-5- 



^ guaranteed :;fl.60 r. bushel for soybeans. If the -.rice of corn were held 

 down to S5 per cent of parity, it is possible, although not necessarily 

 orobable, that farmers in the commercial corn area would not plant 

 enough corn to provide for our requirements for feeding and reserves cjid 

 some insLU?ance against partial crop failure. 



As I see the picture, the Commodity Credit Cor-ooration does 

 not at present own enough corn to hold the -orice dovm to ^5 "oer cent of 

 parity for any length of time. It could be done until the oresent 

 holdings are absorbed, but the wisdom of releasing all of this corn 

 would be questionable. Loans could be called on the I70 million bushels 

 now under seal but this would not grer.tly modify the situation because 

 part of it vjould go back into the hands of the farmers who redeemed the 

 corn, and the part that was not redeemed would replenish the stock of 

 the Commodity Credit Corporation. The Commodity Credit Corporation 

 could then release these stocks at any price thoy chose to receive 

 and hold down the price a little while longer. If they chose to sell 

 this corn at ^5 per cent of parity, that would only mean that the 

 nation's corn reserves would bo used up that :::Uch rr.orc quickly. The 

 total sup-)ly of corn that would eventually reach the market would not 

 be affected. The price of corn later in the surii.ier probably would rise 

 to the maximum permitted by law. 



Quoting the January "Agricultural Situation": "...Supplies 

 of feed grains are the largest in 20 years, but the number of feed- 

 consuming animals is also of nepj?-record proportions. To produce the 

 increased quantities of meats, milk, eggs, and othv>r livestock products 

 sought in. 19^2 will require the consumption not only of all feed grains 

 produced in 19^1; but of some stock from the Zvor~Normal G-ranary as 

 well." Under these circumstances, it is not surprising that speculators 

 and feeders have been bidding up the price of corn. I should be inclined 



