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Iowa Makes Fertile Battleground for Obama, Romney

Stocks in this article: DE

It's almost impossible to speak with Iowans without them mentioning "ag," or agriculture.

Corn production reached 2.42 billion bushels in 2009, dipped to 2.15 billion bushels in 2010, and jumped to 2.36 billion by 2011. Iowa remains the no. 1 producer of U.S. corn as it beats Illinois production by 409.6 million bushels, according to the United States Department of Agriculture.

If it seems odd to single out corn, consider the fact that Iowa creates about 30% of all ethanol in the United States -- an industry that iowacorn.com says accounts for some $13 billion of Iowa's GDP.

The state is also the U.S. king of soybeans, producing 466.1 million bushels in 2011.

The production of Iowa manufacturers has soared during the four years of Obama's term thanks to a boom in exports.

"Between our agricultural trade and our manufacturing trade -- both playing upon foreign markets -- that's been big for us; so we've had kind of a confluence of events there," says John Stineman, executive director of the Iowa Chamber Alliance and Steve Forbes' 2000 Iowa caucus campaign manager.

A relatively weak dollar since the crisis has improved the value proposition for manufacturers to sell goods made in Iowa abroad. For example, Deere & Co. (DE - Get Report) produces John Deere agricultural tractors and engines for manufacturer use in Waterloo, Iowa, and it manufactures self-propelled sprayers, tillage equipment and grain drills in Des Moines.

In the past few years John Deere equipment produced in Iowa benefited greatly as world commodity prices soared, specifically a spike in wheat prices from severe drought in Russia , which in turn stoked demand for agricultural equipment.

Financial services and biotech have also proven to be resilient sectors in the Hawkeye State, where just six electoral votes are up for grabs but where two giant politicians have serious boots on the ground.

Obama's campaign has 14 offices, five regional directors and some 14 full-time staff running the statewide operation, according to p2012.com -- they have been establishing a grassroots presence since well before the GOP Iowa caucuses. Romney's campaign has only recently started to ramp up its general election presence, but the presumed Republican nominee mad a pit stop in the state last month signaling his campaign's belief that Iowa could be attainable in November.

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