What Makes i 



Corn Prices? 



By JOHN C. WATSON 



^\ .ANY Illinois farmers are 



^■\^ asking why farm prices for 

 ^"^^/fl their fine 1937 crop of corn 

 fell to 40 cents or lower last November 

 and since then have hardly risen as 

 high as 50 cents. This violent change 

 has slashed off about one-half of the 

 exchange value of each bushel in pay- 

 ing for farm machinery and other in- 

 dustrial and consumers' products, and 

 in paying taxes, interest and the cost 

 of labor. 



Prices of any farm product are de- 

 termined by a combination of many 

 influences of which the most important 

 are the domestic supply, the foreign 

 supply, and general economic condi- 

 tions affecting the purchasing ability 

 of consumers whether in this country 

 or abroad. 



The truth of the above statement has 

 never had a better demonstration than 

 it has had in prices of corn in the last 

 eight years. In the face of the rapidly 

 decreasing ability of consumers, both 

 domestic and foreign, to purchase our 

 corn, including meats and other prod- 

 ucts largely produced by corn, our 

 farmers maintained and even increased 

 their harvested acreage of corn during 

 the first four years of the depression. 

 They built up the largest surplus of 

 corn in history in the period 1931 to 

 1934. All of this resulted in ruinous 

 prices for corn, meat animals and dairy 

 products, and in returns therefrom in- 

 sufficient to meet such fixed costs as 

 interest and taxes and to pay current 

 debts. Many thousands of Illinois 

 farmers lost their farms. 

 • Before the Great War, an active de- 

 mand from abroad took most of our 

 surplus agricultural products. This 

 market was largely destroyed when our 

 country ceased to be a debtor nation. 

 Exports were declining even before the 

 depression. The low prices of our 

 corn in 1931 to 1933 did not stimulate 

 exports, which fell to a lower point 

 than they had reached in many years. 

 Foreign consumers were usually able 

 to buy corn in other lands at even low- 

 er delivered cost than they could buy 

 it here. 



Imports of corn were reduced, but 

 not entirely stopped by our low domes- 

 tic prices even in 1931 to 1933. The 

 tariff duty of 25 cents per bushel could 



not prevent imports for consumption 

 on our coasts and especially on our 

 Pacific Coast, where the price of corn 

 was considerably increased by transpor- 

 tation and handling charges. It was 

 not until 1935 to 1937 that imports of 

 corn were greatly stimulated by high 

 domestic prices due to the very short 

 crops of 1934 and 1936 and by more 

 favorable rates of exchange resulting 

 from devaluation of our dollar. 

 G>rn Exports Stimulated 



The present low prices of corn and 

 shortage of foreign supplies have again 

 cut imports to small amounts. Short- 

 age of^ 1937 crop supplies, especially 

 in Argentina, expected to continue 

 largely another year because of serious 

 failure of the crop now maturing there- 

 in, has stimulated exports of corn from 

 our 1937 crop far in excess of any 

 years since 1921 and 1922. The total 

 may reach or surpass 100,000,000 bush- 

 els in the present crop year. Such ex- 

 ports have probably had some effect 

 not only in preventing further reduc- 

 tion in prices of corn, but also in 

 the small increase in prices since No- 

 vember. But we still have a huge sur- 

 plus unfavorably affecting our prices. 

 Farmers should never forget the eco- 

 nomic fact that without some method 

 of controlling surpluses, their export 

 value will also determine the price for 

 which sales can be made for local 

 consumption. 



In the present so-called recession, 

 history is trying to repeat itself. In 

 the face of reduced purchasing power 

 of consumers and a bountiful crop last 

 year which has again piled up a huge 

 surplus and brought prices far below 

 parity, the opposition, mainly centered 

 in the organized grain trade, some rail- 

 road officials, and most metropolitan 

 newspapers, are urging that all restric- 

 tions on production be abandoned. 

 Some farmers who may be justifiably 

 dissatisfied with their corn allotments, 

 are inclined to listen to them. Such 

 farmers should remember what hap- 

 pened to them in 1931 to 1933. They 

 should refuse to listen to the bene- 

 ficiaries of unlimited production when 

 they urge a policy which would large- 

 ly destroy the ability of farmers to buy 

 and thereby destroy also the market 

 for industrial products and labor. 



BEN H. PEGHAM OF LOGAN CODNTY, 

 IN HIS CLOVEB FIELD. Mr. Pegrom is 

 standing on the lin* whsra a Umaston* 

 application ended. Clearly evident are the 

 results on red clover, and an interesting 

 fact is that this limestone was put in at 

 the rate of 2 tons per acre about IS years 

 ago and still shows its influence. 



Pegrom believes strongly in limestone 

 and rock phosphate and has been able to 

 increase his crop yields markedly wi& 

 this system of permanent soil fertility. 



Get In ctnd Help 



The most discussed point having to do with 

 the crop program in my community is inequali- 

 ties in allotments. Two men with equal sized 

 farms and similar in most ways are given dif- 

 ferent bases. I think this should be changed 

 another year. I think it will be. It is rather 

 late to do much about it this year, but I feel 

 that if you and I do our duty and make our 

 wants known to the right parties that suitable 

 adjustments can and will be made. Compbin- 

 ing to your neighbor across the fence may be a 

 little more convenient but it won't get us very 

 far. 



Joining up with organizations which spring 

 up over night, that are full of radicalism, idle 

 gossip and prejudice, etc. are a detriment to 

 us all. 



Some of us are inclined to get in a rut. 

 Anything which crowds us out of that nit 

 causes friction. Because we put the back forty 

 in corn every so often, divide the sixty at a 

 certain fence post for so many years we just 

 don't want to make a change for no other 

 reason than habit. Put that question up to 

 yourself squarely. Sometimes a change does 

 us good. 



I don't think the program is perfect, but I 

 do think it is pretty good and far the best at 

 the present time. If it is not just what you 

 want, get in and help fix it to suit yourself. 



I urge all farmers to go along with th? 

 program. If you can't adapt it to your situa- 

 tion try and adapt yourself to it. It is a waste 

 of time and words to say how badly we need 

 it. Think more than twice before you help 

 kill it. If this program is rejected to the 

 extent that it becomes ineffective, I doubt if 

 another one will be available anytime soon. 

 If you have constructive criticism, OK. If you 

 have destructive criticism, you are hurting 

 yourself and the other fellow, too. If the 

 plan doesn't just fit your style, try to remem- 

 ber, there are about six million other farmers 

 for it to fit also. 



Grover Dubson, 



Douglas County, 111. 



(From WDZ radio talk) 



JUNE, 1938 



