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Why did falling farm prices make it difficult for farmers to repay loans after World War I?

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A long line of unemployed men in coats and hats stands outside a soup kitchen in Chicago, with a storefront sign reading Free Soup, Coffee and Doughnuts for the Unemployed. — Great Depression Unemployed men standing in line outside a soup kitchen, Chicago.

During World War I, the U.S. government encouraged farmers to increase production to meet high wartime demand, leading many to borrow heavily to purchase additional land and farm machinery.1

Following the war, a glut of agricultural products caused prices to plummet—for example, the price of a bushel of corn dropped from over $1.00 in the early 1920s to just $0.29 by 1932. Because farmers had become overextended with debt to finance their wartime expansion, the falling prices meant they had to produce significantly greater yields just to net the same amount of money. As the Great Depression intensified, these farmers could no longer generate enough income to cover their mortgage and other debt obligations, resulting in widespread bankruptcy and foreclosure between 1930 and 1935.1