In reference to the linked article about a return to the Dust Bowl days…
The Conservation Reserve Program’s (CRP) MAIN intention was to take crop land out of production so as to decrease grain production and thus raise commodity prices. It made sense to sell the program as a two-fer. The land set-aside contracts were for 10 yrs, which, imo was much better than the old Soviet Union “5-year plans”. And, a 10 yr contract will likely straddle the terms of a POTUS and not lock farmers too solidly into something where they were totally inflexible to significant market changes.
The CRP begin in 1985, at the end of Ronnie’s first term and the height of the “Farm Crisis”. The origins of the Farm Crisis date to TrickyDick’s second term where negotiations opened up the Soviet Union as a large market for our grains, especially wheat. USDA economist told farmers that it would be impossible to produce enough grain for the new market (China had also opened as a market for US commodities) and prices were only going up. Midwest farmers bulldozed out tree wind-breaks that often had been planted in the 30’s-40’s. Corn, beans, and wheat were planted “fence-row to fence-row”. Cropland prices were bid out the roof. Everyone borrowed money based on the inflated value of their cropland.
The bubble began to rapidly deflate when the Soviet Union invaded Afghanistan in December of 1979. Jimmy Carter’s response to the invasion (the Soviets intention was to prop up their proxy president) was to slap on a US grain embargo. As a result the farming economy dropped through the floor. Over the next 5-6 years farm foreclosures were about the only thing happening. Things were terrible, especially in the Midwest. Suicides were common in farming communities.
This was a period of major farm industry restructuring, or, I should say, the beginning of it. The ripples also affected the meat-packing and farm equipment sectors, and, combined with the effects of Reaganomics we were into a major deflationary cycle. Unions lost clout and members. Prior to ’79 a “typical” worker on the kill line was in the $18-22/hr. range, and they were all members of the Union. From ’79 on meat packing companies lowered their cost by busting the Unions–mostly by going bankrupt and reorganizing. Those $20/hr jobs were now available for $7-9/hr. Folks could no longer make it on one job and one income earner. It was the new normal in the Midwest that many people worked two jobs—and it wasn’t unusual to hold down three. The Farm Crisis affected more than just the crop and livestock producers; a receding tide lowers all boats.
The Farm Crisis is the origin of the meth epidemic.
Yep. Go back and read my last longish paragraph—especially this sentence;
“It was the new normal in the Midwest that many people worked two jobs—and it wasn’t unusual to hold down three.”
If you have to do that kind of schedule week in and week out you’re gonna need some of “momma’s little helper”, so to speak. Meth is cheap and easily produced from stuff you (used to be able to) buy at WalMart.
I began serious pig production in 1979. It was tough, but grain prices were low—and so were pig prices. ’80-81 were 0 profit years. ’82 was a GREAT profit year; paid lots of SEP tax. 1983 saw a major drought throughout all of the Midwest. ’83 took back all—and then some—that ’82 had given. The turning point in the pork industry was October of 1985 when the USDA Hogs and Pig Report showed a major drop in sow numbers. From ’86-95 I made a lot of money. The pig producer was in the driver’s seat because grain was cheap and pig numbers stayed relatively low. During that period a lot of crop acreage went into CRP, which was a sure way to have crop acreage income.
During that period of the Farm Crisis Midwest corn producers were looking for ways to get stored grain moved out of bins. The “alcohol mandate” resulted and ethanol plants began to spring up. By 2006 approx. 40% of the corn crop was being turned into fuel ethanol—IOW, corn was now being priced on the world oil market. In October 2007 the last of our sows rode the truck off our farm and became sausage and pizza toppings. The pork industry in the years since has restructured in such a way that it resembles more the poultry industry. 3-4 companies in the US control well over 90% of poultry production and processing. At this point in the pork industry I figure you could have a meeting in a 500 sq. ft. room that would comfortably seat the folks that control >90% of the pork production.