(the excess Income from circulation in the consumer goods markets. To the 

 extent that this excess income is absorbed by the government, it will 

 help checiv inflation. In the long run, the farmer vrill be better off if 

 inflation is prevented and industrial wage rates are maintained at 

 present levels. In the short run he still has no complaint. 



Fats and oils . No major changes in prices of fats and oils can 

 be expected in the next several months. That applies to the three 

 principal commodities in which we are interested, namely: butter, lard 

 and soybean oil. It also applies to competitive products. Butter is 

 being supported by the government at ^6 cents, which is quite favorable 

 as compared to 19*4-1 prices. It has been necessary to support the price 

 of butter in order to prevent too much diversion of milk in the making of 

 cheese and evaporated milk. It is expected that this higher price for 

 butter will also permit faj?mers who formerly sold butterfat to compete 

 with producers of hogs and beef cattle. Without such support, in view of 

 the recent reductions in the prices of cheese and evaporated milk, 

 farmers might be induced to keep fewer cov7S, and the needed quantities 

 of dairy products might not be produced. Cold storage holdings of 

 creamery butter in the United States totaled approximately ^0 million 

 pounds April 1, 19^2, compared with 63.? million a month earlier and 9 

 million pounds April 1, 19^1. Cold storage holdings of cheese totaled 

 1858 million pounds April 1, 19^2, compared to 110 million pounds April 

 1, 19^1. 



If present ple.ns involving the shipment of 12 million hogs to 

 England during the current year materialize, we shall still have more 

 (lard than is now being consumed in the United States. Stated another 

 way, there will be an excess of lard to offset partially the deficit of 

 imported fats and oils. The ceiling price on lard v/as raised slightly 

 on February k. Early in March lard prices reached the new maximum level. 



