They can breed a cow with half again as much beef as those raised by their grandfathers and grow 160 bushels of corn an acre instead of 80. Their revenues are many times what their parents dreamed of, and their land is worth five times what they paid for it. But America's farmers aren't making any money, and they can't afford to bring their children into the business. The reason is not that they are lousy farmers.
The Holiday Inn in Minot, N. Dak., has, for reasons only its owners fully understand, a Hawaiian theme. The desk clerk answers the phone "Aloha." The facilities include an Oahu Banquet Room, a Kona Kafe, and an Islander Bar that serves pina coladas and frozen strawberry daiquiris in the middle of winter. On this particular day, February 1, 1983, when the skies are gray and the temperature is hovering at 6 degrees F, the Holiday Inn marquee out front reads "Aloha PCA."
The sign is welcoming farmers and lenders who are members of the Minot Production Credit Association, the local branch of a credit organization established by the federal government in the 1930s to lend money to farmers and ranchers. The system's future is bound up with that of the farmers, and the farmers, everyone knows, are in trouble. The Minot PCA has invited its borrowers, the agricultural producers of the 16 surrounding counties, to a two-day seminar at the Holiday Inn to talk about how they are going to survive.
In the Hawaiian Ballroom, the farmers, who have driven in from places like Berthold (pop. 398; 20 miles away) and Williston (pop. 11,280; 135 miles away), are drinking coffee from Styrofoam cups and talking in musical accents that sound vaguely Scandinavian or Canadian about the mildness of the winter, the lack of snow on the road, the high school basketball game. Most of them are not talking about what has brought them together, which is that three out of four are not making a profit.
"I think we're going to drop some land," says one tiny, fuzzy-haired woman to another woman in the row in front of her. Her husband turns from the conversation he has been having with another fellow, and the woman says nothing more.
Here in the heart of America's Wheat Belt people don't go on about their troubles. Instead of complaining about the winter, natives joke that the 20-below-zero temperatures keep the riffraff away. "You don't find many people sleeping under bridges here," says one farmer.
He might have added that you don't find many bridges, either. The city of Minot is surrounded by vast, windswept, mostly treeless plains where farmers grow wheat, barley, rye, flax, and oats. The land is fertile enough, and unlike much of the country's farmland, in little danger of being encroached upon by urban sprawl. (The population of the entire state is slightly less than that of San Francisco.) But these northern plains are more susceptible than most areas to hail, summer frost, drought, or early snow, and the average net income per farm in North Dakota is among the nation's lowest. Still, the farmers stay to plant the land their parents planted.
These are not the so-called "hobby farmers," the city people who have retired from urban life to plant a 40-acre garden and raise a couple of horses and cows. They are not the political activists of the American Agriculture Movement who chant about an international conspiracy against U.S. farmers. This is a crowd of 75 or so mainstream producers of wheat and barley and sunflower seeds and cattle and a few hogs, a segment of the top 10% of farmers who produce about 65% of the food for the United States.
These people are second- or third- or fourth-generation farmers for the most part, with assets of $30,000 to $4 million. They have farmed through drought, early frosts, world wars, and a patchwork of government price supports, set-aside subsidies, wavering export policies, and misguided tax breaks. They still have their farms, and they have fed, clothed, and educated their families. But after 20 to 40 years of farming, when they would like to bring their sons or daughters into the operation, they find they are not making any money. And they are sitting, husbands and wives, like Marlys Haugeberg and her husband Carl in the Hawaiian Ballroom at the Minot Holiday Inn to learn what, if anything, they can do about it. "It's a terrible mess the government has gotten us into," says Marlys.
What she means, explains Carl Haugeberg, who is sitting beside her puffing on one of six pipes he has laid out on the table in front of him, is not just the government embargoes against shipping grain to the Soviet Union, although they were a terrible blow, but a public policy of cheap food. U.S. consumers spend about 16% of their disposable income on food, but residents of Europe and the Far East spend significantly more. Historically, U.S. farmers have been tied by public policy to narrow profit margins, and in response they became production oriented.
For years, the price of U.S. land, the weather in the Farm Belt, the openness of the U.S. market, the land grant schools, and even the transportation system provided a relatively comfortable environment for the U.S. farmer. Even if aftertax profits of 6% to 8% were the best farmers could expect, many made a good living. Some even got rich.
Carl Haugeberg started farming in the good old days. He took out his first operating loan on his name. He owned no land of his own and had no capital, but in the 1950s farmers and lenders believed in a rosy future for agriculture, and the local bank lent the young man the money he needed to rent 640 acres and farm it. It was a heavy debt load for a 20 year old to undertake, but Carl Haugeberg knew he wanted to farm, and he chose an option that doesn't exist for his three sons. In exchange for labor at his brother-in-law's place he used that farm's equipment. The arrangement enabled him to keep down his overhead.
He raised a little livestock, and with hard work, strong production skills, and thrift, he was able to make enough money to support Marlys, whom he married shortly after striking out on his own, and the three sons who soon followed. He also set aside enough money to buy his own land. There were good years and bad years, cycles of dry spells and low prices, but profits were strong enough in the good years to tide them and their neighbors through the bad.
