The Farmers Union was formed as the Farmers' Educational and Cooperative Union in the Rains County town of Point. The organization was the basis for the National Farmers Union, which has been active in agricultural and rural public policies since it was first incorporated in 1902 by Isaac Newton Gresham, a small newspaper editor in Point. Because of the failure of the Farmers' Alliance and the People's Party to maintain a sustained movement and organization on behalf of farmers, Gresham was well aware of the political problems facing another organization. Therefore, the first ten charter members brought a variety of backgrounds and political persuasions when the Farmers Union was officially incorporated by the Texas secretary of state on August 28, 1902. The founders included a newspaperman, a county clerk, a physician, a teacher, and six farmers. Politically, there were three populists, one Socialist, one Independent, and five Democrats.
The first local was organized at Smyrna, southwest of Emory in Rains County. At first the organization was confined to Rains County, but success there in collective bargaining over cotton sales led to rapid expansion into the South, the Midwest, and the far West. Many of the new local unions were formed from still-existing community branches of the defunct Farmers' Alliance. Like the alliance and the Grange, which preceded it, the Farmers' Union grew rapidly while joining was a novelty and large benefits from organization were anticipated. In 1910 the membership was 121,800, with the greatest strength in the Gulf states. In 1919 the union had 140,000 members, but by 1930 membership had fallen to 91,109. Many of the organizers were, like Gresham, former members of the alliance or the Grange. However, by 1906, internal dissention had already developed within the organization over the qualification of members who were not full-time farmers. This included Gresham and many of the charter members, who lost power after the Texas state convention in 1905.
In the beginning, the union's major objective was to gain control of cotton marketing. Cotton prices had dropped steadily since 1890, when cotton sold for ten cents a pound, to less than six cents by 1898. The Spanish-American War caused an upsurge in the market, and by 1907 cotton reached twelve cents a pound. However, prices again declined for the next five years, while production increased. The local and state unions worked to establish farmer-owned cooperative warehouses where producers could store their cotton and receive certificates of deposit that could be used as loan collateral. In this system, farmers could hold their crops off the market during the usual period of low harvest-time prices. Although many warehouses were founded in Texas, however, they could not prevent cotton prices from dropping to six cents a pound again after the panic of 1907. Efforts by the union leadership to withhold cotton from the market in order to increase the price also failed to have a significant effect before World War I.
In addition to emphasizing the importance of cooperatives and political involvement, the Farmers Union advocated many other reforms that eventually occurred. Some of these included better education for rural children, improved roads, diversified production, and better farm-management training for farmers. Although membership in the Farmers Union declined from a high of 100,000 in Texas in 1908, the organization continued to expand among the grain farmers of the Midwest. Unlike its predecessors, the organization did not attempt to form its own political party.
Although the union all but disappeared from other southern states after the 1920s, the Texas Farmers Union remained a part of the National Farmers Union in 1990, when it had 10,000 members. The organization is governed by an executive board of nine members elected from designated districts. The president and vice president are selected from the membership at large. County presidents serve on the full board of directors. All officers are elected for a term of two years, and the organization holds annual conventions at various cities around the state. The Texas Farmers Union has maintained an active program consistent with the philosophies of its founding members. It has worked at the state level for programs to increase agricultural education and marketing of commodities through such measures as loan programs. Also, rural health programs, improved public school funding, education, and transportation remain priorities. The Texas Farmers Union sponsors the Senior Texans Employment Program, the first program of its type in the United States when it was instigated by the Texas legislature in 1973. STEP enables retired persons in rural areas to work with nonprofit groups and government agencies for improvements. At the national level, the union supports supply-management programs for commodities in an effort to ensure a sufficient food supply for domestic and export needs while also providing for a strategic reserve. The Texas Farmers Union has its headquarters in Waco and legislative offices in Austin and Washington, D.C.