Full text of Agricultural News Letter : Volume V, Number 1

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AGRICULTURAL

NEWS L E T T E R

T HE F E D E R A L R E S E R V E B A N K O F D A L L A S
Volume V

Dallas, Texas, January 15, 1950

Lower Costs Mean
A 20-percent decline in the prices received
by farmers during the past 18 months has
caused a sharp reduction in income of many
farmers and has stimulated interest in pro­
grams for higher prices for farm products.
The record cotton crop in the Southwest—
a result of the large acreage and near-record
yield per acre—more than offset the effect
of a somewhat lower cotton price and has
been an important factor in maintaining the
total farm income of the area at or near
peak levels. Furthermore, it has given many
communities and individual farmers the high­
est dollar income in history. Many farmers in
communities not dependent upon cotton as
a major source of income already have expe­
rienced a substantial decline in income. More­
over, with the imposition of acreage allot­
ments on cotton, wheat, peanuts, and rice
and marketing quotas for cotton and pea­
nuts in 1950, plus a probable decline to more
nearly normal yields per acre, income from
these cash crops may decline substantially
in 1950.
Higher prices and lower costs both tend to
increase net income, and farmers will attempt
to use both devices to cushion the expected
decline in income. But an individual farmer’s
demand for higher prices has little effect in
the market place, and he has little choice but
to accept the current price if he chooses to
sell. On the other hand, there is a lot that
the farmer can do about the cost of produc­
ing the commodities that he sells, and lower­
ing costs has the same pleasant effect upon
net income as raising the price. The farmer
who produces cotton at a cost of 15 cents a
pound and sells it at 20 cents per pound will

Number 1

Income

receive the same net income as the one who
produces it at a cost of 25 cents per pound
and sells it for 30 cents. In fact, 20-cent
cotton will stimulate consumption and result
in a greater demand for cotton and, hence,
will permit a larger volume of production,
further increasing total profits.
How Can Costs Be Reduced?

Increasing production per unit — higher
yields per acre and more production per ani­
mal—is the most effective method of reduc­
ing per unit costs and increasing net profit.
Additional savings frequently can be made
by reducing total cash farm expenses.
In view of the generally low average yields
per acre and production per animal in the
Southwest, increasing productivity per unit
offers a fertile field for reducing costs. The
reductions in per unit costs that may be
achieved by this method are easily illustrated.
On any given farm the total cost of produc­
ing 150 pounds of cotton per acre is about
the same as the cost of producing 300 pounds,
except that costs of hand harvesting increase
with higher yields; but the higher yield
doubles the income and reduces materially the
cost per pound of lint. Studies have shown
that the cost per hundred pounds of milk is
cut one-fourth by increasing the production
per cow from 2,600 pounds to 4,000 pounds
(average production per cow in Texas is
about 3,100 pounds). Increasing the number
of broilers sold per 1,000 chicks bought from
800 to 900 reduces the cost of producing
broilers about 4 cents per pound. Similar
examples of lower per unit costs through in­
creased production per unit could be cited
for other crops and livestock.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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AGRICULTURAL NEWS LETTER

Increasing yields. In general, yields can be
increased by following the improved prac­
tices recommended by agricultural experi­
ment stations and extension specialists. Some
specific illustrations are:
1. Wheat yields have been doubled by fal­
lowing wheat land 1 year in 3.
2. In 1949, early season control of cotton
insects on a community-wide basis increased
yields of cotton 237 pounds—a 133-percent
increase over yields in communities not prac­
ticing early season control.
3. Use of hybrid corn has increased yields
at least 20 percent and in some cases 50 and
100 percent.
4. Planting cotton or corn following a
fertilized legume has more than doubled
yields in central and east Texas.
5. Improving pastures by seeding adapted
grasses, fertilizing, and controlling grazing
increased an Oklahoma farmer’s average
weight of calves from 400 pounds to 550
pounds.
6. A McLennan County, Texas, rancher
increased the number of calves sold per 100
cows from 70 to 90 and increased their aver­
age selling weight by 220 pounds by seeding
more productive grasses on his pastures.
7. A Hamilton County, Texas, livestock
producer built troughs for feeding cotton­
seed and saved enough cottonseed the first
year to pay for the troughs. He also sprays
his cattle six times a year to control flies and
estimates the cattle gain at least an additional
50 pounds per animal per year as a result
of this practice.
Many other illustrations could be given,
but these should serve to stimulate some
thinking toward the reduction of costs—a
reduction that is largely within the control
of each individual farmer. County agricul­
tural agents and other specialists in agricul­
ture, as well as progressive farmers, can offer
suggestions that will increase profits by lower­
ing costs.
Reducing total farm expenses. Some of the
costs of producing farm products, such as

taxes, interest, depreciation, and insurance,
are relatively "fixed” and, in the short run,
cannot be reduced materially by the farmer.
But studies of actual farm records show that
in any one year the total expenses on individ­
ual farms of the same general size and type
may vary within wide limits. Farm manage­
ment specialists make the following sugges­
tions for reducing total farm costs:
1. Reduce hired labor to a minimum.
2. Reduce tractor costs by keeping the
tractor in good repair. Operate at capacity
whenever possible.
3. Make full use of equipment, buildings,
and labor, even if it means renting additional
land. Don’t use 4-row equipment on a "2row” farm.
4. Keep expenditures for new machinery
and equipment at a minimum. Sell any
machinery not necessary to the operation of
the farm.
5. Reduce feed costs by growing more
feeds on the farm.
Expenses should not be reduced by buying
less fertilizer, inferior seed or feeds, or less
poison. It may even pay to increase expendi­
tures for such items, since they tend to in­
crease production per acre or per animal.
FARM MANAGEMENT

Clean, Dry Litter Essential for Highest
Egg Production

Clean, dry litter on the laying house floor
is essential for highest egg production during
the winter months, according to D. L. Brooks,
poultry specialist at Oklahoma A. & M. Col­
lege. Mr. Brooks lists five suggestions for lay­
ing house litter:
1. Use clean, desirable floor litter, such as
clean straw or hay, ground corn cobs, shred­
ded shucks or cornstalks, peat moss, sugar­
cane pulp, and peanut hulls.
2. Put at least 4 inches of litter on the
floor— 5 or 6 inches is better.
3. When the litter becomes broken or
dirty, add another thin layer.
4. Replace any part of the litter when
it becomes wet or badly soiled.

AGRICULTURAL NEWS LETTER

3

5. The soiled litter should be hauled to tainment, and household furnishings and
the garden plot or some other area on the equipment even though farm income de­
farm and used as fertilizer. As a precaution clines.
against reinfestation by disease germs that
may be in the litter, it should be applied on a
Electrical Wiring
spot that cannot be reached by the chickens. ElectricalCheck
wiring installed in farm build­
In addition to proper litter, sufficient floor ings several years
ago may be obsolete today
space per bird and adequate poultry house from the standpoint
of safety and economi­
ventilation are necessary for high egg pro­ cal use of power, according
to W. S. Allen,
duction.
agricultural engineer of Texas A. & M. Col­
lege. Mr. Allen points out that when many
farm buildings were first wired the chief uses
Farm Living Expense
of
electricity were for lights, and the wiring
A reduction in farm income in 1950 is system
was designed for a relatively light
not expected to be reflected in a correspond­ load. However,
addition of electric mo­
ing decrease in expenditures for farm family tors, ranges, andthea mulitude
other appli­
living, according to Mrs. Florence Low, ex­ ances freqently has increasedof the
on
tension home management economist of the wiring system beyond the capacityload
of
the
Texas A. & M. College. Mrs. Low points out original wiring. Such overloading may re­
that families do not change their spending sult in excessive heating of the wires, which
habits easily and that they tend to maintain will
insulation and could cause a
their standard of living, through use of their seriousburnfire.offThe
loss of energy resulting
savings and credit, even after income has de­ from the use of wire
that is too small to
clined. She predicts that if reductions are carry the heavier load results
inadequate
made in farm family living costs, they most voltage for efficient operation ofin motors
and
likely will be in expenditures for gifts and other appliances.
contributions, recreation, and furnishings and Faulty or inadequate wiring can be de­
equipment for the house. Amounts spent tected by watching for certain "danger sig­
for food and clothing are not expected to
some of the more common of which
change materially. Increased electrification of nals,”
are:
dimming
the lights when the refrig­
rural areas will provide a stimulus for larger erator or otherofmotor
on, decrease in
expenditures for electrical appliances, and the radio’s volume whenturns
other
equipment is
there will be a great temptation to buy these
turned
on,
and
failure
of
the
electric
range
goods even though farm income declines.
to heat as fast at chore time. Appearance of
In this connection, it might be pointed these "danger signals” indicates the need for
out that many farm families are not taking overhauling electrical wiring.
full advantage of the opportunity to reduce
cash living expenses by producing the maxi­
Get Ready for Early Chicks Now
mum quantity of home-grown food. This Plans
be made now for buying and
supplement to the family income can be pro­ caring forshould
early
baby chicks, says C. B. Ryan
duced with family labor, home-grown feeds, of the poultry department
of Texas A. & M.
and with little, if any, cash expenditure. In College. Some suggestions that
time
many parts of the Southwest a garden can be and worry—and baby chicks—willare:save
get
the
made to furnish fresh vegetables during most brooder house in good repair and thoroughly
of the year, while surplus vegetables, as well clean at least 30 days before the chicks are
as fruits, can be canned or frozen for use purchased, wash and disinfect all equipment,
out-of-season. Milk, meat, and eggs can also
check the operation of the brooder sev­
be produced on the farm, reducing materially and
eral
days in advance of the chicks’ arrival.
the cash expenditure for food and, in many
cases, making it possible to continue the pres­ Mr. Ryan also suggests that chicks be pur­
ent level of expenditures for clothing, enter­ chased from a local hatchery, if possible, and

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AGRICULTURAL NEWS LETTER

placed on feed and water as soon after hatch­ 6. A definite storage space should be pro­
ing as practicable. He emphasizes the impor­ vided for tools and supplies, and everything
tance of buying only chicks from pullorum- should be kept in its proper place.
tested and selected flocks, to minimize loss
of chicks from this destructive disease. The
FARM PRICES
hatcheryman usually knows whether the Cottonseed: The emergency purchase pro­
chicks he sells are from such tested flocks. gram for supporting the price of cottonseed
has been extended to February 15, 1950.
Eggs: The United States Department of
A 6-Step Corn Program
Agriculture
a support pro­
A recent issue of The Progressive Farmer gram for eggshasin announced
1950 which will attempt to
suggests that the following steps might well maintain the national average annual farm
be adopted as a 6-step program for increas­ price at 37 cents a dozen—about 7 cents be­
ing yields of corn:
low the 1949 support price. The exact level
1. Select land well filled with organic of support will vary by regions and in the
matter.
Southwest is expected to average approxi­
mately 25 cents per dozen.
2. Plant fairly early.
Tung nuts: The 1950 crop of tung nuts
3. Use an adapted hybrid variety.
will
be supported at 60 percent of parity, and
4. Apply enough fertilizer, high in nitro­
future marketings from the 1949 crop will
gen, to feed a thick stand.
be supported at $60 a ton—the equivalent
5. Have a stand thick enough to make of
60 percent of estimated parity.
the best use of fertilizer and moisture and Rice:
Two additional varieties, R. N. and
to produce a good yield.
Kamrose,
are to be included in the 19496. Avoid late or deep cultivation.
crop price-support program. The United
States Department of Agriculture also an­
nounced the inclusion of Arizona in the area
Suggestions for Farm Workshop
A farm workshop can serve as the center where price support on rice is available.
of activity for a great variety of farm repair
PUBLICATIONS
and construction jobs, including overhauling
the tractor, building feed troughs, repainting Oklahoma Agricultural Experiment Station,
farm machines, and inspecting machinery for
Stillwater:
worn parts and weaknesses that might cause Farmer’s 1949 Income Tax, Circular No.
a breakdown during the busy season.
421-A.
Performance Tests of Corn Varieties and
Specialists at Louisiana State University
Hybrids, 1949, Miscellaneous Publica­
point out that work will be easier and quicker
tion MP-16, by James S. Brooks and
if the shop is well lighted and designed for
Hartwill Pass.
comfort, safety, and convenience. They offer
the following check list as a guide in the Texas Agricultural Experiment Station, Col­
arrangement and maintenance of the farm lege Station:
workshop:
Summary of the Texas Corn Performance
1. A concrete floor is recommended.
Tests, 1949, Progress Report 1197, by
2. The shop should contain large win­
John S. Rogers and others.
dows to admit as much light as possible.
Crop Variety Tests at the Blackland Ex­
3. The interior should be painted a light
periment Station, 1949, Progress Report
color or whitewashed to improve visibility.
1198, by E. N. Stiver and others.
4. One side of the shop should be reserved
Greenwrap Tomato Variety Test in the
for repairing large machines.
Lower Rio Grande Valley, 1949, Prog­
ress Report 1199, by N. P. Maxwell and
5. There should be work benches along
the walls, with drawers underneath.
others.