Drought Producing a Bountiful Crop of Boom-to-Bust Tales : America’s Heartland: The Exodus Is Under Way

For the first spring in 19 years, Duane Schaefer starts his workday with a dark-of-night drive past quiet moonlit fields. This is the season of rebirth--and he’s on his way to a new life.

At 42, the third-generation farmer has called it quits. No more crops to plant, no soil to till. No more weather worries, either. There were enough of those in the Great Drought of ‘88, when Schaefer decided to make the break.

“I guess it pushed me over the edge,” the burly, proud ex-farmer said of the dry spell that followed years of debt and decline. Last spring, he still hoped to hang on to the only career he’d ever known.

‘It Forgot to Rain’

“I wanted to give it one more good try,” said Schaefer, who now works overnights at an auto parts plant. “We gave it our all and it forgot to rain.”

“When I decided to quit, I felt like a failure,” he said. “The farther I get away, the less I feel that way . . . . I feel better now than I have in the last 20 years. I’m more optimistic I can make something of myself.”

Experts don’t yet know what impact the drought will have on the ‘80s rural exodus that already has seen more than 1 million people leave the land and 273,000 farms go out of business. But they say America’s heartland, parts of which remain parched, will likely see the greatest thinning of ranks.

“We do anticipate some exiting of farmers, particularly in the northern plains and part of the western Corn Belt,” said Gregory Hanson, an Agriculture Department economist. He said the rate will be higher than in drought-recovered areas such as the South.

Noose Tightened

“What we saw in 1988 was a tightening of the noose around the necks of some of the more heavily indebted farmers,” explained Neil Harl, an Iowa State University economics professor.

The most vulnerable farmers, he said, had little or no crop and no surplus. Prospects were even bleaker for those without crop insurance.

A recent Agriculture Department report said the drought put 10,000 to 15,000 of 550,000 commercial farmers on the ropes. That number would be doubled if not for a $3.9-billion federal aid package, the report said.

Still, experts don’t expect widespread flight because 1986 and ’87 were good crop years and the ‘80s’ farm crisis already had forced out many on the edge.

Risks remain for farmers in still dry areas such as eastern Iowa. A second straight bad year in 1989 could force them out.

Schaefer, who was renting 1,450 acres, didn’t wait.

He sold out in December after losing 75% of his corn and 35% of his soybeans.

“You could compare it to being unemployed,” he said. “There isn’t any income coming in.”

Couldn’t Break Even

Schaefer sold surplus grain and received a substantial disaster payment--$52,000--but he wasn’t close to breaking even. About two-thirds of his grain proceeds paid a government loan and the disaster aid went toward bank debts, Schaefer said.

What’s more, he added, his rent and planting costs were about $250,000 a year.

“A guy getting a paycheck for $20,000 to $30,000 . . . thinks, ‘This guy got $52,000 from the government,’ ” he said. “People don’t understand the amount it takes to operate a farm. It goes back to debt and land. It’s not net money . . . . The farmer doesn’t see it very long.”

Still, he said, without aid, “I would have had the banker breathing down my neck. I probably would have declared bankruptcy.”

Schaefer said he tired of living with too much stress and unsteadiness and too little satisfaction.

He endured four droughts since 1976--and 1988 was the worst.

“You make money for three years, then a drought comes along,” he said. “Then you lose everything you made in the last three.”

More Pain Than Pleasure

“The last few years, it was more of a pain than enjoyment,” Schaefer said. “I could see people coming home with a paycheck. My paycheck was a gamble . . . . Everytime I remotely start thinking about (farming), I think of a paycheck on Friday night. It’s a sure thing.”

That’s some solace for Schaefer, his wife, Susan, a part-time substitute teacher, and their two children.

“I’m 42. I’m looking at 65,” Schaefer said. “If I’m doing this, every two-three years there’s not going to be anything there. I want to get to a place where I can set money aside.”

Susan Schaefer said she, too, was “tired of the uncertainty. I wanted him to get out of it. But in the back of my head, I said, ‘He’s good at this.’ ”

Schaefer’s boom-to-bust tale started in 1971, when he began farming after earning an accounting degree. Gradually, he bought tens of thousands of dollars’ worth of equipment, rented more acres and purchased a house.

“Everyone was borrowing,” he said. “You didn’t want to say no if it was offered . . . . When you walked out the door of the bank, they said, ‘Is that enough?’ ”

Land Values Plummet

But in the ‘80s, interest rates soared, land values fell and Schaefer amassed hundreds of thousands of dollars in debt. In 1985, he averted foreclosure but lost his house and farm in a settlement with the Federal Land Bank. His land, once worth $2,700 an acre, dropped to $800 an acre.

The Schaefers moved nearby and continued farming. Despite the hard times, Schaefer said his banker urged him to continue in 1989.

“With a little creative financing, we could have survived,” he conceded. “All you’re doing is borrowing yourself more trouble . . . you’re borrowing against the future . . . . I got tired of that.”

“He’s very honorable,” said Irene O’Meara, county Agricultural Stabilization and Conservation Service director. Her husband owned some of the land Schaefer rented.

“A lot (of farmers) will stay in a year or two . . . and take bankruptcy. The creditors don’t get paid,” she said. “He said, ‘I’ll quit while I can still pay everybody off.’

Cites Family Worries

“He deserved better,” O’Meara added, “but then what can you do? . . . . You go on hope for a few years. After a while, you don’t feel it’s fair to your family.”

Schaefer works the midnight to 8 a.m. shift at an auto stamping plant 21 miles away.

“I feel like I’m starting closer to the bottom than I’d planned,” he said. “I didn’t expect to get a $30,000-a-year job. (But) I didn’t expect trouble getting a $15,000 to $16,000 a year job. There’s a lot of young stallions out there.”

The upside, Schaefer said, is that for the first time in 22 years he has paid most of his debts, using proceeds from the sale of machinery and assets.