The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F3/2 ri Federal Reserve Bank of Chicago May 29, 1958 FARM LIVING STANDARDS have risen rapidly since World War II. One indicator is the increasing-pro portion of U. S. farms having various facilities cincl,.con-B CRRENT veniences. This has been rising. R The gain results in part from the decline ir nu,mb.litiN— 9 1958 of farms. This has been centered chiefly in the ilOwerincome sector and these are the farms generallY lacking S. DEM: in modern facilities. ID:.1174T OF ml ttC If Number 458 For example, from 1950 to 1954 in the five states of the Seventh Federal Reserve District, the number of farms reporting telephones increased only 4 per cent and the number reporting electric service declined slightly. Nevertheless, the proportion of farms having telephones increased from 65 per cent in 1950 to 74 per cent in 1954; and the number with electricity increased from 91 per cent to 97 per cent. a large gain relative to the nonfarm population during World War II and the early postwar years. Since 1948, however, there has been a sizable gain in per capita income of the nonfarm population while the per capita income of the farm -population has shown a relatively small gain over its 1948 level. Thus, the ratio of per capita incomes of the farm and nonfarm populations has declined but remains well above the prewar ratio. The trend for U. S. farms is indicated by the followdata*: ing On the basis of income alone, therefore, the average level of living of farm families should have shown substantial gains and some gain relative to nonfarm families. In large part, of course, the rise in incomes reflects higher prices—inflation. Per cent of all U. S. farms having: Telephone Electricity Automobile Running water in house Home freezer Television • 1940 1945 1950 1954 1956 25 33 58 22 32 48 62 29 38 78 63 43 12 3 47 93 71 59 32 36 52 94 74 64 39 53 *Censuses, except 1956 which is USDA estimate. Farm buildings provide another evidence of agricultural conditions. Expenditures for new buildings and repairs increased an estimated 2 per cent in 1957, following a decline from the record $2.6 billion in 1952 to $2.2 billion in 1956. A further modest increase is likely in 1958. Purchases of household_ond farmstead equipment probably showed a moderate gain also in 1957. The amount of household furnishings and equipment owned by farm families increased about 50 per cent from January 1, 1945 to January 1, 1957. Consumption of electrical power per farm in 1957 was more than double the 1947-49 average, but the average cost per kilowatt hour was 19 per cent lower. The decline in cost has been due largely to the fact that many farm customers have moved into higher consumption brackets. Rate schedules-generally provide lower cost per kilowatt as consumption per customer increases. Electric bills for Midwest farmers averaged about $12 per month in 1957, compared with about $7 in the 194749 period. • The level of income obviously is the major factor determining the level of living of individual families, farm and nonfarm. Per capita income of the farm population in 1957 is estimated at $993, or about four times the 1939 figure. The income of farm residents showed Purchasing power of the $993 average 1957 income per farm resident in terms of 1947-49 dollars was equal to $850. This allows for the 17 per cent increase in prices paid by farmers for "family living items" in 1957 compared with 1947-49 prices. Thus, real per capita income of the farm population in 1957 was about the same as the 1947-49 average although about 61 per cent above the 1940 level. By way of comparison, nonfarm per capita income in 1957 was about $2,040. In real terms this was about 15 per cent above the 1947-49 average and 49 per cent above the 1940 level. Farm wages affect the incomes and level of living of the 24 per cent of the farm labor force which is hired workers. In 1957, farm wage rates were up 30 per cent from the 1947-49 average and were more than four times the 1940 level. However, there is a great variation in wage rates from area to area. Generally, there is a high correlation between the level of farm wage rates and the availability of nonfarm employment. In areas where nonfarm jobs provide attractive alternatives, wages of hired farm workers show little or no relationship to the characteristics of farms in the area. In areas where nonfarm jobs are not available, farm wages generally reflect the level of income earned by farm operators, which, in turn, reflects the amount of capital per farm—the higher the value of real estate and other productive assets the higher are farm operators' incomes and wages of hired farm workers. Research Department FARM BUSINESS CONDITIONS April 1958, with comparisons 1957 1958 ITEMS _ . PRICES: Received by farmers (1947 - 49 = 100) Paid by farmers (1947 - 49 = 100) Parity price ratio (1910 - 14 =100) Wholesale, all commodities (1947 - 49 = 100) Paid by consumers (1947 - 49 =100) Wheat, No. 2 red winter, Chicago (dol. per bu.) Corn, No. 2 yellow, Chicago (dol. per bu.) • Oats, No. 2 white, Chicago (dol. per bu.) Soybeans, No. 1 yellow, Chicago (dol. per bu.) Hogs, barrows and gilts, Chicago (dol. per cwt.) Beef steers, choice grade, Chicago (dol. per cwt.) .• . • Milk, 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) Farm labor, U.S. (dol. per week without board) Factory labor, U.S. (dol. earned per week) April March April 98 122 87 119 124 2.23 1.30 .73 2.30 20.68 29.37 3.91 .58 .19 .37 203 97 122 87 120 123 2.26 1.19 .75 2.25 21.26 29.90 4.16 .59 .21 .41 200 89 118 82 117 119 2.23 1.32 . .77 2.43 17.96 22.99 3.98 .60 .18 .30 161 41.25 80.81 81.45 - 40.75 81.59 128 87 144 90 342 34b 341 29a , PRODUCTION: Industrial, physical volume (1947 - 49 =100) Farm marketings, physical volume (1947 - 49 =100) .... 126 87 INCOME PAYMENTS: Total personal income, U.S.(annual rate, bil. of dol.) ... Cash farm income, U.S. 1 (annual rate, bil. of dol.) 343 33a EMPLOYMENT: Farm (millions) Nonagricultural (millions) 5.6 57.3 FINANCIAL (District member banks): Demand deposits: 102.5 Agricultural banks (1955 monthly average =100) average =100). monthly . . . Nonagricultural banks (1955 102.1 Time deposits: 117.2 Agricultural banks (1955 monthly average =100) 117.8 • • • Nonagricultural banks (1955 monthly average =100). 1 Based on estimated monthly income. • 5.1 57.2 5.8 58.5 101.4 98.6 100.9 100.8 116.8 116.2 107.9 108.6 a March b February Compiled from official sources by the Research Department, Federal Reserve Bank of Chicago