By the 1870s a new kind of settlement had appeared in the West, replacing the old order based on fur-trading posts and river-lot farms. The new emphasis was on the use of land for commercial agriculture. By the early 1870s most of Manitoba had been surveyed into townships six miles square (9.6 km2) and sections one mile square (1.6 km2). Hand in hand with the survey went the granting of homesteads by the Canadian government. The homesteader was required to pay a fee of $10 for entry and to maintain a three-year period of occupancy and cultivation to qualify for a patent.
In the early 1870s almost all homesteaders took land as near Winnipeg as availability permitted, with the largest concentration on silty soils south of Lake Manitoba. By 1880 the homesteading frontier was just reaching the present western boundary of Manitoba, with the main westward thrust along proposed railway routes near the American border and north of the Assiniboine River. The greatest expansion occurred in the early 1880s when settlement followed the proposed railway routes into Saskatchewan, particularly extending onto the prairie along the finally approved transcontinental route through Regina.
The expansion of the occupied area during the 1880s coincided with increases in crop and animal production, setting the stage for the massive increases to follow. Before 1891 crop production was concentrated in Manitoba, the area first settled. The emphasis was on wheat as the export crop, with smaller acreages devoted to animal feeds such as hay and oats for horses and cattle for the potential export of beef and dairy products. Cattle distributions in 1891 also point to a rising beef-cattle industry on the ranching frontier in southern Alberta.
Wheat acreage continued to increase in the late 1880s, particularly in the heavily settled districts of Manitoba and along railway lines. Grain-elevator capacity to handle the increased production was another factor favouring wheat growing, and by 1891 an economy based on vertical elevators had spread throughout Manitoba and to the larger centres west along the transcontinental railway. The export of wheat in 1876 from the area around Winnipeg established the reputation of Manitoba wheat and began the process of making the prairies the bread basket of the empire. By 1891 significantly larger shipments of wheat were transported almost entirely through Winnipeg and eastward along the Canadian transcontinental railway to Lake Superior.