Final answer:
By the 1890s, approximately 80% of American farms were affected by the oversupply of produce in the global market and rising shipping rates, which caused a significant decrease in prices and contributed to a cycle of overproduction and further price declines.
Step-by-step explanation:
During the 1890s, American agriculture was severely impacted by an oversupply of produce on the global market, leading to a significant drop in prices. This problem was exacerbated by increased shipping rates, adding to the financial burdens of farmers. The economic hardships included declining farm prices, high tariffs, and fierce foreign competition. A shift towards overproduction, influenced by the westward expansion and industrialization with more efficient farm tools, resulted in a saturating supply that surpassed the purchasing power of consumers, driving prices even lower.
Furthermore, the application of new farming practices, which had been profitable during periods of high demand such as World War I, began to backfire when demand normalized. Given that the farmers' response to debt was to further increase production, hoping to offset their losses, they inadvertently contributed to the continuing decline in product value. By this period, a significant majority of American farms were struggling with these economic conditions, with an estimate of around 80% being affected. This widespread economic distress in the agricultural sector showcased a deep-rooted structural issue within the American economy and rural life.