First, a spring frost ruined his wheat. Then the prices for his cattle stayed depressed. The way 1981 is winding up, Vernon Agur is $20,000 in the hole and he is a farmer in despair.
"I've never been in this situation, never had both bad wheat and bad cattle. If I have another crop failure, I'll be out of farming," Agur said the other day. "I've laid awake nights worrying, but who hasn't?"
Gloom and doom are everyday commodities in farm country these days; Agur's problem is a microcosm of American agriculture today. The near-depressions in the housing and auto industries are well known; they are said to be the leading elements in the current recession. But the farm economy too has been in acute shape now for more than a year. Prospects for quick recovery are not good.
All across the central and southern states the refrain is the same. The marginal farmers and the heavily indebted are feeling it most, but even many of the most skilled and durable tillers are in trouble.
Farm economists say these are some of the worst times since the Depression. Net farm income in 1980, adjusted for inflation, was the lowest since 1933. It is expected to be even lower this year, putting new strains on farmers' ability to pay debts and undermining the economies of rural communities.
Nationally, farm debt has reached historic levels, up 28 percent in the last two years to about $180 billion. High interest rates on farmers' crucial year-to-year loans, and rising energy, fertilizer and equipment prices have kept farm operating costs up. A bumper harvest (wheat and corn hit record levels), a softened world economy and slackened exports have depressed commodity prices.
Department of Agriculture economists foresee little relief for farmers' financial problems before next fall. They expect interest rates to fall by then, which could bolster domestic sales and spur export growth.
Meanwhile, as 1981 loans come due, many strapped farmers are expected to drop by the wayside, either as foreclosure victims or as voluntary retirees. Others will find their credit for 1982 operations severely limited.
This has obvious political implications for the Reagan administration, which had strong support in the Farm Belt last year, and for members of Congress facing farm-state election campaigns next year. The administration's insistence on an austere new farm bill and the bitter debate that ensued have left bad feelings and deep resentment in farm country.
Agriculture Secretary John R. Block continues to argue that the farm economy will right itself sooner than most farmers expect. But he conceded recently that "it won't get much better until we get a handle on inflation and interest rates." Block noted that farm income had fallen about 40 percent in 1980 and had continued down in 1981, while debt continued to soar.
Anticipating tougher times, Block has his staff at USDA reviewing measures that may be proposed next year to help revive the farm economy. Options under study are said to range from stringent planting limitations to lesser degrees of price stimulation.
The deteriorating situation led Deputy Secretary Richard E. Lyng to say this month that some farmers inevitably will lose their farms because of low commodity prices, rising costs and inflated land values. Hardest hit, he said, will be those who have borrowed heavily against inflated land.
Statistics from USDA's Farmers Home Administration, which lends to farmers unable to get commercial credit, reflect that view. Delinquencies in FmHA's four major farm loan programs have increased this year to levels that some officials consider alarming. FmHA has cautioned its state offices that their loan management practices must be tightened, but the agency denies widespread rumors that it intends to invoke a new get-tough policy on delinquents.
In these parts, such assurances provide little succor. When a Vernon Agur, a prudent man who is regarded as a farmer's farmer, is in trouble, then most everyone is in some kind of trouble. Farmers feel it, suppliers feel it, business in general feels it.
A century ago, Dodge City was the world's largest cattle auction. About the same time, a hardy wheat that thrives in this clime was introduced by Russian Mennonite immigrants. Dodge City now is merely the state's largest livestock center, but cattle and wheat, even with prices down, continue to turn the wheels of western Kansas.
The pungent odor of cattle feedlots hangs heavy in the night air; big livestock-hauling rigs rumble through town; winter wheat shoots green the landscape. Rail cars line up for loading at the grain elevators. But the sounds and smells of prosperity may be misleading.
Earl D. McVicker, vice president of the First National Bank, finished a consultation with an elderly farm couple ("We appreciate the chance to work with you," he said) and then talked about the financial scene here.
"Livestock is as responsible for our economy as crops. And both segments are depleted. We're heading into our third year of down prices, high costs and the squeezing out of people," he said. "We're not foreclosing on anyone right now, but by the end of 1982, there may be some massive sales. If we go through the 1982 crop year and have these prices, we would be close to a depression."
The squeeze affects farmers like Agur, a quiet, 50-year-old man who raises cattle, wheat and milo on 1,500 acres here in Ford County. He is known as a wise cultivator and cautious spender. He feels close to his land and he gets great pleasure from the fact that his 87-year-old father, O. L. Agur, still actively farms 800 nearby acres.
Agur lost three-fourths of his wheat to the devastating frost (it was so severe that North Dakota this year overtook Kansas as the No. 1 wheat state) and he has watched cattle prices remain unprofitably low.
"I'll lose $20,000 this year that has to be carried over into 1982. This is the worst I've been--anyone would be depressed," he said. "At harvest time this year, people just didn't care, they just didn't push. You could see a percentage of depression at the elevators."
He added, "I used to be able to make money on cattle when the crop was down. Now we have a surplus of wheat, milo and cattle. I don't know what the answer is. Nothing has money in it right now and I don't see much change for 1982. It's terrible to sit here and be bewildered. I don't know the answers."
The wheat failure, and the loss of his investment, only compounded the problem. A year ago Agur got 75 cents a pound for his cattle, which go to feedlots for finishing. This month he could get 59 cents a pound, short of the 65 cents he said he would need to break even.
In an area so dependent on depressed commodities, the uneasy ripples are felt all along the economic chain.
"The cattle business is real lousy. We're in a real bad depression and it's hurt me real bad," said Jerry Anglin, an auctioneer who also raises livestock. "People don't have the money to buy beef and it doesn't look like there's an end to it, either. . . . You get to a panicky stage, but we're not there yet. Ronald Reagan's made it pretty tough. If you're not in on defense, he's cut everything else."
Wherever one goes, the lamentations are nearly universal but answers are slow in coming.
Some of the area's most militant farmers are members of the American Agriculture Movement, which sponsored the tractorcade to Washington in 1979. A group of them got together the other morning in the country home of Howard Stude, about 40 miles from here at Copeland.
They were angry about depressed farm prices. Most of them enthusiastically supported Ronald Reagan, but they feel his austere farm policy has let them down. They feel they are caught in an economic trap, a sort of conspiracy against the family farmer that ultimately aims at taking their land.
One way they are fighting back is through a toll-free hotline that Stude, Stan Irwin of Sublette and Bill Leonard of Hugoton set up so that farmers under pressure from FmHA could air their grievances. So far, farmers from 13 states have called them, and, when more facts are at hand, they may file a class-action suit against the loan agency seeking a reprieve from the tougher line on loans.
That's one view from the farm, but even at that there's some disagreement about farmers' economic problems and the state of the state.
For example, Steve Reynolds sells insurance here for the Farm Bureau and, while his business suffers when the economy sags, he views the scene with a certain detachment. He thinks some farmers have made bad planting and investing decisions. He thinks others are incapable of adjusting to times that call for new ways of coping.
"The freeze didn't hurt the state economically as much as they say," Reynolds said. "That same weather helped the corn and the milo. An intelligent planter could make a profit this year, but it's tough if they put all their eggs in one basket . . . . Some of them could lose a crop five years in a row and still they plant wheat."
Another with a cool view of the situation is Rex Stanley, who runs a huge cattle feedlot near here. He also raises some wheat (at a profit, he said) and he doesn't waste a lot of sympathy on complainers.
"The wheat farmer would complain if you hung him with a new rope," Stanley said. "If farmers are really in trouble, see how much land they want to sell you. They're not ready to leave yet . . . . Nobody's got a gun at their heads to stay in farming."
Which may be fine as philosophy, but it doesn't get Vernon Agur very far. He's at midlife, like the majority of farmers in this country, and all he knows is farming. There's no place else to go, not much else to do.
Switch now to the rolling terrain of west-central Iowa, to the town of Audubon, a modest place of about 2,800 souls who eat, sleep and live farming. Its symbol is Albert, a 30-foot-high bull, which stands vigil on the edge of town. As the cattle, the corn and the soybeans go, so go Audubon and scores of other similar communities.
In the last year or so, it hasn't been going well at all. Two implement dealers, two hardware stores, a new car dealership, a construction firm, a men's wear store and an infant-care shop have gone out of business, although a couple are back or are coming back under new operators.
One who won't be back is Perry Roberts. With his brother Oliver he ran a family-owned hardware and farm supply business that their father started in 1922. They recently declared bankruptcy and kissed goodbye one of the town's biggest businesses, a $3 million-a-year enterprise.
"We didn't expect the bubble to burst. It just got away from us," Roberts said. "Agriculture was good around here and the business grew, but it grew too fast for management. We were caught with a high inventory and a thin cash flow. Got caught in a squeeze."
Roberts traced the firm's problems back to the Carter administration's partial grain embargo against the Soviet Union in 1980. Farmers quickly stopped buying equipment, interest rates began rising, commodity and beef prices went down as surpluses grew.
Roberts Rural Supply didn't survive. "It's been tough. It's a shame. But I've got a friend who says the sun will rise tomorrow and I think it will," said Perry Roberts.
Jim Boyd, a former high school teacher, now heads the Audubon State Bank and he's seen his old pupils and his longtime friends squeezed through the wringer and he worries about it.
"The farmers' problems relate back to Main Street," Boyd said. "The whole country would be better off if the farmer could make some money. The farmer creates wealth and it spreads throughout the economy . . . but I think 1982 is going to be a long year. I just don't see much potential for income."
"This is the most prolonged 'down' period I can remember, but we'll make it."
It was late afternoon and Chuck Schnack, one of four veterinarians in a joint practice, was in a back room of his clinic playing gin rummy with his buddy, Jim Richardson, the lawyer. Another friend was engrossed in a copy of Playboar, a humor magazine for hog producers. They weren't very busy.
"We probably have 200 paper millionaires in this county," one of them said, "and yet they have to borrow money to operate . . . inventories are down, values are down. A small price reduction in livestock or grains means thousands of dollars here."
Richardson added a thought: "I do a lot of farmers' tax returns. In the last several years their gross income has stayed about the same, yet their fuel and chemical costs double every couple of years. We have people around here living the same lifestyle they've had for six years. They're in debt more. The money is not to be made in agriculture."
Jack Krier, publisher of the weekly News-Advocate, said the farm slump has hurt all of Audubon County and he doesn't expect things to change for the better for another year. "We've been hurt," he said. "This thing has weeded out the poor managers. The town has been hurt, but we're all in this together. I think we'll make it."
The way most farm economy experts see the big picture, the farmer who is hurting most and the farmer who's going to hurt most is the young one, not long in farming, who is heavily in debt and paying high interest or rent on the land he needs to turn a dollar.
They are talking about Duane Steadham, a 33-year-old college graduate who studied agricultural economics and who farms about 500 acres of wheat, cotton and soybeans near the town of Nesbit, in northern Mississippi. He's deep in debt, uncertain about his future, not even certain that he'll be able to rent land from year to year.
"I've farmed for eight to 10 years, living on my dad's 143 acres and renting the rest. You could say I've done nothing more than survived the last two years. My situation is more difficult than other farmers'. When you rent land, it is as close to going out as you can get," Steadham said.
Sen. Thad Cochran (R-Miss.), chairman of the Senate agriculture appropriations subcommittee, is increasingly worried about the Duane Steadhams in farm country. He has pressured FmHA to deal generously this year with strapped farmers. He has called on Secretary Block to promptly explore aggressive new policies to help push up farm commodity prices.
"It's acutely depressed in Mississippi," Cochran said. "There is a very large percentage of delinquent FmHA loans in Mississippi. We probably won't see broadscale foreclosures right now, but there are even a lot of good farmers who are not going to make it."
So it's a year-by-year thing for farmers like Steadham. He learned about that the hard way. He lost the first land he ever leased. He spent $50 an acre to put lime on it and plant his wheat. Then he sat back to watch it grow.
"The landlord came and took it right out from under me. I lost the whole thing," Steadham said. "All he would say was, 'Tough, it's a cruel world.' "