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THE FEDERAL RESERVE BANK OF cmCAGO AGRICULTURAL LETTER January 25, 1952 Price ceilings and supports are in the news again. OPS rollbacks of potato prices and wool ceilings have touched off widespread complaints by producer interests. The actions e.re generally interpreted as indicating a policy of fixing ceilings at about the minimum perJllissible level. Meanwhile, some congressmen have taken an interest in the matter and announced intentions of boosting the minimum ceiling level, possibly from 100 to 110 per cent of parity. Cotton •interests have proposed a change in the base grade for which parity is computed, a move which would, in effect, raise the parity price for that commodity. The CCC grain storage program is being investigated to determine responsibility for the disappeararee of corn and wheat acquired under the price support program. Secretary Brannan testified re cently that shortages of Government commodities stored in private warehouses may run from 5 to 7 million dollars. The President in his Budget Message estimated that funds needed for price support activities in the year ending July 1, 1953, would total 240 million dollars, compared with 70 million in the current year. A record number of cattle are on feed~ The January 1 total was 5.1 million head, 11 per cent more than a year earlier, according to USDA estimates . Shipments of stocker and feeder cattle into Corn Belt states in July-December were 8 per cent larger than in the corresponding period in 1950 but December inshipments were off about one-fifth from the yearago volume. More of the cattle on feed are heavyweights-over 900 pounds-than was the case last year, indicating that marketings through May probably will be in large volume. Threefourths of the cattle mve been on feed three months or less. Farmers report intentions to market 36 per cent of the January 1 number by April 1, a somewhat larger proportion than was indicated last year. More sheep and lambs are on feed than a year ago but the 3.9 million head total is still one of the smallest in the last 20 years. Nevertheless, markets have shown some weakness, which producers have attributed largely to the recent rollbacks in wool prices. Hatchery production of chicks continues at high levels. Output during December was a record and 21 per cent above the December 1950 hatch. The 1951 total exceeded the previous record by 9 per cent. This expansion reflects primarily the growth in production of broilers. Broiler prices have strengthened in recent weeks, indicating a continued strong denm.nd for chicks. Booming butter prices attract attention to the current dairy situation. In addition to the ·effects-of the seasonally low volume of milk production, butter supplies are limited by the strong demand for fluid milk. Milk production on U.S . farms in December was down 2 per cent from the year earlier volume, and on a per ca.pita basis, was the lowest for the JllOnth in records dating back to 1930. Milk dealers' average buying price for Class I milk in leading cities was $5.42 per cwt. early in January, $0.44 more than in January last year. Retail prices were up 1.6 cents a quart. Annual Ferm and Home Week shortcourses start January 28 at both the University of Illinois and Michigan State College . The programs extend over four to five days and are Packed with up-to-date reports on current farming and results of research work under way at the state experiment stations. It is an excellent opportunity for anyone closely connected with agriculture to keep abreast of a rapidly changing technology. No . 128 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ernest T . Baughman Agricultural Economist Research Department FARM BUSINESS CONDITIONS DECEMBER 1951, WITH COMPARISONS -- 1951 ITEMS December November 1950 1940 December December P RICES Received by farmers .. ........... .......... .. ....... .................. Paid by farmers ............... .... ...... ............ .. .. ... ............ .. Parity price ratio ...~ ........ .... ... .. .. ................. .... .. ...... ... ... Wholesale 1 all commodities .... .............. .... .. ........ ...... . Paid by consumers • "cost of living" ....... .... ...... ., . Wheat, No, 2 hard winter~ Chicago ....................... .. . Com, No, 3 yellow, Chicago ... ................ ........ ..... .. Oats, No, 3 white, Chicago ... ....................... ..... ... Soybeans, No, 2 yellow, Chicago ......................... ... Hog-s, barrows and gilts 1 Chicago ............ ............ , .... . Beef steers, choice grade, Chicago 1 ....... .. .. ..... ..... . Milk, wholesale, U, S, ... ....... .......... .... ..... ........ ..... .... . Butterfat, 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) 284 280 (1935·39· 100) ( 1910a 14•1Q0) ( 1935·39 100) (1935a39 1()()) (dol. per bu.) (dol. per bu. ) (dol. per bu. ) (dol. per bu. ) (dol. per cwt.) ( dol. per cwt.) (dol. per cwt.) (dol.per lb. ) (dol. per lb. ) (dol. per doz. ) (dol. per head) 222 107 222 106 266 207 108 220 187 b 2.51 218 176a 2.36 219 189 a 1.93 1.05 2.99 18.17 34.78 5.22 1.83 1.07 2.93 18.69 36.09 5.15 .76 .23 .51 252 .72 (dol. per week _ .. . without board) .. ..... .. ... .. ( dol.earned per week.) .... . (1935·39-100) ...... ...... .. ( 1935· 39• 100) ....4-••····· 97 98 80 98 101a .90 1.69 .98 3.02 18.88 32.98 4.54 .95 6.27 11.86 2.07 .23 .57 252 .65 .22 .58 218 .35 .13 .Tl 63 35.25b 65.25a 35.25 C 65.21 b 31.25 b 62.23 a 26.93a 218 167 218 190 218 170 140 121 6.5 54.6 8.9 6.8 7.5 54.3 54.1 37.3 54.2 53.0 51.8 35.5 34.5 31.1 21.6 259 20.9 17.8 257 .62 .38 PRODUCTION: Industrial, physical volume .............................. ........ Farm marketings, physical volume .......... .............. .. IN COME PAYMENTS: Total personal income, U, S, ~ ... .. ..... .................... ... . Cash farm income, U, S, •• • .............. ....... ............. (Annual rate, bil. .of .dol.)... . (Annual rate, bil, .of .dol,) .. EMPLOYMENT: Farm .. ...... ............ ...... .. .... ... ........... .... .......... .... ..... ... ... .. Nonagricultural ............... ........... ... ... ............ ............. .. (millims) ... ....... .. .............. (millions).............. .. .. ....... . F INANCIAL: Demand deposit$, weekly reporting member banks• (bil. of dol.) .............. ...... Loansl we~kly reporting member banks, all eading ctnes: 3 Total• .. .. ... ....... ....... .. ........ .. ......... .... ............. ....... .... . (bil. of dol.) ......... .......... . Commercial, induatrial, and agricuharal • ... ... .. (bil, of dal.) .................. .. U, S. Gov't total groas direct debt • • ... ... ........... .. .. . (bil. of dol.) .............. ..... . a November b Octo her c July • Last Wednesday of the month. •• End of month. 259 45 •••Based on estimated monthly income. 1 Reported as Hgood " prior to J•nuary 1951, 2 Revised series, not comparable to data published prior to December 1948, ~ Revised series, not comparable to former aerie a on • 'Weekly Reporting Member Banks in Leading Citie• of the .U. 6, '' Compiled from official sources by the Research Department, Federal Reserve Bank of Chicago "General stability" continued to describe most economic measures in December. Farm product prices were up moderately from November and, since farm costs remained stable, the parity ratio advanced a point. The major changes were in the employment and financial sectors. Farm employment was at an exceptionally low level, nearly 5 per cent below a year ago, but nonagricultural employment was well above the previous month and half a million above December 1950. Good industrial employment opportunities in many areas apparently continue to attract worker.s from agriculture. Commercial bank deposits and loans were well above month•ago and year-ago levels. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis