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Wheat Price Guarantee Act
Wheat Price Guarantee Act

Background
At the start of the first World War, the US government passed the Lever [Food] Act. This was done to conserve the food supply and increase its production in order to aid the efforts in Europe during the war. This alone helped food industries, including wheat, to take off. In July of 1918, the Grain Corporation (a part of the US Food Administration) took on contracts with allied governments, promising to provide as much wheat up to 200 million bushels to the Allied powers. Soon after this, the war ended, and the United States had a decision to make if they were going to honor the wheat prices promised before the war ended. During World War I, the wheat industry was mobilized, but by the end there was not as much demand for it which hurt the still-mobilized agricultural industry. This resulted in the drafting of the Wheat Price Guarantee Act. The 65th Congress approved this, and appropriated $1,000,000,000 in funds to keep wheat prices constant through the 1919-1920 crop year. The passage of this act allowed the US Government, specifically the President, to monitor wheat prices in order to guarantee farmers profits based on what they had formerly expected to be. The minimum price per bushel was set to $2.26, which is known as a guaranteed price scheme. The passage of this was intended to give the agricultural industry time to adjust to the war being over. The act would officially expire on June 1, 1920.

Gronna Bill
Senator Gronna attempted to reverse all guarantees within this act with the Gronna Bill. Many state representatives opposed this, choosing to back the farmers with a 100% guarantee on their profits. The bill did not end up passing in the end.

Wheat Prices
The passage of the bill required the US to buy bushels of wheat for at least $2.26 each. Following the expiration of the bill in 1920, prices plummeted back to their typical range of $0.50-$1.50 per bushel. Having lost most of the business they had because of the war, the wheat industry took a big hit. In 1931 during the Great Depression, it would hit a low of just $0.33 per bushel.