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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