About this time last year, broad-shouldered Texan Gerald McCathern led 200 of his fellow farmers of the American Agricultural Movement into a tractorcade assault on Washington, demanding government action to help them keep up with inflation.
McCathern is expected to return this winter. So is his son, Michael, wheat farmer Russell Grider of Floyd, N.M., Ted Lietzke of DeWitt, Mich., and scores of other farmers who say they are still angry despite good prices on their crops last year.
"Farm prices are up, but our costs have also skyrocketed," McCathern said. "Fuel has just gone out of sight . . . We just want to keep up with the rest of the nation as far as inflation goes."
According to Michael McCathern, the AAM plans to hold its first organized national convention in Washington during the middle of February, and its members will alcohol-powered cars and pickups and leave the tractor trek and taffic tie-ups behind. They intend to illustrate their frustration over their -- and perhaps everyone's -- greatest enemy, which is rising fuel costs. They also said they plan to press for government assistance in entering the alcohol-fuels industry, as well as providing input in Congress' attempt at new farm legislation this session, McCathern said.
Well, if some of the nation's 6.5 million farmers though the last couple of years were bad, they should brace themselves for the 1980s, economists are saying. Despite heavy demand from foreign countries for American agricultural products, prices of fuel, fertilizer and other production needs either just will keep up with inflation or surpass it. At the same time, weak economic conditions worldwide are expected to keep farm revenues low.
"The total demand for farm output will expand more from foreign than from domestic sources in the 1980s," said Luther Tweeten of Oklahoma State University during a 1980 agricultural outlook conference in November. "Foreign demand is volatile and hard to predict . . . Energy plays a key role in future demand."
And the uncertainly and changes in government farm policies as a result of tensions with the Soviet Union are expected to add to the farmer's fervor, McCathern said. The administration's decision to buy the grain meant for the Soviets and store it "acts as a depressant on the market," McCathern said. "With abundant crops this year, you have and enormous surplus. Until it's dumped in the ocean or completely out of the picture, it's going to be considered (excess) supply."
In addition, food prices for consumers are expected to remain high during this decade.
Although both farm income and asset values increased in 1979, farm income could decline sharply this year, particularly in the second half, economists said. That slump, however, may be concentrated only in hogs and poultry. Net farm income for 1979 was estimated at $30 billion to $32 billion, which is $2 billion to $4 billion above 1978 levels, economists said. In addition, off-farm income is not expected to offset the expected drop in farm income.
"Although forecasts at this time are very tentative, small gains in gross farm receipts coupled with another big rise in production expenses could mean a substantial decline in net income -- perhaps by one-fifth," the Agriculture Department said. "When measured in constant 1967 dollars, the income expected for 1980 could be below the 1976-77 level and perhaps the lowest of the entire post-World War II period."
"Cash receipts from sales of a record crop and near-record livestock production in 1979 are increasing by more than $16 billion, while production expenses will be about $15 billion," the Agriculture Department predicted.
One factor that strengthened 1979 farm income was the relatively strong crop prices despite record production. This was largely the result of continued demand by foreign countries for American farm products. The export of agricultural products has been increasing during the past several years, and that trend is expected to continue.
Another reason for strong farm income last year was the return in the cattle cycle toward herd rebuilding, which led to higher beef prices. The first half of the year also was good for hog and poultry producers, but output increased so much in the second half that prices dropped sharply.
"Livestock prices, particularly for hogs and poultry, are expected to continue under pressure in 1980," the Agriculture Department said.
In the 1960s, the main issues concerning farmers were excess supply, according to J. Dawson Ahalt, a USDA economist. "We were producing more than farmers could sell," he said.
In the 1970s, the demand abroad for American crops began as citizens of poorer countries, whose income began to rise, started pressuring their governments to upgrade their diets, Ahalt said. At the same time, high-income countries cut back slightly in consumption.
During the 1980s, high-income countries will continue to reduce consumption, while Americans' dependence on fast foods will help keep up the demand for meat. Ahalt said. The cost of energy will keep food costs up, in line generally with inflation.
What does all this eman for farmers? "I am worried about all their costs going up," Ahalt said. "Farmers who own their own land will be able to do relatively well. It will be difficult for young people to get started."
Farm values rose about 16 percent last year, but are expected to rise slower this year if farm income declines and if interest rates continue at high levels.
For the 1980s, economists from the USDA, Oklahoma State University and the University of Iowa predict:
Reduction in world grain stocks from mid-1979 to mid-1980, but grain supplies are more than adequate to satisfy the world consumption requirement, and oilseed stocks will be larger next fall than this year.
Most of the world's beef and veal producers, who have been in beef cattle inventory liquidation since the mid-1970s, will increase production into the mid-1980s unless something unusual occurs.
World production and consumption of poultry in the early to mid-1980s also will increase.
Dairy producers will continue to do well, particularly because they have price-support programs that keep their prices up and there is a demand for cheese as a nonmeat protein.
Poultry production may be cut back because it has overexpanded; however, prices may not come down. "Chicken can't get much cheaper," one economist said.
Egg prices may be slightly higher, but the outlook is cloudy because many consumers have stopped buying eggs over concerns of high cholesterol content.
Citrus fruits should be a good buy. So should vegetables except that they use large amounts of energy to process. Vegetable prices may be dependent on energy costs. Potatoes will continue to be a good buy.
Demand for exports will continue.
Land prices will continue to increase, but more slowly.
The size of farms will increase while their numbers decrease. "Like other industries, it's a fact of life. You have to be big to make a living," Ahalt said.
Fuel prices for farmers will continue to increase. Last November, for example, fuel cost farmers on the average 84 cents a gallon. The previous November it cost 47 cents a gallon.
Ted Lietzke, who works on his father's 1,200-acre alfalfa farm in DeWitt, Mich., said one issue the farmers will pursue is help in the production of alcohol fuels, which they hope eventually will ease energy shortages while giving farmers a productive market for their grains. "We need fuel and we need to get rid of our grain," Lietzke said.