Beginning of WWI and Immediate Effects

The Federal Farm Loan Act

From the start, World War I affected agriculture in a big way. Due to the destruction of farmland in Europe, the Allies were relying on the United States to provide them with sufficient food supplies, which made demand and prices skyrocket.¹ Two crops that prospered tremendously were wheat and rye. With prices and demand high, farmers were profiting greatly. Wheat sales reached record highs in 1914, reaching 897 million bushels and in 1915, sales grew even higher, reaching 1,009 million bushels.² Wheat prices nearly doubled between 1914 and 1915, increasing roughly 72% and rye prices increased 69%.³ Although farmers were profiting greatly during this time due to the record high demands, they struggled to supply the demand because of the lack of resources rural farmers had.

Farmers had never had to produce this much, so they did not have the machinery or horsepower to fulfill the needs of the War. The Wilson administration acted quickly and passed the Federal Farm Loan Act during the Summer of 1916.⁴ The Act provided local rural farmers with loans in order to purchase more land, equipment, livestock, building, etc. at low interest rates.⁵ This gave farmers the opportunity to get the assets they needed in order to meet the overseas food demand of the War. The Federal Farm Loan Act was successful in giving farmers the resources they needed to meet the demand, but more prominent food shortages and conservation efforts would not start until the United States entered the War in April 1917.