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The birth of big ag: the Bonanza farms of the late 19th century

Geology, the Homestead Act of 1862, railroads, modern machinery, and revolutionary new flour-milling methods all contributed to the bonanza farm boom.

Washburn-Crosby Flour Mills advertisement for Gold Medal Flour, Threshing Scene, c.1900.
Courtesy of the Minnesota Historical Society

Bonanza farms — large, commercial farming enterprises that grew thousands of acres of wheat — flourished in northwestern Minnesota and the Dakotas from the 1870s to 1920. Geology, the Homestead Act of 1862, railroads, modern machinery, and revolutionary new flour-milling methods all contributed to the bonanza farm boom.

The fertile Red River Valley was created twelve thousand years ago when retreating glaciers left behind deposits of silt. The resulting flat land, with its rich topsoil, was well suited to farming with horsepower and machinery. The Homestead Act of 1862 enabled farmers to obtain 160 acres of land in exchange for a filing fee and a residency of five years. They could also purchase the property at a price of $1.25 per acre following six months of residency. This opportunity prompted an influx of European Americans into Dakota Territory and the new state of Minnesota.

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Railroads had a significant impact on agricultural development in the Red River Valley. Trains provided transportation for the newcomers and carried equipment and supplies needed for farming. Railroad companies received large land grants to build their rail lines. One of the railroads, the Northern Pacific (NP), went into bankruptcy in 1873. The NP’s board of directors agreed to exchange the railroad’s worthless bonds for land at face value. This enabled investors to purchase large tracts of land for just fifteen cents per acre.

Among the first to take advantage of the offer of land at discounted prices were General George W. Cass, president of the NP, and Benjamin Cheney, a member of the railroad’s board of directors. Cass and Cheney initially purchased 13,440 acres a few miles west of Fargo in 1874.

Absentee owners, often from the eastern United States or the Twin Cities, hired managers to oversee bonanza farm operations. Cass and Cheney hired Minnesota farmer Oliver Dalrymple to manage their farm. Its success ignited a firestorm of land sales to large-scale investors. By the early 1880s, speculators viewed the land of the Red River Valley as a gold mine.

Railway magnate James J. Hill also saw the advantage of owning land in the Red River Valley. Hill’s interest in farming grew out of his desire to maximize his St. Paul, Minneapolis and Manitoba (later Great Northern) Railroad’s profits. He reasoned that if the farmers along his rail lines were successful, his trains would have valuable freight to haul and would turn a tidy profit.

In 1881, Hill began purchasing land in Kittson County that had been a part of the railroad’s original land grant at $2.75 per acre. His farm eventually totaled forty-five thousand acres (more than seventy square miles) and became the largest in Minnesota, although only about three thousand acres were under cultivation. To simplify management, in 1910 the farm was divided into two parts: the Humboldt and Northcote Divisions.

Most scholars agree that a farm had to have a minimum of three thousand acres to qualify as a “bonanza.” While most such farms in Minnesota ranged from four thousand to ten thousand acres, others were immense. The Keystone Farm in Polk County took up 21,760 acres. The largest of all bonanza farms, the Cass-Cheney-Dalrymple farm in Dakota Territory, totaled seventy thousand acres.

Milling technology stimulated the growth of bonanza farms in the Red River Valley. Hard red spring wheat was more nutritious than winter wheat and better suited to the northern climate because it required a shorter growing period. Spring wheat’s hard, brittle bran shell, however, made milling with the old-fashioned grindstone method more difficult. The millers in Minneapolis began to experiment with the “new process” of milling, using roller technology and middlings purifiers that could break down the hard shell and consistently produce large quantities of high-quality flour.

Modern farm machinery also boosted large-scale agriculture. Improved harrows and seed drills saved farmers time and labor. These machines sowed seeds at a predetermined, uniform depth and covered them to keep them from blowing away. This increased the chances that every seed would grow. Fanning mills cleaned grain prior to shipment, and cleaned seed wheat to eliminate noxious weeds. Self-tying binders saved the labor of bundling the grain by hand, although it was still hand-shocked. Improved steam traction engines and larger threshing machines made it possible to thresh huge volumes of grain.

Bonanza farms required fleets of equipment. In 1885, Hill’s Humboldt Farm employed 254 horses and mules; forty-five each seeders, harrows, and binders; one hundred plows; six threshers; ninety-five wagons; fourteen mowers; and other small machinery. Not surprisingly, implement manufacturers sprang up in Minnesota to meet the needs of these farmers. The Minneapolis Threshing Machine Company (1887–1929) and the Northwest Thresher Company of Stillwater (1866–1913) are just two examples of businesses that grew out of the agricultural boom of the Red River Valley.

Typically, new acreage was broken in preparation for seeding each year, but not all of a bonanza farm’s acreage was cultivated at once. Farmers intent upon making a quick fortune at the expense of the land continued to grow only wheat on the same acreage year after year. This depleted the nutrients in the soil and decreased yields. Severe weather, early and late frosts, too little or too much moisture, and insect and weed infestations all contributed to small yields and poor-quality grain.

Good harvests created a unique problem. Other countries, like Russia and Argentina, were also growing a substantial amount of wheat. The high volume of grain produced led to stiffer competition in the foreign market. This impacted the bonanza farm economy by driving down the price of wheat.

Some bonanza farm owners, like James J. Hill, saw the benefits of diversified farming and soil conservation through crop rotation. Hill put both into practice on his Humboldt Farm as an example to other farmers. Wheat was still king in the Red River Valley in the 1880s, but farmers began to dedicate some acres to other crops, such as oats, barley, and hay. They added cattle, sheep, and pigs—animals valued for the natural fertilizer they produced and as sources of food for the large crews required to run the farms.

By the end of the nineteenth century, most of the land in the Red River Valley was under cultivation. With fewer men needed in the spring to break the land, farm managers turned to migrant laborers. At times, finding enough men to work the land proved difficult. There was also some resistance on the part of local residents to the use of such labor; transient workers were perceived by some to be untrustworthy.

In the early twentieth century, bonanza farms fell victim to a number of factors, including the spread of diversification and increasing labor problems. It became more profitable to divide the land into smaller farms, and rising land prices led many to sell off acreage for a quick profit. Taxation also played a part in the demise of these colossal farms; an increase in taxes could wipe out the small margin of profit realized per acre. By 1920, most large-scale farming operations in the Red River Valley had ceased.

For more information on this topic, check out the original entry on MNopedia.