This paper re-examines the changing structure of Canadian agriculture over the period between Confederation and the beginning of the “wheat boom.” A pattern of changes is found that differs in some respects from the long-received accounts. The shift from wheat to mixed farming was accomplished by an earlier date than is usually supposed, and domestic demand is due more emphasis, relative to export demand, than it is usually given.

This paper attempts to document and account for cost savings on North American small-grain prairie farms in the early twentieth century. Costs of production are analyzed using the ex post price and yield data abundantly available. Cost conjectures are developed and compared with scattered farm data that itemize inputs and reveal some aspects of farming technique. Total costs per acre, despite year to year fluctuations, appear to have fallen gradually over the entire period consistent with a comprehensive and continuous learning process, rather than only suddenly in the late 1920s when there was a marked increase in the sales of gasoline-powered farm machinery.

This paper rejects the traditional interpretation that farmers shifted from wheat to mixed farming in eastern North America because of changes in relative costs. It argues instead that they shifted because mixed farming involved less risk. We test the proposition that farmers were willing to give up a larger expected income in wheat production for a smaller but more stable income in mixed farming. The results are consistent with our hypothesis.