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American agriculture has undergone dramatic changes over the last few years. During the 1960s and early 1970s, it struggled along under surplus capacity relative to demand and prices that were not acceptable to farmers. Farm prices and income were supported by a complex of federal programs emphasizing direct payments for withholding land from production, nonrecourse commodity loans, and heavily subsidized international food aid. This situation of surplus capacity and depressed prices and incomes was quickly inverted, however, as poor weather and crop shortfalls in Eastern Europe and other world regions, along with changes in certain other variables, translated into a huge increase in demand for U.S. grain exports. This demand increment soon threaded through the agribusiness sector and rapidly translated into much higher farm prices and income, consumer food costs, and land values.
Center for Agricultural and Rural Development, Iowa State University
Agricultural and Resource Economics | Agricultural Economics | Natural Resources Management and Policy | Rural Sociology
Center for Agricultural and Rural Development, Iowa State University; Reynolds, Thomas M.; Heady, Earl O.; and Mitchell, Donald O., "Alternative futures for American agricultural structure, policies, income, employment, and exports: a recursive simulation" (1975). CARD Reports. 60.