Farm 



Management Outlook in the 

 Corn Belt 



By C. W. Crickman 



Division of Farm Management and Costs, U. S. D. A. 



THE economic position of Corn 

 belt farmers was considerably im- 

 proved at the beginning of 1936 

 as compared with recent years. Farm 

 incomes in 1935rtn 10 Corn Belt States, 

 as indicated by receipts from the sale 

 of principal farm products and from 

 rental and benefit payments, were ap- 

 proximately 15 per cent above those in 

 1934. 



All Corn Belt States did not share 

 equally in the percentage increase in 

 income, but in each State except Ne- 

 braska, where there was a slight de- 

 crease, the increase in incomes in 1935 

 in comparison with 1934 exceeded 10 

 per cent. In general, the increases in 

 incomes were larger in the eastern and 

 the Lake States in the Corn Belt than 

 in the western part of the region. 



In the eastern Corn Belt States, par- 

 ticularly in Ohio and Indiana, the re- 

 duction in crop production in 1934 was 

 less severe than in other major meat- 

 producing States. Farmers in those 

 States were not forced to liquidate 

 their livestock and have been in a bet- 

 ter position to gain from the higher 

 livestock prices of 1935, which were 

 largely brought about by the drought. 



30 Per Cent Gain 



The improvement in net incomes on 

 Corn Belt farms in 1935 was more 

 pronounced and more significant than 

 the increases in gross sales. Whereas 

 gross receipts increased approximately 

 15 per cent, such data as are available 

 indicate that net cash income from op- 

 eration increased approximately 30 per 

 cent over that of 1934. 



With incomes that again approach 

 normal, farmers have been able to 

 make capital replacements and repairs 

 and payments on delinquent taxes and 

 interest. Farm -land transfers have 

 been stimulated somewhat and higher 

 prices have been reflected in higher 

 land values. Although increases in the 

 sale prices of land have been substan- 

 tial in some instances, recent spurts 

 in land values probably are not to be 

 interpreted as early indications of a 

 land boom in the Corn Belt. 



With plentiful supplies of feed on 

 most Corn Belt farms and the present 

 favorable outlook for hog, cattle, and 

 butter prices, continued improvement 

 in farm incomes in 1936 seems likely. 

 The outlook for farmers specializing in 



cattle feeding is perhaps less certain 

 than for any other group. Farm op- 

 erating costs in 1936 will probably be 

 about the same or slightly lower than 

 in 1935. 



Com Belt farmers are faced, how- 

 ever, with major immediate and long- 

 time problems of management. One 

 year of severe drought and 2 years of 

 production control under the AAA 

 have brought about significant changes 

 in crop acreages and livestock num- 

 bers. In the 12 North Central States 

 the acreage of corn was approximate- 

 ly 14 per cent less in 1935 than in 1929. 

 On the other hand, the acreage of hay 

 and pasture had increased about 4 per 

 cent during the same period. The 

 acreage of oats and barley remained 

 about the same as in 1929. 



Big Hog Reduction 



The reduction in hog production in 

 the Corn Belt in 1935 as compared 

 with 1930, either in numbers or per- 

 centages, was the largest on record. A 

 further reduction in slaughter in the 

 marketing year 1935-'36 of from 5 to 

 10 per cent as compared with 1934-'35 

 is expected. Cattle numbers were re- 

 duced somewhat because of the feed 

 shortage following the 1934 drought, 

 but the total number of cattle on Com 

 Belt farms at the present time does not 

 represent much change from the 1930 

 situation. 



Judged from the standpoint of sup- 

 ply and price, and soil conservation, 

 the reduction in corn acreage and hog 

 production and the increase in acreage 

 of hay and pasture have been neces- 

 sary and desirable adjustments. It is 

 estimated that to control erosion and 

 maintain fertility of the land in the 

 North Central States the acreage of 

 corn should be reduced approximate- 

 ly 16 per cent, of wheat about 20 per 

 cent, of oats and barley combined 

 about 5 per cent from the 1929 base, 

 with an approximately corresponding 

 increase in the acreage of hay and pas- 

 ture. It is also estimated that if such 

 adjustments in crop acreages were 

 adopted as a long-time production 

 program, the number of hogs produced 

 annually in the North Central States 

 would probably be 12.5 per cent less 

 than in 1930, and the number of cattle 

 on farms would be increased 11 per 



cent, with an increase of about 18 per 

 cent in milk production. 



To maintain 1935 adjustments and 

 to proceed toward a permament pro- 

 duction program designed to conserve 

 and utilize most effectively the land 

 and other agricultural resources in the 

 Corn Belt present complex problems 

 of internal organization and operation 

 of the farms affected. On the whole, 

 the program of adjustment means using 

 land less intensively, and since most 

 farmers will have no opportunity to 

 farm more acres it will also mean 

 using other productive resources less 

 intensively. 



From the standpoint of the physical 

 operation of the farm, the adjustment 

 program involves seeding and obtain- 

 ing stands of soil building and high 

 feeding value forage crops, and the use 

 in feeding of more roughages and pas- 

 turage with smaller quantities of grain 

 feeds. 



Hard to Cut Costs 



FaAners may have more difficulty, 

 however, in working out the details of 

 a plan of operation that will imme- 

 diately reduce operation costs com- 

 mensurate to the reduction in volume 

 of output. Fixed charges are so large 

 a part of the costs of farm operation 

 that it is only as productive equipment 

 becomes worn out and has to be re- 

 placed that significant reductions can 

 be advantageously made in operating 

 costs. 



Furthermore, the financing of new 

 outlays incident to a shift from grain 

 production to forage production, such 

 as the expense of limestone and grass 

 seeds, presents a real problem to many 

 farmers. In this same connection the 

 necessity of waiting for a full realiza- 

 tion of returns from new methods of 

 production which are fully beneficial 

 only in their long-time influences will 

 prove a hardship to many farmers. 



Granting that the long-time benefits 

 of soil conservation and adjustment 

 of total supplies to the income side of 

 the Corn Belt farmer's business amply 

 justify some sacrifice in the use of his 

 productive resources, the problem re- 

 mains of accomplishing the adjust- 

 ments with a minimum of present dis- 

 advantage to the farmers making the 

 adjustments. 





14 



I. A. A. RECORD 



