Barn swallows have begun congregating on electric lines as daylight hours shorten, and goldenrod begins to show its color. Farmers are hoping for timely rains to allow soybean fields to reach their potential.
Corn in southern Minnesota seems far enough along to reach maturity unless an early September killing frost ends the growing season. The cash price for corn delivered Aug. 31 at a nearby elevator was $2.62 per bushel. The soybean cash price for the same delivery date was $8.21. Most would agree that the listed prices are disappointing, but are partially offset by what promises to be bumper crops.
Looking back to the 1960s, corn did not reach above $2 per bushel until the 1970s. Later in the decade, the price sneaked above $4 for a brief time before crashing below $2 per bushel in the depths of the 1980s farm depression. The so-called “golden age’’ of agriculture saw prices above $7 per bushel.
Soybeans broadly followed the same trend lines, though the market had a steeper climb from below $4 per bushel in the early 1970s.
It can — with justification — be said that current commodity prices are remarkably strong given the uncertainty that bedevils the world. Although China has recently announced huge grain purchases, the United States and the communist nation continue to escalate their feud that involves tit-for-tat responses.
Dad dealt with low commodity prices throughout his farming career. Like nearly all others, he was caught flatfooted in July 1972 when rules governing overseas sales of grain and reporting of those sales were virtually nonexistent. The secretly negotiated transaction caught both farmers and consumers off-guard.
Grain buyers purchased wheat from farmers for $1.68 in July ’72 and the price increased to $3 by May 1973. Because few outside the government knew about the potential sale, most wheat growers missed out on the price increase.
The sale during the White House administration of Richard Nixon came to be called the “great grain robbery.’’
The Soviet Union, which was dealing with weather and administrative problems in 1971 and 1972 that caused grain shortages, made a 10 million ton buy of mostly corn and wheat from the United States. The Soviets purchased what amounted to 25% of all wheat harvested in the U.S. The Soviets purchased the grain on credit, which was much greater than the nation’s credit limit. The U.S. government subsidized the sale to the tune of $300 million.
Nixon’s negotiators failed to grasp that grain supplies worldwide had reached dangerously low levels. The sale’s immediate impact was to increase food prices worldwide by 30% and in some cases, 50%.
Consumers bitterly complained about increased bread prices, and Congress, led by Sen. Henry Jackson of Washington, held hearings to learn about what U.S. officials and grain companies knew about the sale before the public did.
Jackson charged that claims made by government officials that they didn’t know about the pending sale didn’t hold water and were “incredibly negligent.’’ If they did know and hid the information, as the senator suspected, they had deliberately allowed farmers to sell their grain to grain companies at artificially low prices.
Agriculture Secretary Earl Butz, quoted in a United Press International article at the time, said Jackson’s investigation wasn’t warranted. Butz, who would later be forced to resign because of controversial jokes he told, informed Congress that the sale “was good for all citizens’’ and improved relations between the two nations.
The investigation led Congress to pass several reforms, including creation of an export sales reporting system that required large transactions to be immediately reported to the U.S. Department of Agriculture.
My dad, and many other farmers, remained convinced that the secret sale of grain to the Soviet Union amounted to highway robbery. Many consumers who saw their grocery bills skyrocket agreed with that.
Mychal Wilmes is the retired managing editor of Agri News. He lives in West Concord, Minn., with his wife, Kathy.