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The Top Line

December 4, 2008

Similar to the current situation, the early 1980s were a time of turmoil for both the general economy and agriculture. In fact, some similarities are striking.

The OPEC oil crisis, historic inflation and interest rates in the teens spawned economic theories such as "supply-side," "trickle-down," Reaganomics, and the Laffer curve.

Thirty-five-year-old David Stockman was the most controversial head of the Office of Management and Budget ever. He was no friend of farmers, calling them whiners and blackmailers, and criticizing farm program spending as growing at a rate second only to President Reagan's Cold War–propelled defense budget.

Farmers were affected more than most: The farm crisis was well under way as escalating debt ran headlong into soaring interest rates, variable-rate loans and higher-paying money market funds that siphoned cash out of local banks. Ag banks went under and the Farm Credit System imploded as the weight of farm debt dragged many borrowers down.

Meanwhile, fuel prices almost doubled and fertilizer cost rose 30% or more. Suppliers were squeezed and demanded cash payment.

At the same time, foreign investors bought up U.S. T-bills and bonds, boosting the value of the dollar and causing exports to plummet. Trade war after trade war was battled in world markets.

The bottom fell out of crop prices as surpluses mounted.

The shakeout—from farmers to banks to machinery and chemical companies—reshaped the landscape of American agriculture.

New era. The editors at Farm Journal recognized the maelstrom was rushing agriculture into a new era in which a farmer's savvy behind a desk would rival in importance his ability with animals and machines.

We looked out on a vista where producers who understood marketing tools, risk management, computers, accounting and strategic planning would thrive.

Top Producer was born. Our mission was, and still is, to assist forward-thinking Top Producers in their quest for success. The challenges are no less today than when this magazine was launched and there's just as much new to learn. As we ride the current storm into the future, we hope we can help you turn your dreams into reality.

Linda H. Smith, Executive Editor

Top Producer, December 2008

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FEATURED IN: Top Producer - DECEMBER 2008
RELATED TOPICS: Columns, Risk Management

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