Agriculture continues to survive booms and busts
Boom and bust cycles have occurred throughout the history of U.S. agriculture, all the way back to Roanoke.
American agriculture can be divided into well-defined epics. The beginning starts with the failure of the Roanoke Colony in 1585, which was abandoned due in part to food shortages and failed relationships with the native people.
Successful colonies followed and, with it, a rush to western lands. Congress attempted to pass its first homestead act in 1846, but it was defeated by southern interests who feared that encouraging more farms and settlements in the west would lead to more slavery restrictions.
The Homestead Act of 1862 became law and threw open lands west of the Mississippi River to settlement. Under its provisions, applicants could take ownership of public land. The act gave away 160 million acres. For a small fee, homesteaders were given 160 acres in returning for working the land and building a homestead over a five-year period.
What was remarkable about the act was women, free slaves and yet-to-be-naturalized U.S. citizens were eligible. The Dakota territory immensely benefited from the legislation, as did other areas, as hundreds of thousands of people headed west to stake claims.
The fertile land reduced fears that the nation couldn’t produce enough food for its rapidly expanding population. Many homesteaders lived a hard scrabble existence, made worse by monopolistic railroad practices, unfair market manipulation, and weather disasters that caused a financial depression in the 1880s.
Farm organizers responded with a cooperative movement, which met stiff opposition because it was feared that it was a step toward European socialism.
The arrival of the steam engine was a huge step forward among Dakota’s small grain producers. For its part, Minnesota was the king of wheat production until disease and reduced yields caused farmers to switch to other crops.
A golden age blossomed from 1914-18, when World War I sparked increased food demand. Prices fell apart in the war’s aftermath and while the stock market boomed in the Roaring '20s, many farmers were bankrupted.
The stock market crash of October 1929 ended the party, and desperation followed. Livestock was worth less than the cost of bringing animals to market, and fruit and vegetables rotted in fields.
For the first time, the federal government launched a massive intervention in agriculture, which in one form or another continues to this day through both Republican and Democratic White House administrations. Despite efforts to control production by U.S. Department of Agriculture secretaries Ezra Taft Benson and Orville Freeman, the farm economy struggled into the 1960s.
Farm-level activism was spurred into action. The National Farmers Organization, which didn’t involve itself in government policy, launched a commodity withholding action in 1962 to raise prices and demonstrate farmers’ power of production. The NFO thought that farmers could unite and that if enough of any commodity was withheld from market, processors would be forced to negotiate, and that consumers would support paying a fraction more for food.
In some instances, those who brought commodities to market were met with resistance. Some who supported the withholding action tossed tire-puncturing nails on the payment to disable trunks and a few drivers were physically threatened. NFO’s action drew national attention but did not broadly affect commodity prices.
The economic struggles of the 1960s gave away to rebirth in the early 1970s when the Soviet Union purchased U.S. grain in never-before-seen amounts. Grain prices escalated with inflation, and President Richard Nixon reacted by slapping price and wage control on the U.S. economy.
The move stalled commodity markets and the situation worsened when President Jimmy Carter issued a grain embargo against the Soviet Union for its invasion of Afghanistan.
The situation reached its climax in the 1980s, when land prices tumbled, and many farmers could not keep current on mortgages. The great farm depression renewed an activism that demanded a foreclosure moratorium, among other actions.
Agriculture has always endured boom and bust cycles. The biggest difference between the past and present is that there are far fewer farmers today.
Mychal Wilmes is the retired managing editor of Agri News. He lives in West Concord, Minn., with his wife, Kathy.