Market Outlook f 



'VEN before the Europ>ean War 

 began with Germany's invasion 



_ of Poland Sept. 1, business con- 

 ditions in America were improving. 

 Steel plants were taking on more men, 

 construction was going forward and 

 the general outlook was for more in- 

 dustrial activity and bigger factory pay- 

 rolls the last half of '39. A stronger 

 demand for farm products was indi- 

 cated. 



Declaration of war by England and 

 France greatly accelerated this move- 

 ment. For a few days speculators shot 

 stock and commodity prices skyward. 

 Steel mills were swamped with orders 

 from domestic buyers scared of ad- 

 vancing prices. Housewives raided 

 sugar and other staple supplies at local 

 stores. Retailers ran short, wholesalers 

 had difficulty meeting the sudden de- 

 mands, and grocers and butchers 

 worked overtime marking up prices. 



Then reason and sober judgment 

 gained the upper hand. There was a 

 sharp downward reaction in many 

 stocks and commodities, yet bullish 

 sentiment prevailed. Toward the close 

 of September wheat, corn, hogs, cattle, 

 as well as other commodities and stocks 

 held half or more of the gains made 

 between late August and top of the 

 boom. 



Business Index 108 



Business Week's index of Sept. 16 

 showed business activity at 108 com- 

 pared with 88 a year ago. 



Meantime farmers are in a favorable 

 position to reap the advantages of any 

 future rise since the bulk of the un- 

 usually large supplies of feed grains, 

 wheat, as well as '39 livestock pro- 

 duction is in their hands. Market ana- 

 lysts are pointing out that unusually 

 large supplies of food and fibre are on 

 hand not only in America but through- 

 out the world. They feel that it will 

 be some time, even if war continues, 

 before there can be any substantial 

 gains in prices. England is reported 

 to have centralized her buying activities 

 and has representatives in this country 

 now making arrangements for pur- 

 chases of at least a year's supply of 

 staple foods while they can be had at 

 reasonable prices. 



Meeting in Washington Sept. 19-20, 

 the President's Agricultural Advisory 

 Gjuncil presided over by Secretary 

 Wallace unanimously agreed that a 

 general advance in farm prices to parity 

 was not only justified but would be 

 in the interest of the general welfare. 



With some 80 per cent of corn belt 

 farmers eligible for corn loans this fall, 

 a substantially larger volume, it is be- 



LIEES CONTOOH FARMING 



On the pasture tour, above, are Farm 



Adviser Garlich, left. Mi. Koch and Prof. 



I. C. Hackleman. Grassed terrace outlet 



walerwoy on Koch farm is seen below. 



lieved, will be sealed unless prices ad- 

 vance additionally very soon. This 

 means there will be less so-called "free" 

 corn available to feeders who seal their 

 own. Thus the loan program is likely 

 to have a much greater influence in 

 forcing corn prices up to the loan level 

 especially in feed deficit areas. 



With the 1939 hog crop up to the 

 pre-drouth level of 80 million head, 

 only substantial demand from abroad 

 can raise prices to parity or above $9. 

 Many were forecasting $5 hogs for 

 November, before industrial plants 

 started taking on more men in July 

 and August, and the war started in 

 September. 



Dr. L. J. Norton, University of Illi- 

 nois economist reports that wheat 

 prices in America are substantially 

 above world levels, that the U. S. in 

 mid-summer was paying as much as 

 35c per bushel subsidy to move sur- 

 pluses abroad. 



Feeder Cattle High 



The price margin between feeder 

 cattle and finished beeves has narrowed 

 because of the large corn crop and 

 the heavy demand for feeder and breed- 

 ing stock not only in the corn belt 

 but also in the range country. Cattle 

 raisers are restocking the ranges and 

 are holding back more than usual num- 

 bers of heifer calves. This situation 

 may continue for another year or more. 



Domestic scoured wool prices ad- 

 vanced 8 to 15c a pound the first week 

 in September. Farmers who pooled 

 their wool are sitting pretty. The 1939- 

 40 wool sales in Australia have been 

 cancelled, following arrangements for 

 purchase of the entire Australian clip 

 by the British government. 



Terracing Pays 



^^I^I^^AYMOND KOCH farms 203 

 ^^yL/ rolling acres in Brown county 



^\ on the contour and likes it 

 fine. He received some help from the 

 Soil Conservation Service in "layout" 

 and in the constructing of concrete 

 dams, but did all other terrace con- 

 struction himself with a tractor plow 

 and a Martin ditcher. 



During a recent dairy and pasture 

 improvement tour, Koch led the way 

 to a ten acre field that had been limed 

 and disked in the fall of 1938. This 

 spring it was disked again and given 

 a light seeding of oats plus a mix- 

 ture of sweet clover, red clover and 

 alfalfa and top dressed with 400 lbs. 

 rock phosphate. No grass was seeded 

 but abundant grass was in evidence 

 in August with a thick stand of le- 

 gumes. Part of the pasture with a 15 

 to 20 percent slope was dicked on the 

 contour and has held well. 



Another rough field of 1 5 to 20 acres 

 on the back of the mile long farm 

 which had previously been limed and 

 phosphated, clearly demonstrated re- 

 sults with an excellent stand of sweet 

 clover and blue grass after having been 

 pastured heavily all summer. 



An adjoining untreated field was 

 in marked contrast to this field where 

 he was clipping high the few weeds 

 that had survived. Mr. Koch started 

 terracing about 12 years ago. He is a 

 firm believer in rock phosphate. "I 

 really believe phosphate does us more 

 good than limestone," he said. His 

 corn was planted in rows on a terraced 

 field which discharges its water on 

 the grass waterway. 



Black locust tree plantings are used 

 at several places in the farm where 

 slopes exceed 25 per cent. He has 

 about 10 miles of blocked terraces 

 on the farm to check the flow of water 

 along the terraces. Any farmer visiting 

 him will become enthusiastic over his 

 results. "It wasn't much work," he 

 said.^ — John Spencer. 



Larger supplies of poultry and eggs 

 than last year are reported by govern- 

 ment statisticians. There is a less fav- 

 orable relationship between feed and 

 egg prices than last year and increased 

 marketings of hens this fall seems 

 probable. 



Farm Advisor Garlich reports nearly 100 

 tons of rock phosphate used in Brown 

 county, between Jan, 1 and Aug. 31 with 

 prospects of more before the year ends. 



Glen Franklin who operates a limestone 

 quarry south of Mt. Sterling, says be can't 

 keep up with his orders. 



OCTOBER. 1939 



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