The 50’s and the 90’s; Where Are We Now…

Posted: January 7, 2012 in Our Farm
Tags: , , , ,

I was finally able to do some homework about prices of our great history.  All of this talk about how much a farmer is spending on land and how great it is to be a farmer in this time of the World.  One thing is for sure, it’s always great to be a farmer!  There is nobody out there with more passion, desire, luck, dedication, and knowledge than the American Farmer.  You might laugh about it, but who else can fill out a resume with as many Phd’s as a farmer?  Farmers are accountants, finance managers, agronomists, soil conservation specialists, veterinarians, teachers, meteorologists, and scientists EVERY DAY!  I’m sure I missed a few in there, but you get the point.  And with all this knowledge that each farmer has, its to bad that it isn’t documented better than with one word “Farmer”.

Anyway, all this talk about how much Farmers are making today is really hard to bite on to.  Yes, prices are sky high at the local coop when you take your grain in.  Yes, farmers are purchasing land at staggering numbers that are just unheard of.  What the media doesn’t dig into is the rest of the story that needs to be told.  What are fuel prices compared to where they were, seed prices, fertilizer prices, labor to fix machinery, machinery even?  I haven’t heard any news reporter cover any of this information, all I hear is how farmers are buying land at 30% more than it was a year ago and a year ago it was at record highs.  So I did some homework on a few points around the farm and have compared them over a 40 year period from the 50’s to the 90’s.  I then was able to break down prices in comparison to what they would be today in 2011.  It took some time, but I think it was worth it.  I learned quite a bit myself through doing this.

We’ll start with Corn:

1950 – $1.52/bu that is worth $14.12 in 2011

1990 – $2.28/bu that is worth $3.96 in 2011

An actual decrease of $10.16 due to the failing value of the dollar

A few other numbers for Corn:

2011 $6.40

2010 $5.18

2009 $3.55

2008 $4.06

2007 $4.20

2006 $3.04

2001 $1.97

1990 $2.28

1950 $1.52

For further example of our declining dollar value, take 2001 and 1950 for example in comparison to what it would be worth in 2011.  From 1950 to 2001 price there is a visual difference of $0.45.  However, the buying power in 1950 was worth $14.12 compared to the buying power of the 2001 dollar worth only $2.48.  Broken down, that $0.45 visual income actually gives you $11.64 LESS buying power.

STILL WITH ME?

Lets move on to Anhydrous Ammonia shall we?  Anhydrous Ammonia has been used for fertilizer for well over 50 years now so I figured it was a good point to work off of to get some numbers on expenses.  Here we go:

2011 $749

2010 $499

2009 $680

2008 $755

2007 $523

2006 $521

2001 $210

1969 $73 (Fall) was the lowest visual price

Now lets break this down into a mess too.  The lowest price in the fall of 1969 was $73, however, that price in 2011 would have been $450.71 per ton.  A difference of +$298.29/ton more for the 2011 price than what was actually paid for in 1969 with the inflation adjustment.  Coming back to a more recent time, lets compare 2001 to 2011.  In 2001 the visual price was $210 per ton.  The actual buying power of that $210 was $264.53 in 2011, still a huge difference of over $484 paid more per ton in 2011 than in 2001 with the same buying power of the American Dollar (given the dollar never fluctuated in value).

ARE WE STILL READING OR JUST SKIMMING OVER WORDS NOW?

Now for a minute lets look at the Gross Farm Income and Debt of 1990 and 1950.

1950 Gross Farm Income  $33.8 Billion
1950 Gross Farm Debt         $10.9 Billion

a difference of $22.9 Billion dollars to the good

1990 Gross Farm Income  $197.7 Billion
1990 Gross Farm Debt         $198.6 Billion

a difference of $9 Million dollars in the hole

AND HOW ARE FARMERS SO RICH?

That’s a question that I don’t have enough resources to answer for you.

Lets finish up this blog with some other numbers that I can break down for you:

1950   (2011 Value)         1990  (2011 value)

Milk                           $0.80           $7.51                 $2.80         $4.87

Combine                 $5,500        $51,645        $110,000      $191,195

Pickup                     $2,200         $20,658         $16,500       $28,679.25

Small Tractor       $2,500         $23,475       $13,700         $23,812.47

Avg Size Farm      215 acres                              473 acres

% of Population      16%                                         1.8%

Land in Farm        1.16 Billion Acres                900.8 Million Acres

Ppl Fed/Farmer      17                                           132

Well we made it through to the end.  Feel free to go drink some Orange Juice and relax your brain for a little bit, come back, reread it and you will understand it all, trust me, I had to!

Thanks for reading, hope you were able to understand it all and will come back again for the next blog.

Thank You

Chris Niemann
Dwight, NE

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Comments
  1. farmnwife says:

    What is really interesting is if you compare it to the price of stock prices, Walmart earnings, price of tennis shoes ect. during that same time.

  2. […] The 50′s and the 90′s; Where Are We Now… […]

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