EDITORIAL 



Siirplus Butter 



C\qOMMENTING on the surplus program of the 

 ^r^L Dairy Products Marketing Association in a recent 

 \Cj/ ^^^ before the Agricultural Club of Chicago, John 

 Brandt, president of the Land O'Lakes cooperative cream- 

 eries said that without such segregation of the surplus, but- 

 ter would likely go lower than the price of axle grease. 



The short sellers are going to be doomed to disap- 

 pointment, he said, if they expect to get this butter at 20 

 cents a pound. The 112,000,000 pounds purchased by the 

 DPMA, he explained, could be disposed of, if necessary, 

 through relief channels and foreign markets. 



"It will go back into commercial channels only if the 

 market pays the purchase price (25c a lb.) plus storage and 

 cost of operating the buying program." 



The surplus butter program unquestionably has pre- 

 vented butterfat and milk prices from going to substantially 

 lower levels. There would be no justification for this ef- 

 fort if the prices of industrial goods, rates, wages, etc. were 

 as flexible as farm prices. But everyone knows non-agri- 

 cultural prices are generally inflexible, rigidly maintained 

 by production control and other arbitrary means. To 

 prevent agricultural prices from sliding down to the ruin- 

 ous levels of 1932 thus dragging the entire country into 

 another major depression, justifies the full support of a 

 government concerned with the general welfare. 



The weakness, of course, in any surplus buying pro- 

 gram comes when there is no systematic plan for down- 

 ward adjustment of production. In this case not many 

 dairy farmers will be influenced to increase their production 

 with butter at 25 cents a pound. Twenty-five cent butter is 

 not a satisfactory price but it is better than 1 5 cents or 20 

 cents. The problem of adjusting dairy production down- 

 ward is a difficult one, yet it will take just such action or a 

 sharp upturn in industrial employment and consumer buy- 

 ing power before milk and butterfat prices are restored to 

 profitable levels. 



bushel for those who complied with allotments. Add to 

 this, 10 cents a bu. parity payments and you have a pro- 

 spective value of around 70 cents a bushel for those who 

 made the adjustment this year. 



That there will be a much higher percentage of AAA 

 cooperators in the corn belt next year, given a similar pro- 

 gram in 1939, seems another safe forecast. 



Prophecy 



( i Ov HIRTY-FIVE cent corn or less next fall is not 

 ^^-^ only possible but probable if corn-belt farm- 



^^ ers plant their usual acreage and we have 

 normal weather this year." 



This prophecy made in an lAA news release on April 

 21, 1938, when the average farm price was 52.7 cents, 

 hit pretty close to actual conditions today. 



"The choice offered every farmer," the statement con- 

 tinued, "is to cooperate in making possible a return of 70 

 cents or more per bushel, or to assist in piling up another 

 huge surplus with disastrous prices such as we had in 

 1932." 



Thanks to at least 50 per cent of corn growers who co- 

 operated in the AAA program, the farm price of old corn 

 while not satisfactory is still higher than it would be with- 

 out a program. The non-cooperators are benefitting there- 

 by. Without such cooperation the price undoubtedly would 

 be closer to 25 or 30 cents a bushel. 



There will be two prices for com this fall, the open 

 market price for the non-cooperators (about 34 cents for 

 new com today) and the loan price of 57 to 61 cents a 



Industrial Outlets ior Farm Products 



^^^^HE salvation of the farmer through industrial uses 



V^ of surplus farm products and by-products is a 

 ^^ long way off in the opinion of H. T. Herrick, 

 assistant chief of the Bureau of Chemistry and Soils in the 

 U. S. Department of Agriculture. 



In addressing the convention of the American Chem- 

 ical Society Herrick is quoted as saying "The agricul- 

 tural millenium is not just around the corner .... 

 anyone familiar with the measured progress of a well- 

 organized research program must realize that at least 10 

 years must pass before the full impact of this mass research 

 (four new laboratories being established by government) 

 on the problem of industrial utilization of agricultural 

 products becomes apparent." 



It isn't so difficult to convert farm products into use- 

 ful industrial products, but it is a tough assignment to find 

 new uses which can pay farmers somewhere near parity 

 prices for their corn, wheat, cotton, and other basic crops. 

 The wisdom of mining the fertility of the soil by producing 

 surpluses to sell at abnormally low prices for industrial 

 purposes is at least open to question. 



The fact that corn processors are taking from 80,000,- 

 000 to 100,000,000 bu. of corn a year for starch and other 

 maize products unquestionably has a beneficial influence on 

 the price of com. Similarly soyoil paints, soybean flour, 

 soybean plastics, etc. make better prices for soybeans. But 

 until the chemist finds new uses for the farmers' products 

 that can pay him a fair price, it seems only wise to adjust 

 agricultural products, insofar as possible, to the available 

 market. 



Regulating the Trucks 



\J^^HE Uniform Motor Vehicle Laws Commission 

 ^~~-^ created by the last General Assembly, is quoted 

 %J as charging that farmers, merchants, coal dealers 

 and others are in danger of being mled off the highways 

 by the issuance of certificates by the State Commerce 

 Commission giving certain trucking companies exclusive 

 monopolies to specified highways and city streets. 



Thus far, to our knowledge, there has been no such 

 restriction as that indicated. Moreover, it doesn't seem 

 conceivable that there will be, for to turn the highways 

 built at public expense over to trucking monopolies operat- 

 ing for private profit doesn't appear to be good public 

 policy. "The Illinois Agricultural Association is on record 

 favoring protection of the public against mechanically de- 

 fective tmcks and reckless truck drivers but will vigorously 

 oppose unnecessary and unwise regulations that increase 

 transportation costs and hamper the proper use of the high- 

 ways by farmers and others in marketing farm products. 



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L A. A. RECORD 



