The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
THE FEDERAL RESERVE BANK OF CIIICAGO AGRICULTURAL LETTER October 31, 1952 The financial position of farmers in the year ahead will reflect primarily broad trends in farm product prices, production costs, and volume of farm products marketed. Farm product prices have been easing downward in recent months and, for 1952 as a whole, are expected to average 3 to 4 per cent below the 1951 level. The 1953 outlook is for "more of the same. Large harvests this fall will provide abundant supplies of most crops and the pickup in cattle marketings and beef supply now under way is expected to continue through next year. Over-all farm production this year is moderately above the 1951 volume and a near record. With something like normal weather, production will continue at a high level in 1953. Thus, even with continued strong domestic demand, the effects of abundant supplies and declining exports are expected to hold prices near present levels and moderately below the 1952 average. 11 Cash recei ts from farm marketings in 1953 will probably fall a little below the 1952 total of about 33.5 billion. BAE experts suggest, however, that receipts from dairy products, chickens and eggs, corn, and oil-bear.ing crops are likely to exceed tl:o se for 1952, while smaller receipts are indicated for wheat and tobacco. Income from meat animals may show little change as volume and price effects largely balance out. In addition to the cash received from sales of farm products, farm income estimates include the value of home-consumed farm products, the rental value of farm dwellings, and Government payments to farmers. These "additions" amounted to about $4 billion this year, resulting in a gross farm income of $37.6 billion. Farmers' realized net income-the difference between gross income and total production expenses-is estimated at $14.2 billion this year, about the same as for 1951. Farm production expenses will total about $23.4 billion this yea:r. The persistent rise in production costs which has prevailed in recent years is expected to extend into 1953, adding possibly half a billion dollars to farmers' outlays. Farmers' realized net income in 1953, therefore, may decline about 5 per cent from that of the current year. Total farm assets, including the financial assets of farmers, are expected to increase about 2 per cent this year to $172 billion at year end. The value of farm real estate is up about $2 billion and farmers' financial assets, estimated at $24 billion, would reflect a billion dollar rise. Farm debts have continued their postwar rise and at year end will total about $16 billion. This would reflect a rise of $1-7 billion during the year, largely in nonreal estate debt. The current level of farm debts, although well above that at the close of World War II, is still low relative to the value of farm assets or current levels c£ farm income. The outlook, however, is for further increases in 1953. Furthermore, with farm land values levelling off and adjusting to a lower level, the postwar rise in value of agricultural assets may be halted in 1953. But farmers will still be in a general]¥ strong financial position and well equipped to turn out adequate supplies of food and fiber for a rapidly growing population. No. 168 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ernest T. Baughman Agricultural Economist Research Department FARM BUSINESS CONDITIONS SEPTEMBER 1952, WITH COMPARISONS 1952 1951 1940 September September I T E MS September August PRICES: Received by farmers ........................................... . Paid by farme.rs ................................................... . Parity price ratio ................................................ . Wholesale, all commodities ............................ .. . ·Paid by consumers ............................................ . Wheat, No. 2 hard winter, Chicago .................. . Corn, No. 3 ye 11 ow, Chicago ............................ .. Oats, No. 3 white, Chicago .............................. .. Soybeans, No .. 2 yellow, Chicago ..................... .. Hogs, barrow$ and g i Its, Chicago ................... .. Beef steers, choice grade, Chicago ................ . Milk, wholesale, U. S. .. ................................... .. Butterfat, local markets, U. S......................... .. Chickens, local markets, U. S. .. ...................... . Eggs, local markets, U.S ............................... . W,i I k cows, U. S. .. .............................................. . Farm labor, U. S. .. ............................................. . Factory labor, U, S........................................... .. PROO UC T 10 N (1947-49:100) .............. 107 109 108 36 (19-'7-49:100) ............... (1910-14=100) ... . ....._ .. 114 115 103 50 76 ( 1947-49•100) ....... -··-··-· ( 1947-49:100). " ....... _..... 112 113 103 114 a 111 a 101 ° 112 b 114b 114 a (dol. per bu.) ... "·····"·" 2.37 1. 76 2.34 1,81 (dot. per bu.)'""" ......... (dot. per bu.) .........,-,.. .92 .87 2.86 * (dol. per bu.) • • •••••M•eM•• .. 2.41 1,80 .86 ,31 .81 6.45 20. 17 32.53 21,87 33.02 20.84 36,68 (dot. per cwt.) ......,_ ..... 5.03 4.78 .73 .27 4,67 (dol. per lb.) ............... .74 .26 .68 .26 11, 15 1.82 ,27 • 14 ..o .48 .55 ,21 238 242 250 61 (dol. per head) .............. (dol. per week without board) ............ 35,75 (dol. earned per week) .. 66.85 ( 1947-49•100) ......, ........ ( 1947-4'Fl00) .......... _, .. 35,25 65.BOb U,32° 26, 10 a 121 116 129 110 118 126 70 91 (Annual rate, bll. of dol.) 267 a 2Ub 257 a .. (Annual rate, bit. of dol,) 34 35 33 9 (million•) .................. (ml 11 Iona) .................. 13.3 11. 4 13,4 15.9 54.7 55,4 54.1 36,2 52, 3 52.6 36.3 21.6 263 35.6 50,5 33,5 20.9 20,1 .. .. .. 263 257 INCOME PAYMENTS: Total personal income, U. S. 1 ....................... .. Ca sh farm income, U. S. 2 ............................ .. EMPLOYMENT, Farm .................................................................... .. No nag ri cultural .......... .......................................... FINAN CtAL: Weekty reporting member banks: 3 Demand deposits adjusted 4 ....................... . Total loans 4 ................................................ .. Con,mercial,industrial, and agricultural loans 4 U. S. Government total gross direct debt 5 .......... .. (bil. of dol.) .......... - .... (bll. of dol.) ........ - ..... (bll. of dot.) .............. (bil, of dol.) ................ b Augu1t July 1 Rovfud url .. , not comparable to data publ lahed prior to January 1949, 2 Bo ■ -d on eatlmatect monthly Income, 3 L a1t Wedn .. day of the month. 4 Rovl Hd urle1, comparable data not avolloble prior to July 1946. 5 End of month. * October 30, bid price, Compiled from off1c1al sources by the Research Department, Federal Reserve Bank of Chicago Prices received by farmers turned downward in September. The decl lne continued in October as meat animal and feed grain prices yielded to the pressure of large harvests and increased volume of marketings. indexes, however, showed only slight weaknesses. a 40.oob a 1 Industrial, physical volume ............................... . Farm marketings, physical volume ................. .. a ° .79 ,65 2,66 (dol. per cwt.) ........ -(dot. per cwt.) ............ (dot. per lb.) ............. (dol. per doz.) .............. 49 59 Wholesale and retail price Personal income has continued a generally steady to upward trend and nonagricultural employment, although off a bit from August, was above a year ago. The usual fall loan ex0an1lon got under way at commercial banks but Is expected to chalk up less than a "normal" seasonal rise. situation appears to be that of stabi I lty at a high level of activity. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The over•all economic 44
@FedFRASER