Farmers were going bankrupt by the bushel.
Farmhouses that had been in the same families for more than 100 years were being confiscated by the banks.
Farm equipment was being sold in at least one state at 140 auctions a week.
The images appeared in Southern California homes the other night in the cable television program "Down and Out in America," but the documentary was filmed in 1985.
Since then, the number of farm foreclosures nationwide has dropped, and Jerry Stam, an economist in the economic research service of the U. S. Department of Agriculture, said, "We think the crisis has eased."
It never was as severe a problem in California as it was in other states, but agricultural and other land auctions in the Golden State are booming. One reason: There is a new kind of auction. But the old kind is also going strong.
Until now, land sold at auction was almost entirely of the financially distressed variety.
The new kind of auction does not necessarily involve a forced sale. Some call it "a marketing tool."
William R. (Bill) Stevenson, head of Kennedy-Wilson Inc., a Santa Monica auction company, said, "Ten years ago, real estate auctions were used only for foreclosures, but there is more and more recognition of the auction as an alternative form of marketing."
Kennedy-Wilson is handling an auction next month of 300 acres, declared "surplus" for the General Services Administration, at Miramar Air Station in San Diego, and is putting together what Stevenson described as "some large land sales through some multi-state type marketing."
Kennedy-Wilson already held a land auction in Hawaii by satellite to Los Angeles and San Francisco. "We had buyers from all over," he said.
Some people look at such techniques, however, as costly gimmicks that don't inevitably pay. R. L. (Dick) Burns, a Rolling Hills Estates real estate broker who specializes in ranches and other acreage, remembers one man who spent thousands of dollars to promote an auction nobody attended.
He also questions the feeling of urgency that auctions pose. "They might be OK for little lots, but people need time to investigate all the facets of a major transaction. CPAs and attorneys like to roll the deal over and look at all sides, but an auction puts everybody on the spot right then."
He calls some auctions "publicity stunts," adding, "It's the publicity they're seeking, not the event."
Speaking of publicity, he was reminded of the auction planned this weekend of the Big Sky Movie Ranch in Simi Valley. "Look at the publicity that generated in a short time."
About two-thirds of the nearly 10,000-acre Big Sky ranch, used for years for location shots by TV and movie companies, was scheduled to go on the block Saturday as one of the largest land auctions ever conducted in the western United States.
Received Cash Offer
The auction was announced in April. In late May, the owners, a partnership managed by Watt Enterprises, reported that they had received a $35-million cash offer.
Earlier, Nathan A. Wolstein IV, a vice president of Larry Latham Auctioneers, the company handling the auction, said, "We feel the 6,711 acres (offered at the auction) are worth $30 million to $35 million."
Even after the $35-million offer, he planned to go ahead with the auction anyway, saying, "Who knows? The $35 million might be too cheap, judging from the interest." He said that the ranch is not a distressed property.
"Many times, in auctions around the country, we get more for properties than they would get on the regular market," he continued. "It's a misconception that a buyer can buy a property at auction for half the value."
Want to Pay Less
Nevertheless, Mario Piatelli, who has been auctioning land in California for 20 years, said, "People want to pay at least a third less at an auction. They come to get a bargain, and they usually do."
Most of the land auctions his Beverly Hills office handles several times a year in various locations, including the Los Angeles Convention Center, are for distressed properties, and--for a variety of reasons--California has its share.
As Carol A. Nuss, president of R&P; Auctioneers in Tustin, explained it, "The banks will always end up taking some properties back because there's always death, divorce and transfers. Also, some lending institutions invest in real estate themselves, then don't get the return expected."
In addition, there are still some problems in farming and ranching, even in California. "We're hot and heavy in Redding," Piatelli said. "We just had an auction for part of a ranch up there."
Piatelli sold 5,000 acres of the ranch, in parcels ranging from 160 to 1,000 acres. Another 5,000 acres are expected to be sold, along with several properties of other Redding-area landowners, at an auction there in December.
"I think we'll have a lot more ranch auctions," he said. "A dozen ranchers approached me at the last auction."
A lot of land in California is going for less than what the banks loaned on them, he said. "For instance, the Bank of America used to loan $4,000 to $5,000 an acre for farm land in Northern California that is selling for retail at $1,500 an acre now. The Federal Land Bank, B of A and other banks are taking some big losses."
At the same time, real estate broker Burns termed the cattle business "very strong," with cattle that was selling for $50 a hundred weight now going for more than $70.
"This makes some people in the cattle business seek more land, because they can get more money for their cattle," he explained.
Even so, he said, "there is a lot of land for sale everywhere in California, but the prices aren't as desperate as they are in the Midwest, where farmers grow wheat, soybeans and oats.
"Our crops--like cotton, oranges and pistachios--are more intensive and can be grown pretty much year 'round. Still, the sinking dollar has made our products cheaper around the world, and farmers are subject to whims of the economy."
Stan Ross, co-managing partner of Kenneth Leventhal & Co., a Los Angeles-based real estate and accounting firm, acknowledged that more ranches and farms are for sale "but not from a tax point of view as much as for the economics.
"A lot of farm land in California doesn't pencil out (for agricultural purposes). As development moves closer, there is a potential for rezoning. Then the farmer thinks of cashing in."
Warren Johnston, chairman of the department of agricultural economics at the University of California at Davis, said there is a rising number of syndications interested in buying agricultural land.
"So maybe there is some money ready to roll back into agriculture because land prices have gone down significantly during the past five years," he said.
At the same time, he noted, 600,000 to 700,000 acres of agricultural land in California is "in the hands of financial institutions, and there is a cloud of uncertainty over field crops, which are dependent a great deal on government support."
There also have been financial losses in vineyards and orchards developed in the late '70s on properties not ideally suited for such plantings, he added. "So there are positive forces for transition but negative forces latent there as well."
And it probably adds up to more business for auctioneers.