Slump in agricultural prices in the 1920s (AQA A-Level History): Revision Notes
Slump in agricultural prices in the 1920s
In the 1920s, increased production of food grains, particularly wheat, expanded world trade. In the case of Germany, the gold standard supported the storage of wheat which was then used as a collateral for foreign credit. Between 1924 and 1929, the oversupply of wheat around the world (mainly imported from the US, Argentina, Canada and Australia) caused the decrease in international price.
In the 1920s, the Great Plains in the United States was largely used for wheat cultivation. With about 22%, the wheat export market was dominated by the US, second to Canada with 38%. However, in the 1930s, large-scale farming and drought made the region into the 'Dust Bowl'.
The unstoppable decline of wheat prices in 1929 contributed to the decreasing value of trade, which later resulted in panic sales of stocks, mainly in the US. Agricultural recession or farming crisis in the US in the 1920s was characterised by low crop prices and low farm income.