Iowa grocers brace for SNAP dollars to cross state lines
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Iowa grocers are watching to see whether new SNAP restrictions send shoppers — and tens of millions of federal benefit dollars each month — across state lines.
Why it matters: More than 260,000 Iowans receive the federal food assistance, and their buying power could reshape grocery shopping patterns and local economies, especially in border communities.
Catch up quick: This month, Iowa began enforcing a new SNAP rule that limits what recipients can buy with their benefits, eliminating sugary drinks, candy, vitamins and some in-store prepared foods.
- The rule was approved by federal officials after a waiver request from Gov. Kim Reynolds after the Legislature did not advance bills to restrict SNAP's use.
- At least 17 other states ban SNAP benefits for junk foods.
Yes, but: Per federal regulations, all SNAP EBT cards must be usable in every state and U.S. territory.
- Even before this month's new rules, about 10% of all Iowa SNAP benefits were used out of state, Danielle Sample, a spokesperson for the Iowa Department of Health and Human Services (HHS), tells Axios.
What they're saying: Iowa's new rules won't make healthy food more affordable but will confuse SNAP users and increase stigma at checkout, and could drive economic losses for businesses and families across the state, according to the Washington, D.C.-based Food Research & Action Center (FRAC).
- Nearly 88,000 Iowans who receive SNAP benefits live in border counties, with $15 million in SNAP benefits that generate roughly $23 million in local economic activity via additional sales and services associated with the benefits, per FRAC.
Zoom in: Cross-border shopping "is something we're definitely concerned about," especially for towns near state lines, Stephanie Johnson, group vice president for government relations at the National Grocers Association, tells Axios.
- Fareway spokesperson Elias Johnson and Hy-Vee spokesperson Tina Potthoff tell Axios they are monitoring the impact but it's too early to assess shifts in consumer behavior.
The intrigue: Groups like the Iowa Hunger Coalition and the Iowa Catholic Conference registered opposition to the Iowa bill last year that sought federal permission to limit SNAP purchases.
- The Iowa Healthiest State Initiative — which administers a "Double Up Food Bucks" program that would have received $1 million under the unsuccessful bill — registered support for it.
What's next: HHS is conducting a before-and-after survey to assess how the waiver affects dietary choices.
- A timeline for the review or an indication of whether it may evaluate the economic effects of the changes was not included in a recent presentation about the review.