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JD/7
F313

ri

Federal Reserve Bank of Chicago - -

•

June 16, 1961

FINAL SIGN UP IN THE 1961 FEED GRAIN PROGRAM includes farms with 58 per cent of the corn acreage and 85 per cent of the grain sorghum acreage. Farm-.
ers have agreed to retire 20.1 million acres of corn from
production which represents 24 per cent of the 1959-60
average of 83.7 million acres. An even higher percentage
of land devoted to grain sorghum production will be
retired under the program-35 per cent of the 18.7 million
acres planted the past two years.
Farms with 85 per cent of the corn acreage in Missouri are participating in the program, 81 per cent in
Nebraska, 75 per cent in Kansas, 69 per cent in Iowa,
64 per cent in-Illinois and 57 per cent in Indiana. In
Missouri 43 per cent of the corn acreage is to be retired
and in Kansas nearly a third. On the other hand, South
Dakota farmers plan to retire only 20 per cent of their
corn acreage under the 1961 feed grain program. The
high proportion of retired acreage in Missouri_ and Kansas
reflects in part the very favorable yields in 1959-60 used
in determining the payments per acre for land retired, as
well as the bad weather at planting time this spring. The
low sign up in South Dakota, on the other hand, reflects
the relatively low base yields, resulting from very serious drought in 1959.

•

Participation of Corn Producers in Feed Grain Program
Participating Farms
1959-60
average
Base
Per cent Diverted Per cent
acres
of total
acreage acreage of total
(millions)
(millions) (millions)

Illinois
Indiana
Iowa
Kansas
Michigan
Minnesota
Missouri
Nebraska
Ohio
South Dakota
Wisconsin

10.2
5.3
12.5
2.0
2.2
6.8
4.3
6.9
3.9
4.3
2.9

6.3
3.0
8.6
1.5
1.0
4.4
3.6
5.6
2.0
2.5
1.2

62
57
69
75
44
64
85
81
51
59
43

2.3
1.4
2.9
.7
-.61.6
1.8
1.7
1.0
.8
.6

22
26
23
32
25
23
43
25
26
20
21

The exceptionally high sign up of the grain sorghum
acreage reflects the very favorable production and yields
in 1959 and 1960. In the latter year good weather brought
yields almost double the long-term average in the major
producing states of the Great Plains. High sign up in
parts of Texas was undoubtedly influenced by drought
conditions this spring.

•

uiturai

While the large sign ups indicate a substantial
reduction in acreage it must be borne in mind that there
will be leakages in the program. Some acreage which
farmers indicated would be placed in the program will
not in fact be retired, and additional acreage may be'

r tter
Number 612
planted to feed grains by farmers remaining outside the
program. The higher support price on corn and othe
feed grains also will provide an incentive for intensifying efforts-to increase yields. Furthermore, those farmers in the program will retire their least productive acres
and will be able to devote more machine and labor time
to increasing output on the land remaining in production.
However, once man and machine have completed their
rounds, the unpredictable and uncontrollable forces of
nature take over. What pours forth from the harvesting
machines this fall will depend upon the elements of
nature as well as the ingenuity of man.
PASTURE CONDITIONS IN THE WEST improved
during May. However, on June 1 forecasts of range feed
conditions during the summer were quite pessimistic.
Large areas of the West with the exception of the Central
Plains and Pacific Northwest were short of subsoil
moisture. If adequate rain is not received during the
summer, the short supplies of grass will cause some
liquidation of breeding herds.
Range conditions have not been reflected to date
in slaughter of cows and calves. In April, cow slaughter
fell to the lowest level since 1952 and calf slaughter
was a record low for the month. Stock water shortages,
however, are reported to have brought movements of
yearlings already from some areas in the West. If drought
conditions should bring serious deterioration of grazing,
increased marketing from the ranching areas could weaken
the price structure for all grades of cattle. While the
present drought areas are confined to a strip running
from southern Texas, west to southern California and to
the western Dakotas-eastern Montana-Wyoming area, the
current hot, dry weather over most of the West is not an
encouraging sign for this season of the year.
FARM LOANS outstanding at member banks in the
Seventh Federal Reserve District showed only small
changes during the first quarter of 1961 and in April
were moderately above the year-earlier level (see back
of Letter). The largest increase in non-real estate farm
loans during the past year has been in Michigan-12 per
cent. Farm real estate loans outstanding at District
member banks increased 2 per cent during the first quarter and were 5 per cent above year earlier.
Research Department

Farm real estate loans outstanding,
District member banks outside Chicago
Per cent change:
December 31, 1960 to April 12, 1961
TOP:
BOTTOM: March 15, 1960 to April 12, 1961
II

+2.1
-0.1
+0.2
-3.8

IV

V1
40.9

-3.0
III
+12
December 31, 1960
to April 12, 1961
Illinois .••••••00,11
Indiana ..........••.
Iowa ••••••••••000
Michigan ... •••••
Wisconsin..••••0•••
SEVENTH DISTRICT ..

+1.0
+2.7
, +0.1
+3.2
+2.1

+0.1
+3.1

-0.6
+6.1

March 15, 1960
to April 12, 1961 •
•
•ss...
+6.2
+6.2
\
-2.8
k....
+8.2
%
+7.1

+ 7.5
+23.7

+5.3

+19'

"Short-term" farm loans outstanding,
District member banks outside Chicago
(excludes real estate and CCC guaranteed loans)
+ 4.6
+11.6

Per cent change:
December 31, 1960 to April 12, 1961
TOP:
BOTTOM: March 15, 1960 to April 12, 1961

XIII

VII
XII
1.4
+5.3

IV

+0.4
+5.1

+1.7
40.6

-1.8
-1.1

4
,

-71

VIII
-5.3
-4.7

-1.9
-5.8

IX
-4.0
+0.8

..0. .
Illinois ..
Indiana ...........
Iowa .•..• 11•00••••
Michigan . ••••••0
WisConsin••••••••00

SEVENTH DISTRICT

December 31, 1960
to April 12, 1961

March 15, 1960
to April 12, 1961

-4.6
-1.1

- 1.1
+ 6.2

-0.1

+ 0.5

+3.2
+0.4

+11.7
+ 5.7
+ 2.2

+ 8.6
+14.2

-2.1
-2.0

XI
-5.2
+0.2

XV

+0.4
+2.8

XVI
+6.0

%
..

t,

XVI
•
•
1

+ 1.0
+17.8