Perspective: Lessons from the '80s

December 29, 2016 04:42 AM

As a group, we Baby Boomers make up an enormous cohort of active farmers. Many of us endured, with varying degrees of patience, the repetitive advice of parents and older neighbors from their life experiences during the Great Depression.

Our chance to repay this unasked-for advice is now at hand. Like it or not, well-meaning or self-serving, we are going to mimic that tiresome exercise with Deep Thoughts from the Time of Barry Manilow. We are talking about double-knit guidance here, complete with false equivalence and illogical analogies.

New Territory. The underlying presumption is simple: bad times are all alike. Unless some extreme event occurs between the time of my writing and publishing, I am convinced there are almost no sectors—grain, protein, produce or whatever—that can look with great enthusiasm on 2017. Coupled with the two already-difficult years we have just endured, our profits are under siege by costs and income alike. Although comparisons to the '80s are inevitable, I have strong reservations about their usefulness.

To begin with, macroeconomic conditions are radically different. Inflation and interest rates have one fewer digit today. The U.S. economy is improving steadily and has for an almost-record period. We are close to full employment. We have not erased all of the damages from the Great Recession, but there are few national statistics flashing warning signs.

Far more important, though, is the explosion in economic growth outside the U.S. Savings rates of 40% or more in China and South Asia has the world awash in liquid wealth. The addition of billions of new economic players risen from poverty since the '80s both stabilizes global economics and dilutes the power of the U.S. to dictate financial terms to the rest of the world. For agriculture, the '80s were pre-Brazil, further confounding comparison to today.

Meanwhile, our farm sector has new basics. The ethanol-driven demand that energized grain prices will not skyrocket a second time. And unlike the '80s, when we widely pursued freer trade as beneficial, we are clearly edging toward protectionism. 

Science was still respected in the '80s, and agriculture enthusiastically experimented with new findings in our field. Facts today are a matter of personal conviction. The ability of experts, from economists to agronomists, to influence farmers is diminished. 

Many of us found support during the '80s by traditional risk-sharing agreements with landowners. The growing transparency of rental markets, intense competition and increased risk aversion in landowners, even within families, offer far less refuge.

Rinse And Repeat. There are more stark differences, but I have found important similarities in my records.

We were equally clueless about what lay ahead, yet all but a small number of farmers endured. Predictions will not save us this time, either. Inability to see tomorrow says little about our chance of survival.

Farm wives and off-farm income carried many farms through the '80s. In the next few years, such revenue will still be important but far more so will be access to health insurance. Even operations with ample farm income will depend on outside employment to assure coverage and help with escalating costs. 

Strong friendships revived my spirits when hope seemed faintest. Those who see the other side of this time of testing will do so because they have invested in others as well as themselves. Our personal networks will once again prove to be the true safety nets, not by magical mind-melding but as an antidote for despair and self-doubt. I was comforted more than once by honest admissions of frustration, anxiety and outright fear in the quiet voices of close colleagues. We all need to know our problems are not imagined or unique.

To have friends, be a friend—with all the effort and baggage such a commitment requires. It might be a little late to start, but it could still make the difference. It did for me in 1987. 

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Spell Check

David Adcock
Atwood, IL
1/23/2017 07:20 PM

  As a baby boomer I do remember the 80's. My father could not help me do to his health problem's. My wife and I now 66 and semi retired still marvel at raising our young children during those times and opening the refrigerator door a seeing the refrigerator empty knowing that people in town could get food stamps but we could not. How did we survive, my wife said it was on love and guts. When Jimmy Carter used farmers for bullets to fight the Russian's for six months I tried to drink my sorrows away. Then one day I got mad and told my wife if we were going to survive this and make a go of this it will not be a drunk doing it. Up until that time there were always two foot prints in the sand but when it got really bad and I could not even afford the gas to go see Willy at the first Farm Aid in September 1985 is when I looked down and there was only one foot print in the sand. We made it through by the grace of God for it had to be God who gave me the courage,wisdom, and the will to make it work. I missed a lot of our children's activities and for that I am very sorry. Many in the Military missed many things in their children's lives also for the good of the country so that is the way I looked at it. I have always been a Republican and as far as Trump goes I hope he is successful in running the Country. I have never seen a Presidential candidate tell so many lies as he does though. Maybe Congress will wash his mouth out with soap while Putin holds his hand and kisses him on the forehead to make it all better and he will learn to be honest and learn the world does not revolve around him. Thank You John Best wishes to all the young Farmers.

bad axe, MI
1/1/2017 08:39 AM

  This whole thing is a lot different then it was in the 80's. In 1980 you had 4.7 trillion in total credit market debt , The government owed 700 billion the private sector owed 4 trillion. In 2016 the government owes 19 trillion, the private sector owes 50 trillion. $200,000.00 for every man,women and child in this country. If you sold the 600 million acres of crop , pasture land in this country you would have get $116,000.00 per acre for all that land just to pay the credit market debt off in this country. Trump will have to defalt on the goverments debt some time in the next four years there's no way to get out of this.

central, MN
12/29/2016 09:55 AM

  It is nice to have a columnist report agricultures economic state in reality. Unlike most columnist on Agweb having the hear no evil see no evil attitude. As for Donald Trump let us hope his ego is so big that he won't let his legacy go down as a bad president. At the very least Donald Trump should ease regulation. And that a loan is a good thing.


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