Bonanza farms were large, extremely successful farms, principally on the Great Plains and in the West, that emerged during the second half of the 1800s. The term "bonanza," which is derived from Spanish and literally means "good weather," was coined in the mid-1800s; thus, "bonanza" came to mean a source of great and sudden wealth.
Large-scale bonanza farming was aided by the development of machinery that greatly increased production, especially of wheat and other grains. The innovations included reapers, invented by Cyrus Hall McCormick (1809–84) and Obed Hussey (1792–1860), and steel plows developed by John Deere (1804–86).
In particular, promotion of westward settlement in the nineteenth century furthered farming interests west of the Mississippi River. Congress passed the Homestead Act (1862), which allowed for ready and cheap acquisition of vast tracts of land. Settlers could buy land for as little as $1.25 per acre or they could live on a tract and farm it for a period of five years, at the end of which they were granted 160 acres (65 hectares). In 1872 the Northern Pacific Railroad was extended to Fargo, North Dakota, allowing farmers to ship their products greater distances. Another important agricultural innovation also contributed to development of large-scale farming. Dry farming techniques (in which fields lie fallow every other year in order to support future crops by regaining their nutrients and moisture) proved a successful method for growing in the Great Plains, which were previously thought to be too dry for cultivating crops.
Deliberate government promotion of westward expansion and advances in farming turned some western farms into "bonanzas"—sources of great wealth for their owners. Encouraged by stories of success, settlers poured into the West. But not all farmers fared well, and many were severely hit by the Panic of 1873. In the 1880s a drought in the Plains states caused farm prices to drop, further hurting western farmers.