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<> THE FED ERHL 11 ES ERV E B~nK OF <> September 28, 1945 European food needs of from 10 to 12 million tons of imports during the next year were estimated in the last report of the OWI. Urgent needs are for 8 million tons of wheat, 800,000 tons each of fats and oils, and sugar, 650,000 tons of meat, poultry, and cheese, and 186,000 tons of milk. --President Truman declares that the country is able to fill'Europe's principal requests and .that the government ia taking necessary measures to make deliveries direct to paying nations and through UNRRA . Shipments in the last quarter of this year will total about 2¼ million tons. Secretary Anderson says a new appropriation must be mad~ by Congress for UNRRA and financial arrangements must be made with paying governments before food shipments to Europe can be increased substantially. Allocations of food to UNRRA have already absorbed all funds available to that agency, he said. Lehman, Director-General of UNBRA, told a Congressional committee that if the Agency does not get more money "we might as well fold up." Up to now about three-fourths of the Agency's operations have been financed by the us. USDA announces that meat supplies will soon be large enough to permit allocations to civilians at the rate of 140 pounds per capita beginning October 1. This compares with the current rate of 133 pounds, and 115 pounds during the second quarter of the year. Secretary Anderson expresses the belief that in view of the improving fats and oils situation· it may be possible to eliminate all food rationing except sugar into 1946. He also expressed the belief that by the middle of next year all of the food subsidy programs can be terr.J.in~ted excepting flour and sugar beets. However, he emphasized that this does not involve the price support program, which will remain in fo~ce as it must under the law. Under the potato program goverrunent purchases to support prices have been expanded to include stocks located on farms in storage in some states. Storage potatoes were previously not covered. The loan program is also expanded to permit loans on stocks in field banks or pit storage in cases where the produ~er does not have other storage facilities. Legislation has been introduced into the Senate :making potatoes a "basic" commodity and directing the Secretary of Agriculture to conduct referenda among growers as to whether or not to establish national .na.rketing and acreage quotas. Farm labor situation continues extremely tight, worse than last year, with USDA and state farm labor supervisors reported that very few workors released from war plants are willing to work on farms. The National Policy Association in a pamphlet "Farms for Veterans", expresses the view that there will not be enough farms for all veterans who want to farm~ They anticipate that in the next year about 900,000 veterans will want farms, in addition to 100,000 industrial workers and about 75,000 young men who have ''come of age" to farm. They add to these figures 500,000 veterans wanting part time farms around cities and 400,000 industrial workers in the same class. They estimate the supply at not more than 750,000 full-time farms and about 100,000 part-time farms. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AGRICULTURAL LETTER Farm Credit Administration has published regulation governing the disposal of land held by the Federal Government for -war purposes as it becomes surplus. It's estimated 5 million acres :must be turned back ultilra.tely, but probably only 3 million acres of this are good farm land . Regulations give the Federal Government first claim, state and local governments second, former owners and tenants third; and fourthly, veterans who can get family -size tracts where the acreages are broken into units instead of being sold in one piece . The Arrey has just released more than 178,000 acres of land as surplus property . The total includes five large camps, among them Camp Ellis, Illinois, totalling 53,000 acres . A Department of' Agriculture report ~n c old storage hold5-ngs of she 11 eggs as of September 1 shows that stocks are less than two - thirds of what they were a year ago or of the recent five -year average . This should not be taken to give egg producers any comfort . Unless things change radically i~ the next few months you can look for another crisis in egg prices calling for plenty of protest and government action along the price support li11e . Already, it is reported in the poultry industry that acute labor shortages in poultry and egg processing plants threaten to disturb marketing and break prices received by farmers . Fourth quarter allocations of sugar to civilian consumption will be only three-fourths of tbat allocated during the present quarter. The Brooki.."1.gs Institution in a re-port on postwar economic prospects says that war experience in this and other countries has demonstrated that the control of wage rates, the most important clement in costs, i s L~dispensable to price stabilization . This :pa.rt of the proble~ they see as inflati onary in view of the apparent policy of permitting wage incre6ses in order t o sustain purchasing power. They believe that peacetime rationing is essential to c ontrol rota~.l prices where there are acute shortages of civilian goods . On agricultU2'.'.'al ~rices it is their view that the supply is or will be so large in all e4cept a relatively few lines that extensive price declines will take place unless prices are artifidally supported . As to a speculative inflation in raw materials and fo odstui'fs they believe that the situation is in contrast to that which prevailed in 191?-20, because today there are surpluses rather than the shortages that prevail0d in the last postwar period . Hence, they see little reason for speculative inventory buying . Chester Bowles, OPA Administrator, sees little danger of inflation in rural building, because most of farm building is done "on order" rather than by speculative contracting . He says that in cities much construction is done by speculative builders and intends to ask Congress for control over construction costs in order to curb speculative urban building,which will indirectly benefit rural construction . Dairy officials of the USDA are about to launch the 1946 dairy progr9.m, which calls for continued high production with emphasis on greater efficiency of operation and sounder herd management. Research Department https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Vvalter B. Garver Agricultural Economist
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