Maurice and Pam Johnson, grain farmers near Floyd, survived. The couple hopes it doesn't happen again.
"We lost a whole generation of farmers," says Pam Johnson, president of the National Corn Growers Association.
Briggeman says the global recession and rampant inflation in the 1980s slashed demand for agricultural products. The value of the dollar soared, which sent ag exports and incomes plummeting.
"The overall world economy fell. As a result everything collapsed. Once it started collapsing, it fed on itself," Duffy says.
President Jimmy Carter banned grain and technology exports to the Soviet Union in 1980 in response to the communist nation's invasion of Afghanistan a year earlier. The grain embargo made a bad situation worse.
Farmers borrowed money to stay afloat.
Interest rates in the '80s dramatically increased. Ag loans exceeding 15 percent were common, economists say. Eventually, growers could no longer afford to service high debt loads. Hundreds of thousands of farmers nationally were forced to liquidate, flooding the land market.
In 1981, the average price of farmland soared to a record $2,147/acre. Six years later it was $787/acre.
"Farmers were overextended and used high interest rates. A substantial realignment in the ag sector (occurred)," Oppedahl says.
Inflation-adjusted farm income was $108 billion in 1973, the economist adds. Ten years later it was $30 billion.
Yet lax lending rules allowed growers to get financing even as incomes deteriorated.
"There was a significant drop off in buying power for ag. ... That was the underlying cause," Oppedahl says.
The farm crisis ended in 1987. Years of modest profits and losses followed.
Land prices slowly inched higher.
"Ag treaded water so to speak. No big increases in commodity prices and subpar returns compared to the '70s," Oppedahl adds.
Boom but not bust
The ethanol boom hit in 2004. A year later, Congress passed a law requiring renewable fuels, primarily corn-based ethanol, be part of the nation's fuel supply. The ride went from mundane to thrilling almost overnight.
The Renewable Fuels Standard requires 13.95 billion gallons of ethanol and biodiesel be used this year. The number gradually increases to 36 billion in 2022.
Once a minor buyer, the ethanol industry now consumes 40% of the nation's corn crop.
Corn prices have more than tripled since 2004. To stay competitive and buoyed by strong export demand, soybean prices followed suit, doubling in price.
This fall, cash corn and soybeans locally are worth well more than $6/bushel and $11.50/bushel, respectively.
As in the 1970s, farmers are re-investing profits into land. Investors looking for returns outpacing the stock market are also active bidders.
Farmland prices, except for a minor setback in 2009, have skyrocketed the past eight years. Double-digit percentage increases are the norm.
In 2004, ISU figures show, farmland statewide averaged $2,629/acre. That's less than half of this year's average, according to the USDA.
Speculation abounds whether land prices will crash again and spur another farm crisis. Most agriculture experts conclude that is not likely.
"There's a good chance land values will drop, but not a catastrophic fall. I just don't see it happening," Duffy says.
The farm management expert provided several reasons:
Strong commodity prices. Grain stocks at historic lows coupled with strong demand will keep prices high.
Less debt. Buyers are paying cash for farmland or putting down big down payments.
Interest rates are low and inflation is in check.
Contract land purchases all but disappeared, making it harder to walk away from property.
"(Buyers) are not taking on as much debt. If it does correct, it might not make them happy, but they're not going to sell it," Duffy says.
Sterling Liddell, vice president of Agribusiness and Research with Rabo AgriFinance, says lending institutions learned from the farm crisis. Rabobank is headquartered in The Netherlands, but has branches throughout North America, including in Cedar Falls.
Liddell says one of the company's largest exposures is ag land financing. Tighter regulations and financing requirements have made farmland loans a good bet.