OPINION In the late 1920s the federal government understood healthy farm economies make our country stronger. The agriculture-parity concept was created to ensure farmers received fair prices for their back-breaking work.
The first effort was vetoed by President Calvin Coolidge. But then the Great Depression caused farmers to go broke as their purchasing power declined year after year. Finally the Agricultural Adjustment Act of 1933 contained legislation to restore farm prices back to 1910-1914 levels, a period of great prosperity for farmers.
In 1941 the federal government took a step further, creating additional ag parity with its War Powers Act. The Steagall Amendment guaranteed crop prices at a 90 percent level of average farm-commodity prices that occurred between 1910 and 1914. Inflation was computed into the calculations. Because of World War II many parts of the globe were in food crisis. The United States put into place commodity-price supports to ensure America and our allies would not go hungry. Because of that rational decision U.S. farmers became profitable so they could remain on the land, ensuring we had enough food to win the war. The Steagall Amendment was written to expire just two years after WWII but the idea of parity lasted until the Truman administration.
When President Dwight D. Eisenhower left office he warned people about the military-industrial complex. Unfortunately he couldn’t have foreseen the creation of the current agricultural-industrial complex. After parity was largely removed from the nation’s agricultural policy, farmers have increasingly felt economic market pressure created by large multinational food-processing corporations. The unchecked concentration of ag companies has increased reduced-price market pressure. An example of that is the fact that just four companies process 85 percent of cattle in the United States.
What parity really boils down to is paying producers what the true value of their commodities are, incorporating inflation costs to keep farmers profitable. If we look at historical inflation rates, $1 in 1910 was worth $22.95 in 2010. That same year – 1910 – a bushel of wheat was worth $1. That means the 2010 value of a bushel of wheat should be $22.95. But in January 2010 the price of wheat was only $5.69. That was a far cry from the rate of inflation.
We can also look at farmer income through the lens of income per acre, adjusted for inflation. Even when we use production per acre, it still doesn’t make sense for farmers. In 1910 farmers harvested 12.4 bushels per acre; in 2010 it was 45 bushels per acre. If we take the acre value in 1910, then 1 acre produced $12.40. The price for wheat in Kansas was $4.40. That equals $198 per acre. Using inflation, that $12.40 per acre should have been $284.62 in 2010. That demonstrates how the American farmer is falling behind the rest of society economically. I am not even going to mention the increasing input costs.
To put it simply, farmers are being left behind with our current system of industrial agriculture. Family farms are being squeezed out of business. Producers must come together and spotlight dwindling rural-economic conditions to our government leaders. And emphasize the truth of what is going on within our food system. If the United States wants to continue to have excellent-quality and reliable food supplies, then we must make family farms truly profitable.
This is an original article written for Agri-View, a Lee Enterprises agricultural publication based in Madison, Wisconsin. Visit AgriView.com for more information.
Bruce Shultz
Bruce and Wendy Shultz operate a cow-calf ranch near Raynesford, Montana; they’ve been running the ranch full-time since 2000. The two have been married for 32 years, and have two grown children who still help with haying as well as during big cow-working days like branding and pregnancy testing. Bruce Shultz was in 2020 elected National Farmers Organization vice-president, having served as national director for Montana for the three previous years. The couple have been National Farmers Organization members since 1994, when they bought their first cows to run with her parents on the ranch. They are the fourth generation operating the ranch in her family.
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Bruce Shultz
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Family farms being left behind | Business | agupdate.com – AgUpdate
