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period.
Thus my surprise when I read about the natural gas boom in Pinedale,
Wyoming, and the record high price of farm land in Iowa.
Take
yourself back 25 years. In the early 80s, the population of
Casper, Wyoming, was nearly 80,000. Commuter airlines into Wyoming
were full of engineers and roughnecks from Houston, real estate agents
were giddy, the city had discontinued their traditional Ranch City
banquet, all eyes were on the oil.
Meanwhile
in Iowa, farmland was increasing in value proportionate to the 14%
inflation rate that was roaring through the country. The price of
cattle, corn and soybeans remained at subsistence levels; but banks were
lending money using the inflated land values as collateral.
Farmers were buying more land and more machinery; ag lenders felt like
Santa Claus.
Between
1980 and 1985 the government stopped the runaway inflation. It
went from 14% in 1980 to 2% in 1984. By 1990, the population of
Casper had fallen to 61,000. The oil boom busted. Real
estate agents couldn’t give away a house. The city fathers cast
about for new business and remembered the local ranching community that
had been sitting there all the time like wallflowers at this oil
dance.
That
year they reinstituted the Ranch City banquet to show their appreciation
of the agricultural customers. I know, I was there in 1988.
The Federal Land Bank and PCA lending institutions began tumbling like
marble pillars in the economic earthquake that hit agriculture.
Land value in Iowa dropped precipitously. Those farmers who had
borrowed heavily against their inflated farmland were foreclosed on and
wiped out. Willie Nelson started Farm Aid.
The
psychological, economic and social ramifications continued like
aftershocks through families, businesses, banks, churches, small towns
and state and federal agencies for years afterwards.
Ah,
but we’re booming again! Could it be we’re going to be a little
smarter this time? There might be enough bankers and mayors and
farmers and implement dealers that still remember, and will exercise
caution. But it’s the governors and real estate agent wild cards
that I worry about. Their ball of infinite time bounces instead of
rolls.
Baxter
Black is a former large animal veterinarian who can be followed
nationwide through this column, National Public Radio, public
appearances, television and also through his books, cds, videos and
website,
www.baxterblack.com.
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