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Volume X X X I X Number 4 ITH FEWER FARMERSA Quarter Century of Changes in District Agriculture r x i J HE L GROW TH OF FARM PRODUCTIVITY has been aided by in creased knowledge and the application of capital. However, rapid prog ress in agriculture has its associated problems. The human effort needed to produce farm products is being reduced and fewer farm units are re quired, but total land in farms has not changed greatly. This internal transformation of agriculture in the district has involved more land per worker, more livestock per worker, more farm machinery and the application of many additional improvements in production techniques. The resource changes have resulted in more efficient performance on dis trict farms measured in value of products sold per worker at constant prices. Consumers, particularly, have benefited. F ederal St. Louis Survey of Current Conditions— p. 58 MORE PRODUCTION WITH FEWER FARMERSA Quarter Century of Changes in District Agriculture The growth of farm productivity ... T h e i n c r e a s e i n o u t p u t p e r m a n -h o u r of labor during the past quarter century has been spectacular. From 1910 to 1930 farm labor produc tivity lagged behind increasing output per man-hour in manufacturing. Since 1930 though, American agriculture has made a magnificent breakthrough in productive efficiency (Chart I). By 1954, the date of the last Census of Agriculture, the average Ameri can farm worker was producing two-and-one-third times as much per man-hour as he was in 1929.1 A clearer picture of this significant growth in farm efficiency appears if we visualize all the nation’s farms as one huge farm plant. In 1954 the plant produced 47 per cent more food and fiber with 26 i Farm workers include all operators, wage hands, or unpaid family members doing farm work or chores. This definition varies slightly from one Census to another. per cent fewer workers than in 1930 (Chart II). During this period the proportion of the nation’s labor force operating the farm plant declined from about one-fifth of the total to one-ninth. Further more, occupation statistics understate the increase in farm efficiency, since farm operators have done more and more off-farm work over the past two decades. . , has been aided by increased knowledge . . . Explanations for these rapid changes in farm labor productivity usually center around improved tech niques applied to farm production problems, and the nation’s farm research and educational facilities are given much of the credit for the change. Until the turn of the century there was little de mand by farmers for scientific research or <book 4 learning” as applied to agriculture. Methods used by father were generally thought to be good for son. Chart I Chart II Output per Man-hour, Manufacturing and Farming, United States, 1910-1954 Farm Output and Man-hours of Labor for Farm Work United States, 1910-1954 1947*100 Department of Agriculture and Bureau of Labor Statistics. Page 50 1947-49*100 USDA, Changes in Farm Production and Efficiency and New Index Numbers of Farm Marketings and Consumption. But there had been substantial gains in the mechan ization of agriculture. By 1900 most of the major farm implements had been invented, though many were not in common use except on large specialized farms primarily in the Midwest, and widespread applications of power in agriculture were yet to come. The beginning of organized research on a national scale dates back to the Morrill Act of 1862. This Act provided for a grant of 30,000 acres of land to each state for each representative and senator in Congress for the support and establishment of an agricultural and mechanical college. Another step in developing a nationwide program of agricultural education and research was taken with the passage of the Hatch Act in 1887. It provided an annual grant of $15,000 to each state for research in agriculture and gave the initial Federal financial support for the state agricultural experiment stations. Federal sup port for agricultural research was increased in 1906 with the passage of the Adams Act, and substantial additional grants for this purpose have been made during each decade since 1920. A national extension program for farmers took shape with the passage of the Smith-Lever Agricul tural Extension Act in 1914. Out of this Act has • grown the Agricultural Extension Service, the vast educational organization that carries latest research findings to farm people. In addition, the SmithHughes Act of 1917 provided Federal Aid for schools offering agricultural courses. Under this program vocational agricultural courses have been established throughout the country at the high school level. Much farm research and extension has been done by nongovernmental agencies. During the early 1900s an increasing number of well edited magazines carried news of changing farm technology to farm operators. Many farmers conducting their own re search have made valuable contributions to the store of farming knowledge and, more recently, several large commercial corporations have gone heavily into research programs. Feed, fertilizer and farm machin ery manufacturers and commercial seed producers have moved effectively into the agricultural research field. The combined efforts of these groups and gov ernment sponsored research agencies have laid the foundation for the tremendous improvements that contribute to increasing agricultural efficiency such as those in farm mechanization and land use, fertil ization and cultural practices, feeding and develop ment of new breeds of livestock and new varieties of crops. . . , and the application of capital. Without the wherewithal to apply this fertile stream of new techniques to farm operations, progress would have remained limited. American farmers have financed a large per, cent of their in creased capital needs from savings. High postwar farm prices contributed substantially to this selffinancing effort. In addition, many young farm op erators supplemented farm capital with savings from service in the Armed Forces or from on-the-job train ing programs after the war. Farm credit institutions have also played a major part in the forward march of farm technology, fur nishing funds to supplement farmers' savings. Farm mortgage credit totaled $9.6 billion in 1930, declined to a low of $4.8 billion in 1946 and rose to $9.0 billion in 1956. Non-real estate credit extended to farmers by principal lending institutions, excluding Commodity Credit Corporation guaranteed loans, declined from $2.5 billion in 1930 to a low of $1.1 billion in 1937. The volume of such credit had reached a record of $5.0 billion by July 1955. Practices and procedures of lending institutions have changed to meet the needs of a developing agri culture. Longer term loans, lower interest rates, budgeted disbursements, closer managerial super vision and better credit records are examples of such developments. Progressive lending institutions are making use of newer procedures and have done an effective job in meeting the farm credit needs of their communities. However, rapid progress in agriculture has its associated problems. Although this great upsurge in food and fiber pro duction per man-hour in recent years has contributed importantly to the development of the American economy, it has created maladjustments. Unlike many industries that can greatly expand sales with rising productivity, increases in farm sales come slowly. The human stomach is limited in size and relatively stable in its requirements. Hence, the total quantity of food consumed by the American people in a given year varies little with changes in price. Disregarding export and nonfood uses of farm out put, the adjustment necessary in the industry depends essentially on two rates of change: population growth and output expansion. For four decades prior to 1920 the rate of growth of the nation s population was generally even with or ahead of farm output expansion.2 However, since 1930 the rate of farm 2 Wilcox and Cochrane, Economics of American Agriculture, p. 493. Page 51 output has gone well ahead of the rate of increase in population. Furthermore, the export market has failed to take up the excess at prevailing (domestically supported) prices. Thus, America’s success in achiev ing an agricultural cornucopia despite the niggardli ness of nature has created the persistent farm surplus problem. The excess of farm production during World War II was used profitably to feed our Armed Forces; our allies and starving people throughout the world bene fited immediately following the war. With world production restored, surpluses began to accumulate again in the late 1940’s and have remained a prob lem since that time except for a short period during the Korean War. If maximum efficiency is desired, one apparent solu tion to the problem is the transfer of some resources out of agriculture and the concomitant recombination of resources within the industry. This article focuses attention upon such shifts in the resource structure of agriculture in the Eighth District and the con sequent increase in farming efficiency. Most of the data are taken from the Censuses of Agriculture for 1930, 1940, 1950 and 1954 with data from other sources used as indicated to supplement Census figures. County or Economic Area data were used to obtain totals for the district. For convenience, state names, unless otherwise indicated, refer only to the district portions of the states falling within the district.3 The human effort needed to produce farm products is being reduced. . . Farm labor requirements, representing about twofifths of the dollar value of the nation’s farm inputs at 1950 prices, have declined substantially in both district and nation since 1930 (Table I). In this period the nations farm workers declined in number TABLE 1 THE NUMBER OF FARM WORKERS HAS DECLINED SHARPLY IN ALL DISTRICT STATES. EIGHTH DISTRICT PER CENT PORTION NUMBER OF WORKERS IN THOUSANDS DECREASE 1840 1956 1854 1850 1930 OF STATE 1930.1956 Arkansas................ Illinois.................... Tn(1iftnfl...................... Kentucky......... Mississippi.............. Missouri.................. Tennessee............. Eighth District. United States.. 208 99 52 138 175 232 78 982 7,189 226 106 55 149 189 251 85 1,061 7,727 264 113 59 168 212 279 95 1,190 8,538 340 121 61 178 271 294 103 1,368 9,694 384 129 65 201 357 304 135 1,575 10,472 46 23 20 31 51 24 42 38 31 Source: 1930 data from Census of population; 1940 and 1950 data from Census of Agriculture; 1954 and 1956 data were estimated. 3 In area, the Eighth Federal Reserve District includes all of Arkansas, 85 per cent of Missouri, 56 per cent of Kentucky, 45 per cent of Mississippi, 37 per cent of Illinois and 26 per cent each of Indiana and Tennessee. Page 52 from 10.5 million to 7.2 million, or 31 per cent. The district decline was more rapid than that of the nation, dropping from 1.6 million to 982,000, or 38 per cent. The decrease in number of district work ers was not uniform from state to state, the district portion of Mississippi having the greatest decline of over 50 per cent during the period. Arkansas was next with a 46 per cent reduction, followed by de clines of 42 per cent in district Tennessee and 31 per cent in district Kentucky. The reduction in the dis trict portions of other states was less than the national average. A partial explanation for this disparity in farm labor shifts within the district can be found by com paring farm wage rates with rates paid workers in alternative types of employment (Table 2). There TABLE 2 IN 1954 AVERAGE HOURLY EARNINGS OF PRODUCTION WORKERS IN MANUFACTURING IN DISTRICT STATES EXCEEDED EARNING OF FARM WORKERS BY WIDE MARGINS.* AVERAGE HOURLY EARNINGS PRODUCTION WORKERS IN MANUFACTURING 2 FARM W O R K E R S 3 Arkansas.................................... $1.25 $0.57 Illinois......................................... 1.91 1.02 Indiana...................................... 1.93 0.99 1.66 0.67 Kentucky.................................... Mississippi.................................. 1.18 0.53 1.73 0.92 Missouri...................................... Tennessee.................................. 1.45 0.52 1 Averages are for entire state. 2 BLS, Employment and Earnings (Annual supplement 1956). 3 USDA, farm Labor (January, 1955). is little point in belaboring minor differences in living costs between rural and urban areas, since such dif ferences would account for only a small portion of the wide variation in earnings between hired farm workers and production workers in manufacturing. Such differences as exist fail to explain the wide variation in farm wage rates among the district states. It may be argued that wage rates do not apply to most farm workers in the area since over half of Eighth District farm workers are farm operators. However, the disparity in realized net income per farm in district states is greater than that of wage earners (Table 3). Moreover, in the states with low TABLE 3 IN 1954 REALIZED NET INCOME PER FARM VARIED WIDELY BETWEEN DISTRICT STATES.1 Arkansas.................................................................... Illinois........................................................................ Indiana...................................................................... Kentucky................................................................... Mississippi................................................................. Missouri....... .............................................................. Tennessee...................................................... ; , . . . $1,839 3,787 2,911 1,672 1,260 2,245 1,357 i USDA, The Farm Income Situation. Averages are for entire state. income per farm, the average farmers net income is only about half that of the average factory worker. In general, states with the lowest average hourly earnings for farm workers had the greatest decline in number of workers. Furthermore, the gap between farm wage rates and factory earnings is relatively large in those states where farm wage rates are low. This greater incentive to nonfarm employment has doubtless been an important factor in the rapid re duction of the farm labor force in the district portions of Tennessee, Arkansas and Mississippi. In the absence of appealing subjective values one might expect the incentive of greater earnings to pull workers out of agriculture until the returns per worker remaining are comparable to returns in other occupations. If total farm output, nonlabor costs and prices remain constant, it follows that as the number of farm workers declines, the average net income per worker must increase. Many units classified as farms in the Census are operated primarily to pro duce food for home use, and the shift of workers from such subsistence farms to other industries has little effect on total farm output. However, such shifts enhance average farm product sales per worker remaining in agriculture. The reduction of farm workers on commercial farms may also increase earn ings per worker. Often a smaller number of work ers can maintain production on a farm at or near the current level and reduce per unit costs by using additional machinery. Greater earnings per worker remaining on such farms will be achieved as long as the additional substitution of machine power and equipment is profitable. A number of forces have contributed to excess labor in agriculture. Before 1940 the rate of popula tion growth was faster in the rural areas than in urban centers, and many more boys were reared on farms than were needed to replace retiring farm operators and wage earners. This factor alone has necessitated a large transfer of workers from farm to nonfarm occupations. Moreover, the recent upsurge in farm mechanization requires more acres and fewer work ers for efficient operations. Often the nonfarm job not only requires the movement of farm workers to distant locations but also requires a willingness to accept the specific conditions of the new job. The costs of moving from the farm to locations where other employment opportunities exist are both ob jective and subjective. Money costs are not to be underrated; individual migrants generally have limited assets for financing such shifts, and pro vision must be made for maintenance while looking for work or awaiting the first pay check. The process is further complicated for workers with families and those who have reached 35 or 40 years of age. Doubt less this group of workers approaching middle age rates fairly high the possibility of failure, and the social consequences of a forced return to their former communities are strong deterrents. Also, with early retirement provisions in effect, employers are reluct ant to hire new employees at this age. The most important costs, however, are probably subjective. The worker leaving the farm must trade personal friendships and known social customs for uncertainty. Furthermore, the lack of familiarity with other occu pations creates doubts as to personal happiness and satisfaction which undoubtedly affect willingness to change occupations. The lack of knowledge of alternative employment opportunities often makes it difficult for the farm worker to obtain employment in other industries. Such knowledge can usually be obtained only by per sonal investigation because of the absence of stand ardized categories of labor services. The particular qualities and characteristics of labor are not easily measured, nor can the inexperienced readily interpret the requirements of a specific job. Thus, informa tion found in want ads will not likely be sufficient for the average farm worker to make this important decision. An additional influence inhibiting the transfer of workers out of agriculture is the loss of self-suf ficiency. Many farm operators continue to provide for a large proportion of the family food require ments from home-grown produce. Furthermore, most farmers do their own building maintenance such as house painting and plumbing repairs and minor building installations and changes. . . . and feiver farm units are required, . . . Along with the shift in labor from farm to other occupations has gone a persistent growth in size of farms and a corresponding decrease in total number of farms. Between 1930 and 1954, the number of farms declined approximately 30 per cent in the dis trict compared to 24 per cent in the nation. The greatest decline in number, and hence greatest rela tive increase in size, occurred in the district portions of Tennessee, Arkansas and Mississippi, where the farms were smallest at the beginning of the period Page 53 (Tables 4 and 5). It will also be noted that these states had the lowest average hourly earnings per farm worker in 1954. Indiana, Illinois and Missouri, with the highest earnings per farm worker, had the smallest decline in number of farms during the period. TABLE 4 THE NUMBER OF FARMS IN THE DISTRICT HAS DECLINED STEADILY SINCE 1930. EIGHTH DISTRICT PORTION OF STATE I>54 PER CERT HUMBER OF F A R M S _____________ _ DECREASE 1950 <940 <930 1930-1 §54 Arkansas............ 145,292 182,386 Wt o m . . . . . . . 67J 191 75*988 In d ian a............. 37,715 40,843 Kentucky........... 104^999 120^547 m m m & pi......... 122,184 148,766 S i s S S T ,_____ 166*298 189> 30 X ^ » » e e ........... 60,241 69>37 F4® S ric t . . 703,920 United States 4,782,393 216,674 36,129 46,927 131,359 174,402 21<£530 7 ?94 7 242,334 85,894 46,765 137,037 195,561 210,013 82,056 828,097 938,968 999,660 5,382,162 6,096,799 6,288,648 40 22 19 23 38 21 27 30 24 Source: Census of Agriculture. The Census definition of a farm varies slightly from one census yen to another. TABLE 5 FARM SIZE HAS INCREASEO. EIGHTH OISTRICT PORTION OF STATE PER CERT AVERAGE SIZ E OF FARM S IN ACRES INCREASE I>54 <859 1949 1938 1930-1954 Arkansas..................... Illinois........................... ......................... Kentucky.. ................ Mississippi.................... M&scrariL....................... Ifemesaee.................... Eighth District......... United States........... 124 158 121 I ll 89 171 88 127 242 103 142 115 99 75 154 79 111 215 83 126 103 92 59 136 73 96 174 66 124 103 86 48 133 60 86 157 88 27 17 29 85 29 47 48 54 Source: Computed from data in tables 4 and 6. . . . but total land in farms has not changed greatly. The growth of agricultural output for human use, notably enhanced by production on acres released from growing feed for horses and mules, has taken place in both district and nation on a fairly constant acreage o f farm land. After rising gradually from 1930 to 1950, total farm acreage has actually de clined in the past few years. Over the entire quarter century 1930-1954, the nation s acreage of land in farms increased only 12 per cent This compares with a district increase of 4 per cent, most of it in TABLE 6 TOTAL LAND IN FARMS HAS CHANGED LITTLE. EIGHTH DISTRICT PORTION OF STATE ____ tw 18,005 10,647 4,553 11,634 10,839 28,402 5,315 18,868 10,830 4,698 11,924 11,170 29,196 5,491 18,045 10,861 4,843 12,081 10,447 28,805 5,308 16,053 10,676 4,836 11,719 9,460 27,875 4,930 89,395 1,158,223 Arkansas. . Illinois. . . . Indiana. . Kentucky. . Mississippi. Missouri. . . Tennessee. U. S. FARM LAND IN THOUSANDS OF ACRES 1954 19 92,177 1,158,566 90,390 1,060,852 85,549 986,771 PE R CENT CHANGE <939-1954 — 6 — 1 ii + 8 u id varies slightly from one census year to another. Page 54 the Mississippi River Delta area following the installa tion of flood control measures and drainage projects. The district portion of Mississippi had the greatest proportional increase, moving up 15 per cent. Ar kansas was next, with a 12 per cent gain, most of it during the 1930 decade. A decline in farm land acreage occurred in the remaining district states between 1950 and 1954, probably because of trans fers of farm land exclusively into timber production. At any rate, the declines were greatest in the heavilyforested areas of Arkansas and Missouri. This increase in size of farms reflects not only the adoption of new ways of farming but also the greater managerial ability of present-day farm operators. Like any business, the farm is a decision-making unit in volving the organization of resources (land, labor and capital) and risk-taking. Some risks occur with a sufficient degree of regularity to be insured against; others are not insurable. The farm operator must incur such noninsurable risks, and the ability to carry such risks successfully will largely be determined by the skill and amount of training received by the farm operator. As agriculture moves full speed ahead to adopt farm improvements, increasing farm size will require greater managerial ability to make successful farm operators. This internal transformation of agriculture in the district has involved more land per worker, . . . During the last quarter century, progress toward increasing economic efficiency in district agriculture through more productive resource combinations has been phenomenal. One apparently vital aspect of the re-combination seems to be more land per worker. Studies have shown that with inadequate acreage the adoption of improved practices will enhance the existing levels of output and family living but a satisfactory minimum income often cannot be at tained. Such is the case on many district farms. The average number of acres per farm worker in the district increased from 54 acres in 1930 to 84 in 1954, an increase of 55 per cent (Table 7). The TABLE 7 BUT WITH DECLINING FARM POPULATION, FARM LAND PER WORKER HAS INCREASED MARKON*. EIGHTH DISTRICT PORTION OF STATE Arkansas................ Illinois..................... Indiana.................. Kentucky................ Mississippi.............. Missouri................ Tennessee.............. Eighth District. United States. . PE R CENT ACRES O F LAND PER FARM W ORKER <954 <959 194# 1936 80 101 83 78 57 113 63 84 150 Source: Census of Agriculture. workers. 72 96 80 71 53 105 58 78 136 53 90 79 68 39 98 52 66 109 42 83 75 58 27 92 37 54 94 Land in farms divided by INCREASE <939-1954 90 21 11 33 117 23 71 55 national increase for the period was 59 per cent. Greatest district increases occurred in Arkansas and Mississippi where acres per worker went up 90 and 117 per cent, respectively. Tennessee was next with a 71 per cent rise, and smaller increases were ob served in the district portions of Illinois, Indiana, Kentucky and Missouri. . .. more livestock per worker, . . . Another major resource adjustment in the district was an increase of livestock per worker. With the exception of chickens, sheep and lambs, all major types of livestock on district farms increased sub stantially from 1930 to 1954. Cattle and calves almost doubled in both the district and nation, and a similar increase occurred in hog and pig numbers. Chickens four months old and over declined substantially in the district, while holding almost constant nationally. Sheep and lambs declined over 50 per cent for the district and approximately 25 per cent in the nation. The livestock-per-worker changes can be demon strated more clearly by grouping all types of live stock into one common unit: the dollar value of live stock. Animals were converted into dollars by apply ing January 1, 1950 values per head to the total num ber of animals of each species.4 With prices held PER CENT CHANGE IN THOUSANDS All cattle and calves. . . . $ 923,814 All hogs and pigs. . . . 165,948 Chickens 4 mas. old and over. . . . 41,113 Sheep and lambs........... 23,091 Total . $1,153,966 1950 $ 778,077 1940 1930 $586,793 $489,872 1930-1954 +89 200,346 123,151 92,335 +80 44,491 46,112 54,537 — 25 36,006 54,757 — 58 $792,062 $691,501 +67 31,466 $1,054,380 . . . THAN IN THE UNITED STATES AS A WHOLE. PER CENT CHANGE IN THOUSANDS 1954 1950 1940 1930 Allcattfe and calves $11,783,399 $ 9,518,545 $7,523,667 $6,727,037 All hogs and pigs 1,552,928 1,515,638 925,813 1,012,193 Chickens 4 old and over 511,632 465,750 459,611 515,274 Sheep and lambs. . . . . 562,725 558,685 714,301 743,686 Total. . $14,410,684 $12,058,618 $9,623,392 $8,998,190 1930-1954 +75 TABLE 9 AT CONSTANT VALUES PER HEAD, THE TOTAL VALUE OF LIVESTOCK PER WORKER 1 ON FARMS IN DISTRICT AND NATION HAS MORE THAN DOUBLED SINCE 1930. EIGHTH DISTRICT PORI ION OF STATE Arkansas................ 1954 $ 630 1,800 1,442 1,002 477 1,788 630 Eighth District.. $1,088 United States. . . $1,865 1950 $ 461 1,487 1,151 956 326 1,503 512 $ 887 $1,412 1940 $ 317 1,058 778 585 199 1,072 343 $ 579 $ 993 1930 $198 909 658 426 113 994 203 $439 $859 PER CENT INCREASE 1930-1954 218 98 119 135 322 80 210 148 117 during the period was only 117 per cent. However, the, value of productive livestock per worker on dis trict farms in 1954 was still only about 60 per cent of the United States average. The diversity of the rate of change in livestock per worker in the various states is substantial. Although Mississippi still had less than 50 per cent of the dis trict average, its increase was over 300 per cent dur ing the 1930-1954 period. Livestock per worker in creased more than 200 per cent in Arkansas and Ten nessee. Indiana and Kentucky follow with an in crease in excess of 100 per cent, or approximately the average increase for the nation. Missouri and Illi nois, the two states which have almost the national average of livestock per worker, had the smallest inj crease during the period. +53 . , . more farm machinery . . . — 1 — 24 +60 Source: Estimated by multiplying numbers of livestock by the January 1, 1950 value per head. 4.Value per head obtained from Agricultural Statistics. An examination of the per worker increase of capi tal in the form of productive livestock further reveals the speed of change in productive resources on dis trict farms. At constant prices the value of produc tive livestock per worker on district farms increased from $439 in 1930 to $1,088 in 1954, an increase of 148 per cent (Table 9). The increase for the nation * Includes all livestock listed in Table 8. Source: Number of workers from Table 1. Total value of livestock from Table 7. TABLE 8 AT CONSTANT VALUES PER HEAD, THE TOTAL VALUE OF LIVESTOCK ON FARMS HAS INCREASED MORE IN THE DISTRICT.. . 1954 constant, changes in total value from year to year are the result of changes in numbers only. At these constant prices the total values of the major types of productive livestock in the district increased from $692 million in 1930 to $1,154 million in 1954, an increase of 67 per cent. The national increase for the period was 60 per cent (Table 8). Further evidence that district farmers are becoming highly capitalized specialists is the rapid increase of farm machinery on district farms. Eighth District farmers were later than those of other parts of the nation in making extensive use of modem machinery. In 1930 the district had approximately 15 per cent Page 55 TABLE 10 MECHANIZATION AND USE OF ELECTRICITY ON FARMS IN THE DISTRICT HAVE CONTINUED TO GROW SUBSTANTIALLY IN THE PAST FEW YEARS. THOUSANDS OF UNITS 1954 1950 1940 Autos......................... Motor trucks.............. Tractors.................... Grain combines......... Corn pickers.............. Pidk-up balers........... Electricity (farms reporting). . 456 320 479 104 78 45 643 443 251 357 70 39 24 554 1930 PER CENT INCREASE 1940-1954 411 88 107 n.a. n.a. n.a. 433 56 57 11 262 346 n.a. n.a. n.a. 289 n.a. 123 Source: Census of Agriculture. n.a.— Not available. of the nations farms and only 6 per cent of the nations tractors. However, since 1930 progress in the use of labor-saving machinery and equipment has been marked. By 1954 numbers of tractors had in creased over 300 per cent, whereas the nation’s total increased only about 200 per cent. Despite this rapid increase the district continues to lag behind the nation in the use of tractor power, having only two tractors for every three farms, whereas the national average is almost one tractor per farm. Mechanization has also come through machines other than tractors, the most dramatic increase in labor productivity having come in harvesting. One man with a two-row com picker-husker can do the work of ten to fifteen men using former hand meth ods. Self-propelled combines have made the reaper obsolete for grain and soybean harvesting. The machine cotton picker enables one man to harvest four or five bales of cotton per day or the equivalent of approximately fifteen days of hand labor. The pickup hay baler has increased the efficiency and taken much of the drudgery out of hay harvesting. These and other machines have been employed by district farmers in significant numbers during recent years (Table 10). Furthermore, electricity was used by almost all district farmers in 1954, often replacing hand labor in such operations as livestock feeding, water pumping, milking and housekeeping activities. Improved methods for controlling insect pests and plant diseases have also been factors in increasing crop yields. More recently, irrigation equipment has been installed on a wide scale on farms in areas normally considered humid; with this equipment farmers can increase yields of most crops substantially. Recent changes in techniques have also been im portant in the production of livestock and livestock products. Farmers are feeding better balanced feeds with respect to protein and other nutrients. Vitamins and antibiotic feed supplements containing growth promoting properties contribute to greater output per unit of feed. Improvement in breeds and a lower mortality rate in young animals because of better care and control of disease have also been factors in increasing the efficiency of livestock production. I he resource changes hare resulted- tn wore efficient performance on di strut -farms . -. When measured by Census values of products sold, the story of agriculture’s performance is over stated during the quarter century 1929-1954, since such values include the increment resulting from the increase in the price level of farm commodities. Moreover, Census data measure output for only one year and the selected year may vary from averTABLE IV THE VALUE OF FARM PRODUCTS SOLD HAS INCREASED MORE IN THE NATION AS A WHOLE THAN IN THE DISTRICT, 1954 COMPARED TO 1930 . . . IN THOUSANDS PORTION OF STATE 1949 1954 1939 and the application of many additional improvements in production techniques. Changes in the use of production techniques not so readily measurable as those just mentioned have strongly influenced farm production efficiency. Use of lime and commercial fertilizer has accelerated since the outbreak of World War II. Hybrid seed com has increased corn yields by approximately 20 per cent over the open pollinated varieties. Better varieties of seed have aided in pushing upward yields of such crops as oats, wheat, cotton and vegetables. Page 56 1929 1929-1954 392,851 $ 118,285 $ 187,170 491,765 $ 311,574 87,468 296,778 104,025 Indiana........... 44,142 139,369 118,451 32^289 77,232 98,325 256,235 Kentucky......... 265,967 Mississippi. . . . 312,003 75,967 157,580 244,026 Mi*50uri .. 248,255 581,770 558,307 165*057 134,049 36,571 Tennessee. . . . 144,937 62,638 Total Eighth D istrict.. . $ 2,247,385 $ 2,001,297 $ 592,869 $ 902,135 Total U. S ,. $24,644,477 $22,051,129 $6,681,581 $9,609,925 163 200 216 171 98 134 131 149 156 , PARTICULARLY WHEN COMPARED IN TERMS OF 1949 DOLLARS.1 ,, PER CENT INCREASE EIGHTH DISTRICT EIGHTH DISTRICT PORTION OF STATE 1954 IN THOUSANDS 1989 PER CENT IN CREASE 1929,1929-1954 447,059 311,950 392,851 337,957 288,494 224,277 185,759 296,778 Indiana......... 134.009 80,723 118,451 74,817 239,610 256,235 196,650 Kentucky.. . 208,735 230,203 Mississippi. . 244,026 281,084 267,085 Missouri. . . . 558,307 468,406 576.010 434,361 Tennessee. . . 128,263 134,649 107,562 109,891 Eighth $ 2,094,529 $ 2,001,297 $ 1,623,818 $ 1,614,558 District. Total U. S. . $24,644,477 $22,051,129 $17,583,108 $16,288,008 Arkansas . . •. T la__ _ lllnn i Total sales from Census of Agriculture converted to 1949 dollar values. Source: Census of Agriculture 43 55 79 22 5 23 17 30 51 age conditions because of vagaries of weather. Such value of sales data are useful, however, for making comparisons of relative change in farm output in different areas over the same periods of time. Calculations for the period 1929-1954 reveal that the greatest increases in value of Eighth District products were made in the district portions of Indiana and Illinois, where sales rose 216 and 200 per cent, respectively (Table 11). District Kentucky and Ar kansas rose slightly faster than the United States average. Increases for district portions of Missouri, Tennessee and Mississippi were well below the na tional average for the period. For the entire dis trict, value of farm products sold increased less than that of the nation. . . . measured in value of products sold per worker at constant prices. The improvement resulting from new combinations of economic resources on district farms can best be measured by output in constant dollar terms (Table 11). Technological advances in agriculture have led to a remarkable increase in value of farm products sold per worker. The increases were especially great during the years 1940-1954 (Table 12). TABLE 12 THE VALUE OF PRODUCTION PER WORKER AT CONSTANT PRICES HAS GREATLY INCREASED IN A GENERATION. EIGHTH DISTRICT PORTION OF STATE Arkansas................ Illinois.................... Indiana.................. Kentucky................ Mississippi.............. Missouri. . . . . . . . Tennessee............. Eighth District.. Total U. S........ VALUE OF FARM PRODUCTS SOLD PER WORKER BASED ON 1949 PRICES 1929 1954 1949 1939 $1,976 2,732 2,441 1,604 1,489 2,293 1,514 $1,974 $3,189 $1,491 2,626 2,014 1,526 1,150 2,005 1,414 $1,683 $2,583 Source: Derived from Tables 1 and 11. $ 994 1,861 1,315 1,171 850 1,476 1,048 $1,187 $1,814 $ 812 1,444 1,153 979 748 1,539 815 $1,025 $1,555 PER CENT INCREASE 1929-1954 143 89 112 64 99 49 86 93 105 During the quarter century 1929-1954, even after adjustment for price change, average district output per farm worker almost doubled, and in Arkansas the output increased 143 per cent. The district por tion of Indiana was next with an increase of 112 per cent, followed t[y Mississippi with 99 per cent, Illinois 89 per cent, Tennessee 86 per cent, Ken tucky 64 per cent and Missouri 49 per cent. The productivity increase per worker on district farms was substantial, averaging 93 per cent. That for the nation was even greater, averaging 105 per cent. Consumers, particularly, have benefited. This increased farm productivity has been of spe cial benefit to consumers. Output of food and fiber products has been increased, providing consumers with an abundant supply at lower cost. Increased efficiency has released workers from agriculture to produce nonfarm products and services on which consumers presently prefer to spend a larger por tion of their incomes. On the other hand, the technological advance has brought problems as well as gains to agriculture. Surpluses of many crops such as cotton, wheat and com have developed. The social structure of many rural communities has been altered as families have moved to urban centers seeking more profitable em ployment. Balancing these dislocations, however, is the greater ease of performing farm chores. Mechan ical power and equipment on the farm and in the farm home have taken much of the drudgery out of agriculture, giving the farm family more time for relaxation and recreation. C l if t o n B. L u ttrell Page 57 OF CURRENT conditions Released for publication on April 1 B u s in e s s ACTIVITY in the Eighth Federal Reserve District remained at a high level during most of March. The over-all stability of business activity was reflected in the usual decline in insured unem ployment. But as the month closed there were evi dences of slowdown in some lines of activity. Auto mobile production was reduced after mid-February and further cutbacks were scheduled for April. This cutback was reminiscent of those last year, caused by large inventories and lagging retail sales. The cur tailment of activity in the automobile industry was reflected in a drop in steel production in the nation. District mills, less dependent upon automobile busi ness, however, continued activity at a high rate. Fur ther similarities in the business picture this year and a year ago could be found in residential construction, business investment and government spending. The number of new housing starts continued to decline in February. Business investment in new plant and equipment was apparently continuing to expand al though at a somewhat slower pace than in 1956. Fed eral spending for national defense purposes increased sharply in February and in March was substantially larger than a year earlier. Industrial activity in the district maintained about the usual pattern during February and early March though with a few more minus than plus compari sons to a month and a year ago. Steel mills in the St. Louis area operated at about 97 per cent of capacity in February and March, up slightly from January but behind the over-capacity operations of a year earlier. However, the stable operating rates of St. Louis area mills contrasted with national rates, which have de clined in recent weeks. Coal mining continued to lag behind a year ago in both nation and district. Crude oil production continued as in recent months to maintain a margin above last year although cut back slightly during February in the district. Automobile production showed divergent trends in the district. In February one producer reduced out put while others ran extra schedules; In March nor mal work-weeks were scheduled, but late in the month excessive stocks again brought production cut backs. In Louisville truck engine and tractor out put picked up during the month, and hiring was scheduled to start in April’ for a new make of auto mobile. Though output of household durables was Page 58 not back to normal, there was some gain in refrigera tor production. Lumber production continued weak. Both pine and hardwood operations failed to make their usual sea sonal upturn in February and operations remained below year-ago levels during March. Outlook for the industry is dimmed by the general decline in resi dential construction. Livestock slaughter at major district meat packing centers during January and February was about 5 per cent below those months of last year, except in the Memphis area. The drop was chiefly in hog slaughter. This trend continued in March in the St. Louis area. Cutbacks in shoe production in Missouri during February resulted in widespread temporary layoffs, but operations were restored early in March. Nonresidential construction contracts awarded in a large part of the Eighth Federal Reserve District in January and February were somewhat less than a year earlier. Residential building awards, however, were greater, reflecting the inclusion of an 800-unit public housing project in Little Rock, Arkansas, cost ing $9 million, and 2,042 government owned dwell ing units costing $27 million at Fort Knox, Kentucky. In most of the metropolitan areas, residental awards were less than in the comparable period last year. The weakness in residential construction apparent in most of the district was roughly comparable to that which has been experienced for some time in the nation. In February the number of privately owned permanent nonfarm dwelling units started fell to a seasonally a d ju sted annual rate of 910,000 com p a re d with 1,127,000 a year earlier. District construction awards were also boosted by the inclusion of awards for large electric power projects, including $20 million for a generating station to serve the aluminum reduction plant being built near Evansville, Indiana. Employment in the district’s six major labor market areas was unchanged from January to February, as gains in manufacturing were canceled by losses in nonmanufacturing industries. M a n u fa ctu rin g em ployment was slightly above February a year ago, but nonmanufacturing employment was about the same. Contributing to the gains in manufacturing from January to February were hiring of workers in the refrigerator industry at Evansville and aircraft industry in St Louis, and the recalling of workers who had been previously laid off in the farm equip ment industry at Memphis and the apparel industry at Little Rock. In February nonfarm employment in the six largest metropolitan areas of the district aver aged about the same as a year earlier, while in the nation there were about 2 per cent more employed. In the six-week period from early February to late March claims for unemployment insurance in Evans ville and Louisville decreased about as much as in the same period last year. In St. Louis there was a larger drop in insured unemployment this year while in Memphis almost no change occurred compared with an increase last year. The number of unem ployed in Louisville was still substantially higher than last year but should be reduced in the near future by hirings scheduled in the appliance and motor vehicle industries. Unemployment in the St. Louis area was slightly greater than in March 1956, and the erosion of job opportunities was especially large. During March and April it is expected that about 3,000 workers will have been laid off as a re sult of transfer of the offices of two firms to other areas, closing of a brewery and elimination of a sec ond shift at a motor vehicle assembly plant. In the four weeks ending March 23 district depart ment store sales declined from the corresponding calendar weeks last year. However, the decline in sales should not be interpreted as reflecting a change in consumers’ buying attitudes. Instead, the decline was in large part because of the later date of Easter this year than last and the different timing of seasonal promotions. The basic trend of .district sales was per haps better revealed by the January and February re ports which showed sales at the same level as a year earlier. Durable goods sales, however, continued weak. Sales of home furnishings lagged at depart ment stores and new automobile sales also were slow. In Louisville, Kentucky, the number of new cars sold in the first two months of the year was about 25 per cent less than in the comparable period of 1956 and in January new passenger car registrations in Arkansas and Missouri were respectively 4 and 18 per cent less than in January 1956. No improvement was indicated in the first part of March when auto mobile sales in the nation failed to increase as hoped and continued to fall short of year earlier levels. Judging from department store sales reports, con sumer buying in the Eighth Federal Reserve District was not as strong as elsewhere in the nation. The dif ference reflected in part the relative lag of income and employment in the district. Retail sales in the nation in the first two months of the year remained high and averaged 6 per cent more than in the corresponding period of 1956. The favorable buying record of consumers reflected the improvement in their financial positions during 1956 and their continued optimism about the future. About 41 per cent of all spending units reported incomes of $5,000 or more in 1956 compared with 36 per cent in 1955. In addition, the number of spending units re porting one or more types of liquid assets increased during the year. Optimism with respect to the future was more widespread in early 1957 than the year be fore, as indicated by the slightly larger proportion ex pecting further increases in their incomes during the year. However, plans of consumers to purchase ma jor items during 1957 showed little change from early 1956, although the average dollar amount of planned expenditure was somewhat more than in 1956. Prices held fairly steady in the first three weeks of March. The index of spot primary market commodity prices increased slightly in the period while the more comprehensive wholesale price index in the week ended March 19 was virtually the same as at midFebruary. Consumer prices, however, continued to rise in February. Both wholesale and consumer price indexes averaged nearly 4 per cent higher than a year earlier. The demand for bank credit showed some strength during the four weeks ended March 20, but the in crease in loans was less than in the like period a year ago. Total volume of loans outstanding (except inter bank) at district weekly reporting banks amounted to $1,641 million on March 20, or % of 1 per cent more than four weeks earlier. Net additions to indebted ness by businesses and farmers were partially offset by reductions in the other major loan categories. A sizable proportion of the borrowing by businesses was for tax purposes. The bulk of die growth in out standing debt by these companies was concentrated in the manufacturing and mining groups. Sales fi nance companies also expanded their bank borrow ings more than the average increase during compar able weeks of recent years. On the other hand com modity dealers made large seasonal net repayments, and public utilities and contractors reduced their outstanding bank loans somewhat Planting intentions for spring crops and decreased seeding of crops last fall indicate the smallest acreage of crops since World War I. Excluding cotton, the acreage of sixteen major spring planted crops may be two million acres less than last year. The following table indicates the intended plantings in the nation for major district crops, except cotton. (MILLION ACRES) AVERAGE 1946-55 Com ...................... Spring Wheat. . . . Oats......................... Rice............. Tobacco.................. Soybeans. . ......... 1956 83.9 19.7 44.2 1.9 1.7 14.9 78.6 16.2 44.6 INDICATED 1957 74.4 12,8 1.6 43.5 1.4 22.0 22.7 1.4 1.1 Page 59 VARIOUS INDICATORS OF INDUSTRIAL ACTIVITY Industrial Use of Electric Power (Thousands of KWH per working day, selected industrial firms in 6 district cities)..................................................................................... Steel Ingot Rate, St. Louis area (Operating rate, per cent of capacity)........................... Coal Production Index— 8th Dist. (Seasonally adjusted, 1 9 4 7 -4 9 = 1 0 0 )...................... Crude Oil Production— 8th Dist. (Daily average in thousands of bb ls.)......................... Freight Interchanges at RRs— St. Louis. (Thousands of cars— 25 railroads— Termi nal R. R. A ssn .).................................................................................................................... Livestock Slaughter— St. Louis area. (Thousands of head— weekly average)............. Lumber Production— S. Pine (Average weekly production— thousands of bd. ft.). . . . Lumber Production— S. Hardwoods. (Operating rate, per cent of capacity)................ Feb. 1957*. compart■d with Jan. 1957 Feb. 1956 Feb. 1957 n.a. 98 87.8 p 394.4 + + n.a. — 4 — 9 + 4 n.a. 4 « - 0- __ 2 — 9 99.3 - 0116.6 + 1 — 6 199.3 — 3 84 — 9 + 1 * Percentage change is shown in each case. Figures for the steel ingot rate, Southern hardwood rate, and the coal production index, show the relative percentage change in production, not the drop in index points or in percents of capacity. p Preliminary, n.a. Not available. BANK DEBITS1 February 1957 (In millions) Six Largest Centers: East St. Louis— National Stock Yards, 1 ................................ .$ 11 Evansville, Ind. Total— Six Largest Centers.................... 132.7 174.3 181.3 836.8 733.8 2,173.8 $4,232.7 Other Reporting Centers: Alton, 111.................... $ Cape Girardeau, M o .. El Dorado, Ark. Fort Smith, Ark........... Greenville, Miss........... Hannibal, Mo. Helena, Ark. Jackson, Tenn............. Jefferson City, Mo. Owensboro, Ky............. Paducah, Ky. Pine Bluff, Ark............. Quincy, 111.................... Sedalia, Mo. Springfield, M o............. Texarkana, Ark............. Total— Other 32.8 16.5 27.2 51.1 26.4 9.8 8.1 23.8 71.3 49.2 25.8 37.4 36.5 14.3 78.8 17.6 CASH FARM INCOME February 1957 compared with January February 1957 1956 — — — — — — 18% 15 11 6 17 14 + 12% + 16 + 6 - 0+ 5 + 1 — 13% + 3% — 16% — 25 — 16 — 19 — 19 — 16 — 26 — 17 — 43 — 14 — 11 — 20 — 16 — 20 — 20 — 15 — + _ — — + + — + + + + + + + — 8% 16 2 1 5 5 8 9 5 13 1 3 7 2 9 4 $ 526.6 — 22% + 3% . $4,759.3 — 14% + 3% INDEX OF BANK DEBITS— 22 Centers Seasonally Adjusted (1947-194 9= 100 ) 1957 1956 Jan. Feb. Feb. 175.0 174.6 170.3 i Debits to demand deposit accounts of individuals, partnerships and corporations and states and political subdivisions. Jan. ’57 Jan. 1957 (In thousands Jan. from compared with of dollars) 1957 Jan. ’56 Jan. 1955 Arkansas. . $ 45,979 + 45% + 3% 198,507 + 27 + 39 96,615 + 17 + 18 Kentucky 70,940 + 13 — 34 Mississippi 35,747 — 25 — 15 — 4 Missouri 69,098 + 7 Tennessee . . 40,375 + 17 + 7 . 557,261 + 10 7 States. + 11 8th District . 241,616 + 4 + 1 Source: State data from USDA preliminary es timates unless otherwise indicated. Unadjusted T otal......... Residential. All Other n.a. n.a. n.a. n.a. n.a. n.a. 177.3 223.5 155.9 Seasonally adjusted n.a. T otal........... Residential. n.a. All Other . n.a. n.a. n.a. n.a. 234.1 302.0 202.5 * Based on three-month moving average (centered on mid-month) of value of awards, as reported by F. W. Dodge Corporation, n.a. Not available. Weekly Reporting Banks Assets March 20, 1957 Loans 1........................................................ Business and Agricultural.................. Security................................................. Real Estate.......................................... Other (largely consumer).................... U. S. Government Securities.................. Other Securities........................................ Loans to Banks.......................................... Cash Assets............................................... Other Assets............................................... Total Assets........................................... $1,641 883 48 274 462 836 216 14 895 43 $3,645 All Member Banks Change from F^b. 20, Feb. 27, 1957 1957 $+ 8 +18 —-3 -0 — 7 — 11 — 3 + 4 +18 + 1 $ + 17 Change from Jan. 30, 1957 $2,610 $— 13 1,840 487 — 74 —■ 2 1,418 75 $6,430 -0 + 2 $— 87 Liabilities and Capital $ 652 $— 8 $ 097 $— 40 Demand Deposits of Banks.................... Other Demand Deposits........................... 2,030 +11 3,830 — 36 Time Deposits........................................... 593 + 2 1,310 +14 85 +11 86 — 30 Borrowings and Other Liabilities........... Total Capital Accounts........................... 285 + 1 507 + 5 Total Liabilities and Capital............. $3,645 $ + 17 $6,430 $— 87 1 For weekly reporting banks, loans are adjusted to exclude loans to banks; the total is reported net; breakdowns are reported gross. For all member banks, loans are reported net and include loans to banks; breakdown of these loans is not available Stocks on Hand StocksSales Ratio Percentage of Accounts and Notes Receivable Outstanding Feb. 1, ’57. collected during Feb. Excl. Instal. Instalment Accounts Accounts 46 15 - 08th F.R. District T otal. . . — 4 % — 2% 37 Fort Smith Area, Ark. i . . — 6 — 6 + 1 40 12 — 1 Little Rock Area, A rk.. . — 5 + 1 Monthly stocks and — 8 — 16 Quincy, 111........................ — 13 stocks-sales ratio data - 0Evansville Area, Ind......... — 5 + 2 — 1 not available in time 16 40 — t — 8 Louisville Area, Ky., Ind. for publication in the — 6 — 12 - 0Louisville (C ity)................ Monthly Review. Data — 9 + 10 — 1 Paducah, Ky. 1 .................. will be supplied upon 57 16 - 0- 0St. Louis Area, Mo., 111. — 5 request. — 3 — 3 — 7 St. Louis (C ity)................ Springfield Area, M o .. . . + 8 + 10 + 8 14 31 — 4 Memphis Area, T enn .. . . — 6 + 2 — 3 All Other Cities 2 ........... + 4 + 3 1 In order to permit publication of figures for this city (or area), a special sample has been con structed which is not confined exclusively to department stores. Figures for any such nondepartment stores, however, are not used in computing the district percentage changes or in computing depart ment store indexes. 2 Fayetteville, Pine Bluff, Arkansas; Harrisburg, Mt. Vernon, Illinois; Vincennes, Indiana; Dan ville, Hopkinsville, Mayfield, Owensboro, Kentucky; Chillicothe, Missouri; Greenville, Mississippi; and Jackson, Tennessee. Outstanding orders of reporting stores at the end of February, 1957, were 3 per cent lower than on the corresponding date a year ago. INDEXES OF SALES AND STOCKS-------8TH DISTRICT Jan. Feb. 1957 1957 94 98 125 125 123 n.a. Stocks, unadjusted 4 ................................................................... n.a. 141 Stocks, seasonally adjusted 4 ...................................................... 3 Daily average 1947-49— 100 * End of Month average 1947-49= 100 n.a. Not available. Trading days: Feb., 1957— 24; Jan., 1957— 26; Feb., 1956— 25. (1947-1949 = 100) Jan. 1957 Dec. 1956 Jan. 1956 ASSETS AND LIABILITIES OF EIGHTH DISTRICT MEMBER BANKS (In Millions of Dollars) DEPARTMENT STORES Net Sales Feb., 1957 2 mos. ’57 compared with to same Jan.,*57 Feb.,'56 period ’56 INDEX OF CONSTRUCTION CONTRACTS AWARDED EIGHTH FEDERAL RESERVE DISTRICT* Percentage Change Dec. 1956 216 130 123 136 Feb. 1956 96 123 131 138 RETAIL FURNITURE STORES Net Sales Feb., 1957 compared with Jan.,’57 Feb.,’ 56 8th Dist. Total i ............................. .... + 2 1 % -(> -% St. Louis A rea............................... ......+ 2 1 + 1 Louisville A rea............................... .....+ 17 — 0— Memphis A rea...................................... + 15 — 25 Little Rock A rea............................. .... + 1 3 0 +19 Springfield A rea............................. ......+ 1 — 18 1 In addition to the areas shown separately in the table, the total includes stores in Blytheville, Fort Smith, Pine Bluff, Arkansas; Owensboro, Kentucky; Greenwood, Mississippi; and Cape Girardeau, Missouri. Note: Figures shown are preliminary and subject to revision. PERCENTAGE DISTRIBUTION OF FURNITURE SALES Cash Sales.................. Credit Sales.................. Total Sales............. Feb.,’57 14% 86 100% Jan.,’ 57 15% 85 100% Feb.,’56 14% 86 100 %
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