Farmers in north central Kansas spent their Fourth of July weekend finishing up the 1977 winter wheat harvest amid widespread fears that the relative prosperity of the last five years is coming to an end.

A chart on the wall of Don Swisher's office at the headquarters of the Farmway Cooperative here explains why both farmers and townpeople are wary about the economic future.

Since October, 1975, wheat prices have fallen steadily, above $4 a bushel to less than half that figure. The local price of wheat today is $1.92 a bushel, less than third of the $5.86 record reached in February, 1974, in the wake of the huge grain sales to the Soviet Union in 1972.

But while the prices get for their products have been falling, the price they must pay for the items they use in their operations has been rising rapidly.

For example, the combines used to harvest winter - the grain used in breadmaking - now cost about $50,000 each, up from $30,000 just a couple of years ago. The price of diesel fuel to run the combine's trucks and tractors has risen three cents during the last month here.

Farmers are responding to the tightening financial situation in two ways they are cutting back on their spending and they are turning once more, to the government for assistance.

The historically high prices for grains in recent years gave many farmers the opportunity to expand their operation and improve the machinery they use. The result is that they are in a position to postpone major purchases.

C.V. (Red) Hartman, who farms 2,100 acres east of Beloit is a case in point. He invested last fall in two new combines.

"I'm glad we bought the machinery when we did. But I can't see the future in buying any more," he said. "We could go ten years and not have to buy any machinery."

Tom Mioritz, who along with his brother runs Moritz Implement Co., a large International Harvester dealer ship here, said combine sales before harvests were down by half over last year. Moritz believes the worst is yet to come.

"We feel business is definitely going to go down. Its going to be tough," he said. "I've been here about 20 years. It appears to me like this is going to be the roughest."

The high prices, triggered by unprecedented export demand, routed the government out of its role as the principle market for American grain. But now the foreign demand is slack, in several parts of the world, including the United States. The result is the current low prices. Since last fall, grain farmers have been increasingly using the government loans to finance their operations, using their wheat as coilateral. The farmers can reacquire the grain by paying off the loan if market prices rise above the loan level. If that does not happen, the government keeps the crop.

Swisher, Farmways grain manager, said about one-third of the grain harvested in 1976 was placed under government loans. In addition, farmers are able to get loans and storage payments on grain they keep in their own bins.

The expectation is that the loan program will be used even more heavily this year. Swisher said Farmway has purchased only three per cent of the 1977 harvest up to now.

"We're going to have to go 100 per cent on the loan this year," said Max Eberle, who farms near Glenelder just west of Beloit.

Use of the loan program also will be affected by the outcome of the new farm bill now pending in Congress. Increases in loan prices, making the program even more attractive compared to the private market, are almost certain.

But farmers and others also seem sure that the loan program will have a price tag in the form of mandated wheat acreage reductions.

Dr. C. Edward Harshbarger, agricultural economist with the Federal Reserve Bank of Kansas City, called a set-aside program "almost a certainty."

The Agriculture Department already has begun to collect statistics on 1977 acreage that would be used in computing the amount of land that could be planted in wheat for harvest in 1978 if there are acreage controls. A decision on the program is expected about Aug. 1.

Although wheat planning usually does not begin in Kansas until after Sept. 1, Eberle and others in Mitchell County already have begun the process of preparing the soil for next year's crop.

Hartman said, "I don't know why they don't come out with it (the program) before Aug. 1. Farmers are already starting to work their grounds."

There is almost universal agreement that the current financial crunch is most pressing on younger farmers who tried to establish themselves - making large capitalcommitments in land and machinery - in recent years.