The Iowa Farm Bureau Federation, the country’s most profitable farm bureau, influences most aspects of agricultural policy in the state. One profitable loan underscores how large and complex the organization has become.

By Sky Chadde and Eli Hoff, Investigate Midwest; Mark Ossolinski, Watchdog Writers Group | October 7, 2021

This story is a collaboration between Investigate Midwest and Watchdog Writers Group.

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In May, senior executives at the Iowa Farm Bureau Federation finalized a little-noticed financial maneuver that could boost their income for years to come. While a nonprofit, the Farm Bureau owned a highly profitable, publicly traded insurance business, FBL Financial Group. For nearly a year, the executives — whose incomes depended on FBL — had wanted to privatize the company.

But the move spurred several lawsuits, with a major investor publicly accusing the Farm Bureau of low-balling the remaining shareholders it was attempting to buy out. To settle, the Farm Bureau paid investors more, and the deal closed this spring.

If history is any indication, the move was a smart one, at least for Farm Bureau leaders. A review of public filings, depositions and internal memos show Farm Bureau leaders have benefitted for years from the nonprofit’s majority ownership of the insurance company. The story of FBL also highlights the complicated nature of the modern Iowa Farm Bureau, and the potential conflicts of interest at the heart of the nonprofit organization that sits atop multiple for-profit companies.


The political activities of farm bureaus at the state and federal level are well-documented. But the scope of the Iowa Farm Bureau’s sprawling financial operations is less understood. Through expanded investments, it has reaped massive profits. Over the past decade, its total revenue has increased about 200%. And, lately, about 80% of it comes from investments, according to tax documents. No other farm bureau even approaches that ratio.

The Iowa Farm Bureau recently reported total revenue of about $100 million, the most of any farm bureau by far and nearly three times that of the influential national umbrella group, the American Farm Bureau Federation. Today its investment portfolio is worth more than a billion dollars. Executive compensation is in the high six figures.

The Farm Bureau has reaped these gains while many farmers have suffered through expensive seed and fertilizer prices but low sale prices for their products. The bureau’s stated mission is to provide a “vibrant future” to farm families, but it has been criticized for piling up cash while Iowa farmers struggle. In recent years, Iowa farmers have suffered through low-to-negative profit margins, according to Iowa State University research reviewing 1999 to 2015. And, in the 2010s, Iowa continued its trend of losing farms as operator income dropped 21%, according to U.S. Department of Agriculture data.

“By every metric, they’ve failed their membership,” said Austin Frerick, a native Iowan who has studied the Farm Bureau and been a vocal critic. In the 2018 Congressional midterms, he ran as a Democratic. “The economic situation is getting worse for farmers in Iowa, and (it) keeps getting bigger, and that’s the crux. They are not what their mission states. They are actually working against it.”

FBL, the insurance company, is the engine behind much of the Farm Bureau’s profits. It also illustrates the inherent tension within the Farm Bureau’s for-profit and nonprofit entities. A previously unreported loan to FBL, extended in 2008, drives to the heart of these tensions.

In 2008, the Iowa Farm Bureau feared that FBL was poised to fail. That fall, the insurer’s stock was cratering in the midst of the global financial crisis. This posed a personal problem for senior Farm Bureau executives — they were compensated by the insurance business. They took action. As the stock price fell, according to court records, the Farm Bureau loaned its struggling subsidiary $25 million.

Transactions between related entities within such an organization are often scrutinized because of their potential for malfeasance. They are not problematic in and of themselves, but it is important that organizations impose strict controls, such as conflict of interest policies and the public reporting of insider transactions. This helps ensure that nonprofit leaders don’t use supposedly independent entities to enrich themselves or execute sweetheart deals like loans with below-market interest rates.

The 2008 loan Farm Bureau extended to FBL could raise red flags among regulators if it wasn’t properly controlled or reported. Several experts said the loan was questionable because the Farm Bureau and FBL share executives and the loan was not reported in financial filings. (Now that FBL is private, it’s not subject to the same reporting requirements imposed on publicly traded businesses.)

When asked about the loan, Iowa Farm Bureau spokesman Andrew Wheeler said the bureau “has never directly participated in a loan to FBL Financial Group, Inc. Any information to the contrary would be incorrect or out of context.” Wheeler did not return multiple requests for clarification over the past three months.

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The Farm Bureau also did not respond to a list of detailed questions about the loan or parts of this story, such as criticism about the disparity between its finances and those of many Iowa farmers. In its tax documents, the Farm Bureau said it does not make its conflict of interest policies available publicly. A committee reviews potential conflicts of interest each year and makes judgments, according to its tax forms.

Contribute to our reporting. Do you have information on how the Iowa Farm Bureau, or another farm bureau, handles its financial affairs? We’d love to hear from you. Email sky.chadde