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4 Fe eral Reserve Bank of Chicago fO ls 51 April 23, 1954 ___ ri It, rat tter WELCOME RAINS drenched important agricultur 1 CURRENT regions of the nation during the past week. Crop prospects improved, especially in the eastern Corn I Belt. Spring work continues to be well advanced for the season. Plowing for corn is about threefourths done in Iowa and Illinois, compared with a; nR"'"FNT OF 4,3 Number 245 normal of 40 to 50 per cent for this time of ponents. o van ints of view jockey for position. Final legislative action is not expected OUTSTANDING market development has been before June, and the outcome, of course, will rethe upsurge in soybean prices which topped $4.00 main uncertain until that time and, in fact, until for the May contract at Chicago this week for the the President acts on the bill or bills. first time since 1948. The all-time high was $4.43 a bushel in January of that year. FEEDER CATTLE continue to be purchased by Midwest farmers in substantial volume. Total Prices of soybean meal, as well as other proin-shipments into nine states in March amounted to tein supplements, have strengthened. This has pro220 thousand head, compared with 124 thousand in vided a favorable setting for the ,USDA to launch a March of last year. The January-to-March total is program to dispose of surplus stocks of dry skim milk as livestock feed. The plan is to sell the 610 thousand this year compared with 403 thousand in the previous year. The number of cattle on dry milk to feed mixers for use as replacement of other protein supplements. The CCC has about 90 feed April 1 was only slightly below the year-ago million dollars invested in the approximately 300,000 number although the January 1 numbers showed a tons it owns. As livestock feed it has a value of drop of 9 per cent. about 21 million dollars. Most market analysts continue to expect stable to moderately rising prices for top grades of fed GOVERNMENT PURCHASES to support prices of cattle until midyear with relatively stable prices dairy products continue in substantial volume. Hence thereafter. The lower grades of cattle, however, there continues to be a strong interest in disposal are expected to experience, tough competition from programs. Major difficulty, of course, is devising heavy marketings from ranges and pastures in the programs which will increase consumption without summer and fall. Total slaughter of cattle and seriously disrupting the market distribution of current calves in the first quarter of this year was nearly production. a fifth above the first quarter of last year and is expected to remain above the year-ago volume. A butter disposal program now reported to be scheduled for trial would make CCC butter availAverage prices of beef steers at Chicago in able to distributors at a nominal price, possibly the week ended April 15 was $23.96, compared 10 cents a pound, in a ratio to their sales of with $21.18 in the year-ago period. Choice steers butter from commercial stocks, possibly one pound averaged $25.04, compared with $21.70. Feeder of CCC butter to three pounds of commercial steer prices showed a smaller gain over a year butter. Distributors could then sell at an average ago-421.15 compared with $20.70. Nevertheless, price below the support level. the outlook for feeder cattle purchased to be In effect, such programs subsidize the prograzed during the summer and sold in the fall reduction and consumption of the supported commodity. mains rather dim. The major uncertainty is: how far must butter prices be reduced to move current production into FERTILIZER use continues to expand. The consumption and make some inroad on stocks altotal for last year is estimated at 23 million tons, ready accumulated. Also of concern to producer about 3 per cent above the previous year's figure. groups is what will be consumer reaction once the A recent survey made through Seventh District member banks indicates that dealers had orders for "bargain stocks" are used up and the subsidy ends. spring delivery of 6 per cent more fertilizer this The disposal program would have the beneficial year than in 1953. effect 'of bringing domestic butter prices more nearly into line with world prices. This would reduce the possibility of complaints from domestic consumers AGRICULTURAL CREDIT SCHOOL of the Iowa that the Government was selling butter at lower Bankers Association is scheduled for June 14-25 at prices to consumers in other countries. Thus, the Ames. Enrolment is limited and registrations are road may be opened for sales of surpluses to nareported to be coming in fast. Interested banks tions behind the Iron Curtain. should contact a B. Howell at the college. Congressional committees continue intensive study of controversial farm policy issues as proErnest T. Baughman -- Assistant Vice President
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