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from the Federal Reserve Bank of Chicago May 29, 1953 FAT CATTLE of high quality should continue in plentiful supply for the next onth or so. On April 1 there were 19 per cent more cattle on 'feed in the Corn Belt than was the case a. year earlier. This stock has not yet been cleaned out. The Iowa Crop Reporting Service expects cattle and calf marketings from that state to be 51 per cent larger in June than a year ago. On the other hand, shipments of feeder cattle into nine Com Belt states were 6½ per cent lower during the first four months of this year than they were in 1952. This raises the possibility of a rise in the price of fed cattle after the heavy summer marketings--if consumer demand for beef holds up. At the same time there may be increased supplies of lower quality cattle offered for slaughter, with an accompanying weakness in pice. So it looks as if the present relatively narrow spread between the prices of high and lov, quality cattle will widen this fall. Cattle slaughter currently is reflecting an annu.al rate of some 35 million head. However, the slaughter of she-stock continues to lag, and this year the calf crop probably will total 39 million. Even though death losses must be adJed to the slaughter total, a small increase in cattle numbers this year is still in prospect. Foot-and-mouth disease was discovered in Mexico, and last Saturday the border was closed to shipments of cattle. However, veterinarians report that the outbreak was localized and they have found no further evidence of the disease. Con:paratively few cattle have been imported from Mexico in recent weeks, and none came from the disease area. FEEDING OF CONCENTRATES to livestock in the past six months has been running some 9 per cent behind a year ago. Fewer hogs and poultry were on farms. Another factor was the high quality of the 1952 corn crop compared to 1951. The higher quality feed led to a reduced quantity of feeding per animal unit. Feed manufacturers were recently cautioned against engaging in "wild and reckless" issuance of credit. At the annual meeting of the American Feed Manufacturers Association, J. D. Sykes, chairrran of the board of directors, warned of dire consequences that would follow from irresponsible extension of credit as a method of sales competition. Fertilizer sales for the first three months of this year exceeded last year's record first quarter. This conclusion was reached by the National Fertilizer Association on the basis of tax tag sales an-:! reports of shipments. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis gricu rural ~etter Number 198 THE AMOUNT OF REAL ESTATE INVESTMENT required to produce $1,000 in gross farm income tends to be lower for large farm businesses than for small operations, according to a study of census data by the USDA. As real estate investment increases, farm income increases, and at a higher rate. Generally speaking, the lower the level of gross sales, the larger the investment in real estate per ~1,000 of products sold. The following chart illustrates the relationship for Com Belt states. dollars 8,000 Rea I estate investment per Sl,000 of gross income 4,000 0 250 1,200 2,500 5,000 10,000 25,000 to to to to to and 1,199 2,499 4,999 9,999 24,999 over gross income (dollars) The study also showed that, for a given real estate investment, high levels of farm income are associated more closely with a larger size of farm than with better quality land. AUTHORITY TO SUPPORT POTATOES is being sought from Congress by USDA. Following the 1949-50 potato fiasco, Congress passed a law specifically forbidding price supports for potatoes. Now a bill has been introduced which would allow USDA to buy potatoes for use in the School Lunch program. Turkey poult production for the 1953 season to May 1 was 19 per cent below last season, USDA reported. Hatcheries pro<luced 16 per cent less heavy breed poults and 28 per cent less of the light breed type than last year. Eggs in incubators on May 1 were 11 per cent less than May 1, 1952. These reports suggest that turkey production is being curtailed more drastically than farmers indicated in January. L. John Kuti sh -- Agricultural Economist