Josh Nelson says a growing number of Iowa farmers are tapping into the demand for local foods by growing vegetables, specialty beef or grapes.Earlier in the week, Josh Nelson was planting soybeans on his family’s farm near Belmond. But the next day, Nelson was planting green peppers, punching the seedlings through rows of weed-control plastic on his one-half-acre vegetable plot.

Nelson says he’s seeing more interest among row-crop and livestock farmers like himself in expanding beyond commodity agriculture, especially now with the growing consumer demand for local foods.

Down the gravel road, a neighbor has planted grapevines along a fence row. Several local farmers are growing aronia berries, a native fruit. And Nelson’s uncle is growing barley and hops, potentially to tap into the local craft beer scene.

“I feel like there are a lot of commodity guys interested (in local foods),” Nelson says. “Whether it’s grass-fed beef, locally raised beef, we’ve got guys in the area who are doing that. I see people putting up high tunnels (greenhouses).

“They’re trying different things because they...