based business. If we can sell more kilowatt hours and therms, we can spread those fixed costs across more sales, so it's beneficial for all of our customers. We're benefiting from this activity right now – not just us, but the industry across the board, has been flat to declining sales for years – so seeing the activity from a reshoring, onshoring, data centers, AI standpoint is fantastic. We want to capture as much of that as we can, not only in Cedar Rapids, but in Iowa and Wisconsin and our service territories, and we're going to continue to stay really focused on more than just the data centers. Really excited about those projects, but we have great industries that we're positioned in Iowa to capture. We're going to stay really focused on continuing to grow all sectors, but the data center projects that are coming to Cedar Rapids are, again, truly transformational.
Mr. Evans: Mike, the trucking industry is a harbinger for future economies. What do you see in 2025?
Mr. Gerdin: For the last two years, when I’ve come up here, it's been awful. It's been awful in 2023, and it was awful in 2024 but that's because it was so good for 2021 and 2022 because of COVID. When everybody was at home and not working, everyone decided, “I'm going to redo my bathroom, I'm going to do some new landscaping, I'm going to put on a deck, I'm going to do all these home improvement projects.” And everyone was online ordering and ordering. So that means we had plenty of stuff to move during 2021 and 2022. You got free money from the government, and everybody (was) spending it and investing. It was very, very good. But now 2023 and 2024 – not so good. Nobody's ordering anything. We had, during that time, rising interest rates. We had inflation. We had taxes going up, the money from the government went away. So nobody had as much money or the will to buy anything in 2023 and 2024. Luckily, I believe we've hit the bottom, and it is going to be better in 2025. I agree with Brent, in 2026 for sure. It’s been a rough slog for anybody in trucking or any type of transportation for the last two years, but we've hit the bottom. We're going to come back up.
Mr. Evans: Beth, would you, in layperson's terms, explain the revenue sharing issue to be adjudicated this year?
Ms. Goetz: It’s a really incredibly dynamic time in college athletics right now, and we've not experienced this type of change in the industry, certainly in my lifetime, because we're now running a significant business at the Division I level. But it's values-based, so not every decision we make has been on where we can generate the most revenue (or) get the most ROI. Revenue-sharing has been in lawsuits and certainly in commentary for student-athletes for a long time. As viewership on TV (and) ticket prices have risen across the country in many sports. athletes have been saying, when do we get our fair share of that? As a result of one of the dozens of lawsuits, we're down a path in which we think we finally found at least an opportunity to begin sharing some of those resources directly to student-athletes. As an industry, we were just really too slow to make some of those decisions on our own, and now the courts will be making those for us. So in the short term, we will essentially have a certain percentage of all revenue that's generated coming in – and we're really talking about those premier revenue sports at the highest level of Division I, football, men's basketball in particular, although there's some others that certainly drive revenue in our community, like women's basketball and wrestling – that revenue now will be be shared, should this settlement be approved, to the tune of about 22% with student-athletes across Division I, directly from the institutions, I might add.
Mr. Evans: Jason, workforce is a very important topic. Projected health care costs (are) rising rapidly. What is your leadership team doing to manage this seemingly intense problem?
Mr. Smith: An interesting statistic: health care costs from 2017 to 2024 are up 54%. So you think about the pressure that puts on us as employers. As we sit here as employers and certainly as individual consumers, we cannot rely on the health insurance companies to solve this problem for us. As an organization, both for our workforce as well as for our client base, there are four things that we're putting a lot of management towards right now. The first is, as you can appreciate, there's a lot of information out there, so how do we get better about using that information, data and analytics information to draw us to trends or information on better visibility to chronic issues? Chronic issues are generally a telltale indicator of looming health care claims down the road, which drive costs. So if we got better information, we can dig in on our workforce and help them be healthier, safer, more productive individuals, which is what we want anyway. There's some interesting things that are going on. We're pioneering in the industry right now, and we're helping claimants get access to physicians to help them guide decision-making with their primary care providers. So you think about when you have a health issue or a claim, how daunting that can be, how scary it can be. And imagine if you had a three-way conversation with a health care provider, a physician on the phone with you and obviously yourself, determining what's the best care, best place to go for value, cost, expertise. Third, we have to buy differently. Developing consortiums for employers, if you think about like-minded employers, and how can you collaborate (and) work together to innovate and create different strategies, different ideas and leverage buying power. And then fourth and finally is at the end of the day, we as individuals are the consumer. So the employees, the policy holders and our family members, we're the ones that are at the clinics or at the prescription counter. Educating these folks and putting power in their hands to be smart consumers drives down health care costs. (It’s) very frustrating for all of us, but we've got to recognize that the health insurance industry is not going to solve it for us. We've got to do something about it as employers.
Mr. Evans: May, two years ago on this stage, Lisa Barton, chief executive officer of Alliant Energy, committed the company to a responsible energy generation plan. Could you please comment on what you see as responsible energy generation?
As I think about our generation fleet, it's really about reliability. That's what responsible is, in my mind – providing reliable service in a safe manner for our customers. I have the opportunity to meet with our large industry [leaders] on a regular basis, many of you in this room, and the number one priority that is shared with me is “May, you’ve got to keep the lights on.” So we think about that generating fleet as making sure it delivers on those reliability requirements for our customers. And that really happens with diversification. We have wind, we have solar, we have fossil units. It’s making sure that we take care of what's on our system today and then add additional investments into the future as we see load growth, as we see changing dynamics in terms of technologies, adding the right investments at the right time, making sure that we've got a diverse mix. The sun's not going to shine every day and the wind's not going to blow every day, so we have to have that base load energy for our customers, continuing to evaluate the technologies that are out there. We've got several small batteries, for example, in our system right now that we're learning from, so when it's prime time for large-scale battery storage, we're ready to go. And in this community, especially, we've heard and seen headlines on the Duane Arnold nuclear center, and the thought of that potentially repowering and starting back up again. That's owned by NextEra. But I'm telling you, we're leaning into those conversations, because it's going to take every type of generating source to continue to power that reliable service that our customers are counting on, the ones that are on our system today and those that we're working to attract into our service territory.
Mr. Evans: Jason, several Iowa (insurance) companies have stopped writing business in Iowa due to catastrophe losses. What do you see in 2025 in terms of (property and casualty) coverage and the effect on premiums in both personal and commercial lines?
Mr. Smith: Here's an interesting data point for you. From 1980 to 2023, the number of $1 billion-plus weather related losses in the United States was 8.5 per year. From 2019 to 2023 that number jumped up to 21 $1 billion or greater weather-related losses. As of November 2024, we had 24. What’s happened already in the first 15 days of 2025? The (California) fires aren't out yet and they're talking about estimates of $250 to $275 billion of economic impact. $30 billion in insured losses, $10 billion in underinsured. That picture is pretty staggering, when you think about what we're all feeling as Iowans and really throughout the nation, whether it's our own auto or our business insurance … We've got this trend with weather. We've got serious pressures in various industries, social inflation-funded lawsuits that are going on there, $100 million, $150 million, $200 million judgments. These are catastrophic type issues. Distracted driving is a major challenge in both commercial auto and in private passenger. Because of the derecho, for example, and some of the floods and different losses, we've seen some pretty healthy rate increases the last handful of years. Expect some rate (increases) in 2025, but not nearly as dramatic or drastic as we've seen. We do expect rate increases to continue in personal lines, but we're seeing a downward trend in work health, in D&O (directors and officers), property (rates) are stable. We are seeing some improvement, or settling down, in Iowa from an insurance standpoint. To the points earlier about the weather-related issues and other things that are going on. It truly is a little bit of one day at a time, keep your eyes on the prize. The best advice I can give everybody is to focus on what you can control. Think about your safety programs. Think about your fire protection, think about your workforce. Think about how you can adjust your deductibles, of different things, because, you know, every dollar that the insurance company charges you, they're trying to pick their losses. They've got to cover their expenses. If you are doing some self insurance, you're able to at least remove that 30 to 40% insurance company cost to run their operation.
Mr. Evans: Brent, you talked about the soft ag economy. What have you done with your product to deal with that soft environment?
Mr. Cobb: We've been focused on different segments. We have customers that service the construction equipment market, so we're seeing more resilience in that particular segment, with (infrastructure) money that has yet to be spent, and people gearing up for more activity there. So we're going to garner more projects in that construction equipment space. In terms of data centers, we have a group of assemblies that we sell to a customer that ultimately sells into the data center market for backup generators. We quoted the project five or six years ago, never having any inkling of how big data centers would be five or six years later. So we're very focused on expanding our internal capacity to make those family of assemblies, as well as our supply chain. So really, the recipe has been looking other places, other than ag.