Corn, wheat and soybean prices collapsed when the nation's grain futures markets reopened yesterday after a two-day, government-ordered holiday.
Prices plummeted by the limits permitted by grain market rules -- 10 cents a bushel for corn. 20 cents for wheat, 30 cents for soybeans.
Millions of bushels of grain were offered for sale, but there were few buyers. The wheat pits of the Chicago Board of Trade handled less than 10 percent of the usual day's volume.
Grain elevators across the Midwest did little business, while the grain belt struggled to fathom the full impact of President Carter's decision to slash grain exports to the Soviet Union.
Plummeting prices indicated the administration's steps to offset the loss of sales of 17 million tons of grain to the Soviets were inadequate, farmers and their friends complained.
The International Longshoremen's Association decision to refuse to load or unload any ships bound for the U.S.S.R. added to the downward pressure on prices market observers said.
At what has become the Department of Agriculture's daily briefing on graian, Undersecretary Dale Hathaway said the administration has not decided yet whether to offer federal aid to grain exporters whose shipments to Russia were left on the docks by the longshoremen.
Agriculture Department officials said it will probably be next week before they have worked out the mechanical details of the government's plan to buy up the grain the Soviets were to have purchased.
Howard Hjort, the department's chief economist, pledged that grain exporters will not make windfall profits from the government bailout.
"We are not going to permit profits on those contracts," he said. "If there are any profits in those contracts we're going to take them out."
Later in the day, agriculture officials released new estimates of the nation's grain exports this year, projecting they will fall from 109.2 million metric tons to 98 million tons.
The agriculture department predicted that even without the Russian sales, corn prices this year will average $2.25 to $2.55 a bushel, up from last year's $2.20, and wheat will sell for from $3.60 to $3.90, up from $2.94. -- Neither buying up the Russian-bound grain to keep it from flooding the market, nor the higher crop loan rates announced Tuesday by the administration will make up for the farmers' loss of purchasing power, administration critics complained.
"It's entirely inadequate to protect farm income," said Jerry Rees, executive vice president of the National Wheat Growers Association. "it looks to us like they protected the grain traders -- which we don't object to -- but that protection should be extended to everyone."
The agriculture department raised the amount it will loan farmers against their wheat crop from 2.35 a bushel to 2.50, but that is far below last week's market price of 3.80 a bushel, he noted.
Announcing that militant farmers would return to Washington Feb. 16 -- but without their tractors -- Marvin Meek of the American Agricultural Movement said loan prices ought to be 30 to 40 percent higher than those set by the agriculture department.
"I don't think anybody is paying much attention to the loan rate changes," commented Ovel Johnsrud, who runs the grain department of Iowa's biggest cooperative, Agri-Industries.
He said Agri-Industries 300 local grain elevators "bought very little" yesterday. "I don't think farmers are selling anything."
Johnsrud said the biggest difficulty in the corn market is the congestion in grain terminals caused by the cancellation of sales of corn that was already on trains and barges bound for terminal ports.
Until the government begins buying up the Soviet export contracts and getting the grain out of the terminals, corn markets will be chaotic, he warned.
Wheat prices will be depressed until the government finds a way to get rid of the Soviet shipments it plans to buy, said Morton Susland, editor of Milling and Baking News, the flour industry's newspaper.
He said the drop in wheat prices indicates, "There was a tremendous misjudgment of what this means for farm income."
Agriculture department claims that recent steps will protect farmers from loss, "are like whistling past the graveyard," added Susland in a telephone interview from Kansas City.
In Washington, the administration's increase in crop loan rates was denounced by Rep. Thomas Foley, D-Wash., chairman of the powerful house agriculture committe.
"Totally inadequate," said Foley, whose committee will hold hearings on the Soviet embargo on Jan. 29. Committee staff members said farm state Democrats are almost unanimously opposed to both the embargo and the steps taken to mitigate its effect on farmers.
Republicans were even more critical. Sen. Richard Lugar (R-Ind.), a member of the Senate agriculture committee, said he will ask congress to overturn the president's embargo.
Agriculture department attorneys said it was unclear whether the law under which President Carter ordered the reduction in sales to the USSR provided for Congress to override the decision.
The administration's efforts to prop up farm prices were critized by Robert Wilmouth, president of the Chicago Board of Trade.
"The market told you that was not sufficient, based on what happened this morning." said Wilmouth.
Even before the nation's biggest commodity market opened, prices for soybeans dropped the limit permitted by the exchange.
The market traditionally begins with a bell at 9:15 a.m., but before the bell could ring anxious soybean traders shouted sell orders.