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THE FEDERAL RESERVE BANK OF cmcAGO AGRICULTURAL -l ETTER December 28, 1945 The Government pig crop report a.s of Deceinber l reports that the number of_ pigs saved in the fall season of 1945 was 12 per cent larger than the fall crop of 1944, but 26 per cent below the record fall crop of 1943. Intentions for 1946 spring breeding indicate that about 4 per cent more sows will be farrowe~ than this last spring. If such intentions are realized . this will be larger than the USDA _P.roductio1~oal, which calls for eubstantially the erune volume of operations as was shown for the spring of 1945. The final crop report for 1945 states that US erop production _for th~~ea~ was the third largest on record and exceeded the output for any season before 1942 by 9 per cent. It was only very slightly under the high output achieved in 1942 and 1944. Total acreages of crops harveated in Indiana and Wisconsin reached an alltime high point this year. • Secretary Anderson in his speech to the Farm.Bureau in Chicago last week said that the nation's fanners are willing to be the "lead horse 11 in an all-out drive for full ;production and employme~ but that labor and industry must c.chieve similar goals if the farmer is to keep out of trouble. • An authorization of $1,350 million for 1946 operations of UNRRA_wns pnssed by the Senate la.st week and signed by tho President. UNBRA announces o.nothor large sh_ipment of Uvestock to Pq]2.nd last week, this time 700 ma.res. Previously 1,400 draught horses nnd 1,150 dairy cattle had been sent to that country. . The National Planning Association in a recent report recommended that the US ma.ke an immediate grant of $1 billion in credits to pennit the countries of western Europe and former enemy territories not- surved by UNRRA to survive the winter without mass starvation. Thie billion dollars would be in addition to $500 million worth of ·food to be exported this winter to countries where UNRRA is operating. According to the recommendations the bulk of the needs are for grain end grain products, but the report's recommendations on meats and milk products ~lso bulk large. ' Two lean agreements were signed last week with Belgium by the Export-Import Bank, totaling $100 million. Roughly half is to be available . through June 30, 1946, and is to be ueed to buy goods and eorvices formerly requisitioned under lend-lease. The second agreement covers a line of credit to be available until June 30, 1948, and will cover a wid.e variety of US farm and factory products. In a review of the dairy situation the USDA says that under present price ceilings and with no more than a moderate drop in consumer incones from this year's levels, the nation would consume ~b-illion- pounds of milk in various forms compared with an expected production of 120 billion pounds, or in other words, supply will be only two-thirds of demand. The report indicates that 1946 exports of mil~ products will be only about half the 1945 volu.me ·and that military procurement in r46 will be only one-fourth to one-fifth of 1 45 takings. It is indicated tho.t if price ceilings were raised or removed prices for whole milk would tend to be ~-what higher and prices of butterfat l!'Ll.terially higho:;: than in 1945. But if price ceilings continue at present levels, prices pnid farm.ors for whole milk will probabl_y be lower during the flush producti on season of '46 than they wore in 1 45, mostly du-a to a doc lino in skim m-1 'lk products I prices. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURAL LETTER 2 . Secretary Anderson last we0k said that a revision of tho do.1ry price structure is necessary if thoro is to be a restoration of butter production to a moro normal relationship and if a continued high output of m:Uk is to be assured . He said that a price boost for butterfat t0 65 cents a pound would be the only way to get adequate supplies of butter back on the market , USDA announces the development of a new,faster curing :method for "aged" cheese which cuts the curing time in half, With demands for most feeds already lieavier than available supplies , the severe wintry weather has increased feed requirements mterially, with consumption of grains and concentrates holding at very high levels . Meanwhile, a.ifficulties•· ~ the feed industry in obtaining oilseed meals for their products have given rise to a discussion in USDA as to whether or not to imp0se a new order restricting tho use of protein meal for feed . The baby chicY~ who cracked their little shells during the month of November also cracked all records for November hatchings . More than 39 million chicks wore hatched in lfovembor, which was more than 10 per cent above the previous record reached in November 1943 , The Senate last week :passed and_sent to the House a bill giving the Secretary of Agriculture authority to continue ru:ral rehabilitation projects in order to permit sale of these properties to veterans. Previously these projects were ~osed to have been suspended , . USDA announces that farm consumption of fertilizer nitrogen is rising rapi~ly, Averag0 consumption of commercial product in 1940 was about 390,000 tons., and by 1944 ~twas 626,000 tons. Specialists in USDA estinnte that with moderately favorable conditions in the postwar pericd farmers would use 800,000 tons, and und3r prosperous conditiorui would use more than one million tons. In spite of a record high demand for lumber, lumber production is still declining , Shortages will continue throughout the winter, which some students of the proble~ blame on OPA price policies, labor and equipment shortages, and strikes, • The Rural Elec~ification Administration announces tests of carrier telephone e~uipment which :rw.y nnke possible the extension of telephone service to many of the nation's 2·½ million electrified farms. Carrier circuits need no soparatP. lines; the messages are transmitted over the regular power lines. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Walter B. Garver Agricultural Economist