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~ ~ ' J,:..N ;~ ,) ,-,\ l Federal Reserve Bank of Chicago January 14, 1966 EMPLOYMENT IN AGRICULTURE compared with other recent years. The number of persons working on farms during the past year averaged about 8 per cent fewer than in 1964, according to the U. S. Department of Agriculture. The decline in the previous year was about 6 per cent. Agricultural employment now totals about 5.6 million, a record low. Contributing to the decline in agricultural employment during 1965 was the strict limitation on importation of foreign workers. During the first three quarters of 1965, foreign workers provided only one-sixth as much labor as during the comparable period in 1964, the U. S. Department of Labor reported. Most of the decline was in employment of Mexican nationals. The rapid flow of farm workers out of agriculture during 1965 was greatly facilitated by the high level of economic activity in the nonfarm economy. In periods of economic prosperity, the increased availability of generally higher paying jobs in the cities tends to enhance the transfer of workers from agricultural to nonfarm jobs. In addition to the transfers to full-time jobs, many farmers and farm women take on part-time, nonfarm jobs as these become more generally available. During 1965, industrial production, one measure of economic activity, rose to a record level-about 8 per cent above the previous year. Nonfarm employment rose to a record level-about 4 per cent above 1964, and unemployment dropped to 4.1 per cent in December 1965, the lowest level since 1956. ~ Numbe,839 difficulty in obtaining qualified workers even at the higher wage rates. In contrast, prices of fertilizer have remained virtually stable, prices of building materials rose about 4 per cent and farm machinery increased about 27 per cent. These price trends, along with relatively attractive prices for most farm commodities, have stimulated investment in output-increasing and labor-saving materials and facilities. With increased adoption of larger machines, mechanization of more and more farm jobs and other technological advances-such as hybrid seeds and animals, fertilizers, pesticides and weed inhibitors-total output has increased while the number of farm workers required has declined. Total farm labor has been reduced by about one-third during the past decade while total farm production has increased about one-fifth and output per man-hour nearly doubled. Man-Hours of Farm Work Declines But Output Per Man-Hour Continues Rise 1955=100 200 180 160 Migration from farms to cities has been rapid during the past decade. Farm population has dropped from about 20 million to about 12 million. Total farm employment and man-hours of farm labor have declined about onethird. While the movement out of agriculture is largely in response to the strong demand for nonfarm workers, it reflects also the efforts of farmers to offset higher production costs by extensive reorganization and mechanization of farms. Number of Form Machines Have Increased 1955 1965 --mousand~ Motor trucks Tractors Combines Corn harvesting equipment Balers Forage harvesters Change (per cent) 2,675 4,345 980 2,925 4,625 990 + 9 + 6 + 1 688 448 202 815 795 355 +18 -H56 +76 Since 1955, wage rates for farm labor have gone up more than 36 per cent and many farmers have reported 140 120 100 80 man-hours 60 of farmwork T 1955 '57 '59 '61 '63 '65 The advance in technology and the investment of additional capital needed to utilize the new technology most likely will continue. At what pace is an open question. But the desirability of developing new technology and making the economic adjustments caused by its adoption and use cannot be questioned. The achievement of a higher standard of living everywhere is closely linked to continued technological progress. However, as long as there is such progress or consumer's desires change, there will be need for adjustments in the labor force and in the amounts and kinds of capital invested. Roby L. Sloan Agricultural Economist FARM BUSINESS CONDITIONS October 1965 with Comparisons ITEMS September October PRICES: Received by farmers (1957-59 =100) .................... Paid by farmers (1957 59=100) ....................... Parity price ratio (1910-14=100) ...................... Wholesale, all commodities (1957-59 =100) ............... Paid by consumers (1957-59 =100) ..................... Wheat, No. 2 red winier, Chicago (dol. per bu.) ............. Corn, No. 2 yellow, Chicago (dol. per bu.) ................ Oats, No. 2 white, Chicago (dol. per bu.) ...... ·········· Soybeans, No. I yellow, Chicago (dol. per bu.) ............. Hogs, barrows and gilts, Chicago (dol. per cwt.) ............ Beef steers, choice grade, Chicago (dol. per cwt.) ... ........ MIik, wholesale, U.S. (dol. per cwt.) ................... Butterfat, local markets, U.S. (dol. per lb.) ............... Chickens, local markets, U.S. (dol. per lb.) ............... Eggs, local markets, U.S. (dol. per doz.) ................ Milk cows, U.S. (dol. per head) ....................... 103 110 77 103 110 1.58 1.23 .69 2.49 23.88 26.74 4.55 .61 .14 .37 214 103 110 78 103 110 1.58 1.32 .72 2.69 23.16 2·r .08 4.41 .6o .14 .36 214 Farm labor, U.S. (dol. per week without board) ............. Factory labor, U.S. (dol. earned per week) ............... 50.25 108.88 108 -- 47.25 102.97 PRODUCTION: Industrial, physical volume (1957-59=100) ............... Farm marketings, physical volume (1947-49=100) ........... 144 180 143 138 132 175 INCOME PAYMENTS: Total personal income, u S. (annual rate, bll. of dol.) ........ 1 Cash farm income, U.S. (annual rate; bll. of dol.) .......... 541 43.6 546 43.8 499 43.4 EMPLOYMENT! Farm (millions) ................................. Nonagricultural (millions) ........................... 5.0 68.2 4.8 67.7 5.1 66.o 122 113 114 112 116 109 210 232 '207 227 '200 FINANCIAL (District member banks): Demand deposits: Agricultural banks (1957-59=100) ...••...•....••..•.. Nonagricultural banks (1957-59 =100) •....•..•......... Time deposits: Agricultural banks (1957-59 =I 00) .•..•••••••••••••••• Nonagricultural banks (1957-59 ~I 00) • • • • • • • • • • • • • • • • • • I 1964 1965 October Bosed on estimated monthly Income. Comp/led lrom olllc/ol sources by th• R•••orch Departm•nt, F•d•rol Reserve Bank ol Chicago. 98 107 76 101 108 1.52 1.23 .72 2.73 · 15.69 25.07 4.50 .59 .14 -35 '207 183
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