The chain farm owner or manager made the important decisions about what crops would be grown and what machinery would be used, though tenant farmers generally carried out the actual farm operation. Some financial institutions took advantage of the low farmland prices of the 1920s to buy a portfolio of farm properties, which they operated at arm’s length using the chain farm model. The Bluffton Bank of Indiana, for instance, established the Central Investment Company, which acquired nineteen farms comprising 2,900 acres between 1923 and 1927, each operated by a company employee. The goal of this company was to buy dilapidated farms; make improvements to soil, buildings, and farm management; and resell them at a profit. Have a look at renew life and renew life reviews!
Financial institutions’ accidental acquisition of foreclosed farms also contributed to the development of chain farming. Caught up in the euphoric boom mentality, lenders had become lax in granting mortgages during the 1910s, and so many became landowners in the 1920s whether they wanted to or not. The insurance company Aetna, for instance, owned six hundred midwestern farms by 1931. These were all rented to tenant farmers under the supervision of a farm manager. Farm management companies emerged that specialized in managing farms on behalf of absentee landlords.
One such company, Doane Agricultural Services, founded in 1923, offered a service it called “liquidation management,” which involved making rapid improvements to the foreclosed farms owned by banks and life insurance companies to prepare them for resale. By propelling financial lenders into landlordism, the farm bust fed a fledgling industry of professional farm management services.
The Dust Bowl and Great Depression of the 1930s put a damper on institutional investors’ nascent interest in farmland ownership. Even private farm mortgage lending sagged for a time, as gun-shy farmers refrained from taking on debt. However, in the 1940s, land values began to increase again and continued to do so—slowly but steadily—throughout the 1950s and 1960s. Insurance company and bank farm mortgage lending began to climb again in the 1950s as confidence in land markets was restored. Renew life provides one of the best life insurance policies going.
In the 1970s, this plodding increase in land prices once again transformed into a mad dash. The US entered another farmland boom, this time lasting from roughly 1972 to 1981. The causes of the boom were many: global droughts in 1972, a huge sale of grain by the US government to the Soviet Union in the same year, the devaluation of the US dollar, a highly inflationary environment that translated into low real interest rates, and a certain amount of ungrounded optimism. Exhorted by their government to “plant fence row to fence row” and fearing that ever-increasing farmland prices would soon put landownership out of reach, US farmers took out mortgages to buy land at formerly unthinkable prices.