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THE FEDERAL RESERVE BANK OF CfflCAGO
AGRICULTURAL LETTER
April 21, 1950
Cash receipts from farm marketings in the first four months of 1950 will total
about 7.3 billion dollars, according to BAE estimates, five per cent less than in the
corresponding period of 1949. Prices 8!e averaging about eight per cent lower, but the
volume of marketings is up a little. Receipts from livestock and products are off about
six per cent while crop receipts are only slightly below a year ago.
The Michigan Bankers' Association in cooperation with the Agricultural Economics
Department of Michigan State Oollege sponsored a highly successful Agriculture-Finance
Clinic at East Lansing last week. The activity is similar to one held at Purdue University last month and to one scheduled at the University of Illinois at Urbana in October.
The Michigan Association received national recognition recently (Banking, April 1950) on
its program of sponsoring scholarships for farm boys and girls to the Agricultural Short
Course at the State College.
Iowa's spring pig crop probably will increase less than the seven per cent indicated last December, according to a recent survey by the Iowa Crop and Livestock Reporting
Service. Farrowings through March, which account for about one-third of the spring litters,
exceeded farrowings for the comparable period a year ago by only one per cent and for the
month of March alone showed a four per cent increase. Pigs saved per litter is above
average but about the same as last year.
Cattle on feed April 1 in 11 Corn Belt states exceeded the year-ago number by
eight per cent, according to a recent Government report. Increases for Seventh District
States were: Wisconsin, 20 per cent; Indiana, 15 per cent; Iowa, 14 per cent; and no
change for Illinois and Michigan. Feeder cattle in-shipments in January-March were onethird larger than last year. Calves accounted for 21 per cent of the cattle on feed,
compared with 12 per cent a year earlier. Cattle feeders reported intenti"ons to market
58 per cent of the animals on feed April 1 after July 1 this year, compared with 51
per cent last year.
Chicks hatched in March were at about the same level as a year ago, but there were
10 per cent fewer eggs in incubators on April 1 and 37 per cent fewer chicks booked for
May 1 delivery than in 1949, according to BAE reports. The same number of turkey poults
were hatched in March as a year earlier, but 20 per cent more eggs were in incubators on
April 1 this year.
Production of feed grains in 1950, if yields equal the 1944-48 average, may total
about 114 million tons, 10 per cent less than in 1949 but 15 per cent larger than in the
immediate prewar years. With a large part of the carry-over in CCC stocks and with increasing livestock production, prices probably will be nearer support levels than in the
Past two seasons. Also, prospects for a short corn crop in Argentina may increase foreign
demand for U.S. corn.
Dairy price supports received further attention in the past week. The American
Butter Institute recommended that the Secretary of Agriculture immediately reduce price
supports on butter to the minimum level permitted by present law (a reduction of about
three cents per pound) and urged the Congress to consider "establishment of support price
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Federal Reserve Bank of St. Louis
{over)
1evels on butterfat and milk no higher than necessary to assure protection against
disaster." To this proposal the National Milk Producers Federation took sharp except ion on the grounds that price cuts are not justified and tmt consumption can be increased by such other measures as aggressive merchandising and reduced handling costs.
Meanwhile a USDA official estimated that the Government may have to buy about
four per cent of all milk produced this year, compared with two per cent last year. He
urged the Federation members to consider other methods of supporting dairy income. In
an effort to dispose of burdensome stocks, the CCC announced that butter and cheese are
added to the list of commodities offered free to public and private welfare agencies.
Mounting price support losses, particularly on perishable commodities, is attracting increasing attention-from farmers and Congress as well as other quarters. "Selff inancingtt programs-usually involving "processing taxes" or "equalization fees"-are
suggested by some farm spokesmen. The Senate Agriculture Committee bas reconnnended giving the Secretary of Agriculture authority to cut back potato marketing quotas when a
surplus exists even though farmers had already complied with acreage allotments.
Planted acreage of sweet corn for processing is indicated to be 22 per cent below
1949 according to a recent BAE survey of processors. Acreage of snap beans for processing
1s indicated at about the same level as in 1949.
Dry edible beans produced in 1950 will be supported at a level to reflect an average of $6.30 per cwt. to farmers on the thresher-run basis for beans grading U.S. No. 2
or better.
Chicken and turkey prices will not be supported in 1950, the USDA has announced.
No. 37
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Federal Reserve Bank of St. Louis
Ernest T. Baughman
Agricultural Economist
Research Department
FARM
BUSINESS
CONDITIONS
MARCH 1950, WITIJ COMPARISONS
1950
I T E MS
MAR.
FEB.
1949
1940
MAR.
MAR.
PRICES:
Received by farmers ................. .
Paid by farmers ..................... .
Parity price ratio .................. .
~holesale, all comnodities .......... .
Paid by consumers - "cost of living"
Ytheat, No.2 hard winter, Oiicago .... .
Corn, No.3 yellow, Oiicago ......... .
Oats, No.3 white, Cliicago ......... .
Soybeans, No.2 yellow, Chicago ...... .
Hogs, barrows, and gilts, Chicago . .. .
Beef steers, good grade, Oiicago .... .
Milk, wholesale, U. S. . ............ ..
&tterfat, local markets, U. S. ..... .
Chickens, local markets , U.S ....... .
Eggs, local markets, U. S... . ....... .
Milk cows, U. S. . ................... .
Farm labor, U. S. . ........ . ......... .
Factory labor, U. S. . . .............. .
(1935-39•100) ........ .. .
(1935 -39•100) ......... ..
(1910-14•100) •••••••••••
(1935-39•100) ••••• ••••••
(1935-39•100) .. . .... .. . .
(dol.per bu.) ......... ..
(dol. per bu.) ......... ..
(dol.per bu.) ......... . .
(dol. per oo.) ......... ..
(do!. per cwt.) ......... ..
(dol. per cwt. ) .. . .. . .... .
(dol.per cwt.) . .... ... .. .
(dol. per lb.) .... .. ... ..
(dol. per lb.) ....... .. ..
(dol. per doz.) .......... .
(dol . per head) . . . .. .. . .. .
(dol. per week
without board) . .. .. .... ..
(dol. earned per week) . .. .
221
195
95
188
166a
2.35
1. 34
.78
2. 48
16.41
27. 33
3. 79
.62
.24
. 32
186
INCOME PAYMENTS:
Total personal income, U. S. 1 .. ..... .
Cash farm income, U. S,••• ....... . .. .
(Annual rate, b.il.of dol . )
(Annual rate, bil. of dol . )
EMPLOYMENT:
Farm ............................. • .. .
Nonagricultural ........... . ......... .
96
189
167b
1. 30
. 77
2. 36
16. 8 5
27. 19
3.95
.63
.22
. 3P
184
2.9. 25b
56. 37 a
PRODUCTION:
Industrial, physical volume .. . ....... . (193S-3911100)
Farm marketings, physical volume .... . (1935-39 ■ 100)
221
194
96
98
76
(98
100a
1.06
. 58
. 43
1. 14
5.13
9.86
1. 84
. 28
.13
.15
60
29.75b
54.25a
118
180
108
219a
24
218b
25
184
241
199
101
196
169a
2.27
1. 34
. 75
2.28
20.49
24.19
4. 04
.63
. 30
. 41
189
184
118
li4
10. 4
34.6
(millions)
(millions)
9.4
50.9
8.3
50.7
9.4
50. 3
(b.il. 0 f dol. )
46.2
46. 8
44.9
(b.il. of do!.)
24.9
25.0
25.0
(bi!. of dol.)
(bil. of dol. )
13.8
256
13.9
256
14.9
252
91
FINANCIAL:
Demand deposits, weekly reporting
meniber banks• ..................... .
Loans, weekly reporting member
banks, all leading cities: 2
Total• ............................ .
Ccmnercial, industrial,
and agricultural• ............... .
U.S. Gov't total gro1s direct debt••.
43
aFebruary.
bJanuary.
*Last Wednesday of the month.
**Fnd of month.
***Based on estimated monthl>• income.
1Pevised series, not comparable to data published prior to December 1948.
2Revised series, not comparahle to former series on "Weekly Reporting Member Ranks in 101 Cities."
Compiled from official sources by the Research Department, Federal Reserve Bank of Oiicago
Farm product prices continued generally steady in March. Modest price advances occurrect for
grain, poultry, eggs, fruit, an~ some types of meat animals, but their · effects were offset.by price
declines for dairy products and truck crops. Grain prices continued to advance in April. Demand for
farm products has continued at a high level. Total personal income increased moderately, but cash farm
income continues about 10 per cent below the year-ago level. Most of the current strength in farm
pro~uct prices appears to be seasonal, made effective in the markets in most instances by the withholding of supplies through price support programs. Industrial production is indicated to have increased
in March to a level eoual to the March 1949 volume .
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