Overproduction Leads to Low Prices
Iowa Public Television
During World War I farmers increased production to meet the demands for food for the fighting troops. Many farmers invested their wartime profits in more land and more machinery with the thought of growing even more crops, but such plans did more harm then good. After the war, farmers were producing more than the American people could use and the price of farm goods dropped so low that many farmers couldn’t make enough money to pay off their huge debts. Corn, which had sold for 70 cents a bushel in the early ‘20s, dropped to 10 cents a bushel. Hogs, which used to bring in nine cents, only brought in three cents per pound. Some farmers found it was cheaper to burn their corn for fuel than to haul it to market. If they couldn’t sell enough to make mortgage payments, some farmers began to sell off their belongings. New machinery, that had hardly been used, had to be auctioned off before it was even paid for. On and on it went, until many farmers had to give up the entire farm. The banks and tax collectors wanted their money, but farmers didn’t have any to give. In 1924 alone more than 2,500 farms were lost in mortgage foreclosure actions.
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